UMESH CHANDRA,BAREILLY vs. ITO-2(2), BAREILLY, BAREILLY

ITA 796/LKW/2026Status: DisposedITAT Cochin25 September 2026AY 2021-225 pages
AI SummaryRemanded

What were the facts?

The assessee, Umesh Chandra, an employee of Bharat Sanchar Nigam Limited (BSNL), received Rs. 36,82,971/- as compensation upon opting for Voluntary Retirement (VRS) for Assessment Year 2021-22. In his return, he claimed this amount as exempt under Section 10(10C) of the Income Tax Act, 1961. The Centralized Processing Centre (CPC), Bangalore, processed the return under Section 143(1) and disallowed the exemption, incorrectly referencing Section 10(10B). The assessee appealed to the National Faceless Appeal Centre (NFAC), Delhi, which dismissed the appeal in limine due to delay in filing before the first appellate authority. The assessee then appealed to the Income Tax Appellate Tribunal (ITAT).

What did the Tribunal hold?

The Tribunal rejected the adjournment application filed by the assessee's representative and proceeded to adjudicate the appeal. The Judicial Member, after considering the facts and the submission of the Ld. Sr. D.R., was of the view that the assessee deserved one more opportunity to present his case. In the interest of substantial justice, the Tribunal restored the file to the office of the Ld. Addl/JCIT(A)-1, Guwahati. The directions were to give the assessee an opportunity to explain the delay in filing the appeal, and if deemed appropriate, to condone the delay and admit the appeal for hearing on merits. The assessee was cautioned to comply with the directions, failing which the Ld. Addl/JCIT(A)-1, Guwahati was at liberty to pass an ex-parte order. The appeal was allowed for statistical purposes.

What were the issues?

1. Whether the NFAC erred in dismissing the appeal in limine without adjudicating on merits, thereby violating the principles of natural justice? (Question of law and fact) 2. Whether the NFAC and CPC erred in disallowing the exemption of Rs. 36,82,971/- under Section 10(10B) of the Income Tax Act, 1961, for compensation received under an approved BSNL VRS? 3. Whether the compensation received under the approved VRS is eligible for exemption under Section 10(10B)? (Question of law) 4. Whether the authorities below erred in not appreciating that the assessee erroneously claimed exemption under Section 10(10C) instead of the correct provision, Section 10(10B), due to lack of professional advice? Assessee's contentions (implied through grounds of appeal): The NFAC's dismissal in limine was wrong. The compensation received under the approved VRS is eligible for exemption under Section 10(10B). The initial claim under Section 10(10C] was an error due to lack of proper advice, and the correct provision is Section 10(10B). Revenue's contentions: The Ld. Sr. D.R. placed reliance on the orders of the authorities below and submitted that the appeal of the assessee may be dismissed.

Which sections of the Income-tax Act were involved?

Section 10(10C),Section 10(10B),Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW

Before: SHRI. SUDHANSHU SRIVASTAVA

For Respondent: Shri Sudhakar Shukla, D.R

This appeal has been preferred by the Assessee against the order dated 08.05.2026, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2021-22. 2.0 The brief facts of the case are that the assessee was an employee of Bharat Sanchar Nigam Limited (BSNL). During the year under consideration, the assessee had opted for Voluntary Retirement (VRS) and under the scheme of the voluntary retirement, the assessee had received an amount of Rs.36,82,971/- as compensation. In the return of income filed by the assessee for the year under consideration on 03.01.2022, the assessee had claimed this amount of Rs.36,82,971/- as ITA No.796/LKW/2026 exempt under section 10(10C) of the Act. The Centralized Processing Cen

The order continues below.

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