GOUR MONI KABONG SINGH ,MUMBAI vs. ITO, WARD, NORTH LAKHIMPUR, NORTH LAKHIMPUR

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, the assessee offered this compensation to tax in their return of income for Assessment Years 2020-21 and 2021-22. Tax was deducted at source. No exemption was claimed in the original or revised return. The CPC issued an intimation under Section 143(1) without granting exemption. The assessee later became aware of the eligibility for exemption under Section 10(10B) following a judgment by the ITAT Chandigarh Bench in a similar case. The assessee appealed to the CIT(A), who dismissed the appeal, stating the grievance did not emanate from the order appealed against and that the assessee should have claimed relief in a revised return or sought condonation of delay. Aggrieved, the assessee filed further appeals before the ITAT.

Held

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 noted that the assessee had filed the claim before the Ld. CIT(A) and that since the income was not taxable, the assessee was eligible for a refund of the TDS. The Tribunal found that the judgments relied upon by the assessee's counsel supported the case on similar facts. Respectfully following the cited judgments, the Tribunal allowed the appeals of the assessee. The operative direction was to allow the appeals, implying the grant of exemption and refund of TDS.

Key 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, even though it was not claimed 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 lawful reliefs even if not claimed by the assessee. Revenue's Contention: The judgment does not record any specific contentions from the Revenue regarding this issue.