PREETI DUBEY,JHANSI vs. INCOME TAX OFFICER, WARD-2(3)(5), JHANSI

ITA 438/AGR/2026Status: DisposedITAT Dehradun06 October 2026AY 2020-2116 pages
AI SummaryAllowed

What were the facts?

The assessee, Preeti Dubey, an ex-employee of Bharat Sanchar Nigam Limited (BSNL), received ex gratia compensation under a BSNL Voluntary Retirement Scheme (VRS) approved by the Central Government. For Assessment Year 2020-21, she offered the amount to tax in her return after claiming a partial exemption of Rs. 5,00,000/- under Section 10(10C) of the Income Tax Act, 1961. She later learned of a Chandigarh ITAT ruling that such compensation was fully exempt under Section 10(10B). The assessee appealed to the CIT(A) to claim this exemption. The CIT(A) dismissed the appeal, holding that Section 10(10B) applies to retrenchment compensation, not voluntary retirement, and that the claim was raised for the first time in appeal, citing the Supreme Court decision in Goetze (India) Ltd. vs. CIT. The appeals for AY 2020-21 and AY 2021-22 were filed against the CIT(A)'s orders.

What did the Tribunal hold?

The Tribunal allowed the appeals, holding that the compensation received by the assessee under the BSNL Voluntary Retirement Scheme (VRS), 2019, was fully exempt from tax under Section 10(10B) of the Act. The Tribunal respectfully followed the decisions of the ITAT Pune, ITAT Ahmedabad, and ITAT Chandigarh on identical facts. The Tribunal noted that CIT(A)s had taken different stands on similar issues, emphasizing the importance of consistency in judicial decisions. The Tribunal also found support from the ITAT Ahmedabad decision in Vishnu Mohan T Nair v. Income Tax Officer, which suggested that the substance of the payment, rather than hyper-technical interpretations, should be considered, and that a pragmatic approach should be taken for employees in lower rungs. The Tribunal directed the assessee to file revised computations of income before the respective Jurisdictional Assessing Officers to claim the exemption, and for the Revenue authorities to compute the tax liability and grant refunds after due verification. The impugned findings of the CIT(A) were set aside.

What were the issues?

1. Whether the compensation received by the assessee under the BSNL Voluntary Retirement Scheme, 2019, is fully exempt from tax under Section 10(10B) of the Income Tax Act, 1961, as claimed by the assessee, or if it is taxable as held by the CIT(A)? Assessee's contention: The assessee argued that the compensation received under the BSNL VRS, 2019, is fully exempt under Section 10(10B) of the Act, citing the ITAT Chandigarh decision in Harish Kumar vs. ITO. The assessee contended that the initial return was filed due to a lack of clarity and that the CPC erred in not allowing the exemption. The assessee also presented orders from other CIT(A)s who condoned delays and allowed similar claims for BSNL employees. Revenue's contention: The Revenue did not present any contrary decision of a Hon'ble High Court. The CIT(A) held that Section 10(10B) is applicable only to retrenchment compensation and not voluntary retirement. Furthermore, the CIT(A) held that the claim for exemption under Section 10(10B) was raised for the first time during appellate proceedings, constituting a fresh claim not permissible without a revised return, relying on Goetze (India) Ltd. vs. CIT.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10C),Section 250,Section 139(1),Section 139(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA (SMC

Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH

For Appellant: Ms. Ravjot Kaur, CA
Hearing: 22.07.2026Pronounced: 06.10.2026

PER : BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER: These two appeals are directed against the respective impugned orders dated 20.03.2026 and 25.03.2026 passed in appeal No. ADDL/JCIT(A)-2 COIMBATORE/10059/2019-20 and ADDL/JCIT(A)-2 Coimbatore/10047/2020-21 by the ld. ADDL/JCIT(A)-2, Coimbatore (hereinafter referred to as “CIT(A)) u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2020-21 & 2021-22 respectively, wherein ld. CIT(A) has dismissed assessee’s both the appeals.

ITA No.438 & 439/Agr/2026

2.

Since both the appeals are inter-related to the same assessee and common question of law and facts is involved therein, they were

The order continues below.

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