PRAFULLA DEBBARMA,MUMBAI vs. ITO, WARD 1(2), GUWAHATI, GUWAHATI

ITA 513/GTY/2026Status: DisposedITAT Guwahati06 October 2026AY 2021-202226 pages
AI SummaryAllowed

What were the facts?

The assessee, employed by Bharat Sanchar Nigam Limited (BSNL), opted for the BSNL VRS-2019 scheme and received compensation. Due to a lack of awareness regarding exemption under Section 10(10B) of the Income-tax Act, 1961, and compliance with Rule 2BA, the compensation was offered to tax in the return of income. Tax was deducted at source by the employer. The CPC, Bengaluru issued an intimation under Section 143(1) without granting any exemption. The assessee later became aware of the eligibility for exemption based on a Chandigarh ITAT decision in a similar case. The assessee appealed to the CIT(A), who dismissed the appeal, stating that the grievance did not emanate from the order appealed against and that relief should have been claimed by filing a revised return within the time limit. Aggrieved, the assessee filed further appeals before the ITAT.

What did the Tribunal hold?

The Tribunal held that the assessee is eligible for exemption under Section 10(10B) of the Income-tax Act, 1961, on the compensation received under the BSNL VRS-2019 scheme. The Tribunal found that the assessee filed the claim before the CIT(A) and that since the income is not taxable, the assessee is eligible for a refund of the Tax Deducted at Source (TDS). The reasoning was based on the principle that tax authorities should grant all lawful reliefs even if not claimed by the assessee, as supported by CBDT Circular No. 14 of 1955, and by respectfully following the judgment of the ITAT Chandigarh Bench in Harish Kumar vs. ITO. The Tribunal allowed the appeals of the assessee, directing that the compensation be considered exempt and the TDS be refunded.

What were the issues?

1. Whether the assessee is eligible for exemption under Section 10(10B) of the Income-tax Act, 1961, on compensation received under the BSNL VRS-2019 scheme, despite not claiming it in the original or revised return of income. Assessee's contention: The assessee argued that due to a lack of awareness of legal provisions at the time of filing the return, the compensation was inadvertently offered to tax. Following the ITAT Chandigarh Bench's decision in Harish Kumar vs. ITO, the assessee sought exemption under Section 10(10B). The assessee also relied on CBDT Circular No. 14 of 1955, which obligates tax authorities to grant all lawful reliefs even if not claimed by the assessee. Revenue's contention: The revenue did not explicitly record arguments in the provided text. However, the CIT(A)'s order suggests the revenue's stance was that the assessee failed to claim the relief in the return of income and that the time limit for filing a revised return had expired, necessitating condonation of delay.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

ITA No. 512-547/GTY/2026 & other appeals Assessment Years: 2020-21 & 2021-22 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA-GUWAHATI ‘e-COURT’, DB, KOLKATA [Hybrid Court Hearing] Before Shri Duvvuru RL Reddy, Vice-President (KZ) & Shri Laxmi Prasad Sahu, Accountant Member

ITA Nos. 512 & 513/GTY/2026 Assessment Years: 2020-21 & 2021-22 C/o. Padvekar Law Ward-1(2), Guwahati, Chambers, Aayakar Bhawan, 408, Maker Bhavan No. 3, Christian Basti, G.S. 21, New Marine Lines, Road, Guwahati- Mumbai-400020, 781005, Assam Maharashtra [PAN:AFUPD0282N] APPELLANT RESPONDENT

Assessee by : Shri Tazil R. Padvekar, Advocate Revenue by : Shri P.S. Thuingaleng, D.R. & ITA Nos. 514 & 515/GTY/2026 Assessment Years: 2020-21 & 2021-22

Takhellambam Joykumar Singh, Vs. Assistant Commissioner of C/o. Padvekar Law Income Tax, Chambers, Circle, Imphal, 408, Maker Bhavan No. 3, Aayakar Bhawan, Jail 21, New Marine Lines, Road, Old Lambulane, Mumbai-400020, Imphal-795001, Maharashtra Manipur [PAN:CIBPS3326J] APPELLANT RESPONDENT

Assessee by : Shri Tazil R. Padvekar, Advocate Revenue by : Shri P.S. Thuingaleng, D.R. 1

ITA No. 512-547/GTY/2026 & other appeals Asse

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