KISHORKUMAR MAGANLAL SHIRODARIA,RAJKOT vs. ITO WD 2(2)(3) RAJKOT, RAJKOT

ITA 958/RJT/2026Status: DisposedITAT Rajkot07 October 2026AY 2020-20216 pages
AI SummaryRemanded

What were the facts?

The appeals filed by various assessees, including Kishorkumar Maganlal Shirodaria and Visheswar Shivdayal Yadav, for Assessment Years 2020-21 and 2021-22, are directed against orders passed by the NFAC/CIT(A) under section 250 of the Income Tax Act, 1961. These arose from orders passed by the Assessing Officer under section 143(1). The lead case involves Visheswar Shivdayal Yadav, who received an ex-gratia amount of Rs. 1,48,821/- under the BSNL Voluntary Retirement Scheme (VRS) 2019. This amount was included in his total income in the original return. Subsequently, the assessee contended that this ex-gratia amount qualifies for exemption under section 10(10B) as retrenchment compensation, a claim not made in the original return. The assessee became aware of this legal position after an ITAT Chandigarh Bench decision. The assessee's appeal before the CIT(A) was unsuccessful due to a delay in filing.

What did the Tribunal hold?

The Tribunal noted that the issue is squarely covered by a previous decision of the ITAT Rajkot Bench in the case of Bhimji Bhikhabhai Tukadiya. The Tribunal observed that the ex-gratia amount received by BSNL employees under the VRS Scheme, 2019, which was approved by the Central Government, is considered retrenchment compensation and is eligible for exemption under section 10(10B) of the Act. The Tribunal found that the CIT(A) had not properly considered the BSNL Scheme and had dismissed the appeals without examining it, violating the principles of natural justice. Therefore, the Tribunal condoned the significant delays in filing the appeals before the CIT(A) (1860 days and 1553 days respectively) and restored the appeals to the file of the CIT(A) for fresh adjudication. The CIT(A) was directed to consider the BSNL Scheme and the case laws cited by the assessees. The appeals were allowed for statistical purposes.

What were the issues?

1. Whether the assessee is entitled to claim a fresh exemption under section 10(10B) of the Income Tax Act, 1961, for the ex-gratia amount received under the BSNL VRS Scheme, 2019, even though it was not claimed in the original return of income and was offered to tax therein? 2. Whether the ex-gratia compensation received by the appellant under the BSNL VRS Scheme, 2019, is taxable or otherwise exempt under the Act? Assessee's Contention: The assessee argued that the ex-gratia amount received under the BSNL VRS Scheme, 2019, partakes the character of retrenchment compensation and is eligible for exemption under section 10(10B). The assessee also contended that the appellate authority is empowered to adjudicate a fresh claim if the relevant facts are on record. The assessee further argued that the delay in filing the appeal before the CIT(A) should be condoned and the matter restored for fresh adjudication. Revenue's Contention: The Revenue relied on the findings of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 250,Section 143(1),Section 139(1)

AI-generated summary — verify with the full judgment below

आयकर अपीलीय अिधकरण, राजकोट "यायपीठ, राजकोट । In The Income Tax Appellate Tribunal, “SMC” Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member आयकर अपील सं./ITA No. 958 & 959/RJT/2026 [ िनधा"रण वष"/Assessment Year: 2020-21 & 2021-22 ] Kishorkumar Maganlal Shirodaria, ITO Wd 2(2)(3), Pearl Avenue, Flat No. B – 402, Vs. Income Tax Office, New Opp. Crystal Mall, R. K. Park Main Aayakar Bhavan, Vatika, Road, Nana Mava Rajkot Gujrat Race Course Ring Road, 360005 Rajkot Gujrat 360001 "ायीलेखासं./जीआइआरसं./PAN/GIR No.: AGBPS8835J (अपीलाथ"/Appellant) (""यथ"/Respondent) Appellant by : Shri Kumar Pandya, Ld. AR Respondent by : Shri Ganesh Iyer, Ld. Sr. DR आयकर अपील सं. /ITA No. 1190 & 1197/RJT/2026 [ िनधा"रण वष"/Assessment Year: 2020-21 & 2021-22 ] "ायीलेखासं./जीआइआरसं./PAN/GIR No.: AAUPY0930D (अपीलाथ"/Appellant) (""यथ"/Respondent)

Appellant by : Ms. Khushboo Shah, Ld. AR Respondent by : Shri Ganesh Iyer, Ld. Sr. DR सुनवाई की तारीख/Date of Hearing : 05/10/2026 घोषणा की तारीख/Date of Pronouncement : 07/10/2026 :: आदेश/O

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