KHIMJIBHAI NANJIBHAI BABARIA,AMRELI vs. INCOME TAX OFFICER, WARD 3(1)(4), AMRELI

ITA 472/RJT/2026Status: DisposedITAT Rajkot08 October 2026AY 2020-218 pages
AI SummaryRemanded

What were the facts?

Seven appeals were filed by different assessees against orders passed by the National Faceless Appeal Centre (NFAC)/Commissioner of Income Tax (Appeals) [Ld. CIT(A)], arising from orders under Section 143(1) of the Income-tax Act, 1961, passed by the Assessing Officer. The assessment years involved are 2020-21 and 2021-22. The assessees were employees of Bharat Sanchar Nigam Limited (BSNL) who separated from service under the BSNL Voluntary Retirement Scheme 2019 (VRS-2019). This scheme was approved by the Union Cabinet, implemented through a DoT Office Memorandum, and funded by the Central Government. The assessees received ex-gratia compensation under this scheme. Initially, due to incorrect advice, they treated this amount as taxable. Subsequently, they realized it was exempt under Section 10(10B) of the Act. Appeals filed before the Ld. CIT(A) faced delays, and in some cases, the Ld. CIT(A) dismissed them on merit without condoning the delay. The assessees are now before the Income Tax Appellate Tribunal (ITAT).

What did the Tribunal hold?

The Tribunal held that the delay in filing the appeals before the Ld. CIT(A) deserved to be condoned in the interest of justice. The reasons provided by the assessee, including obtaining legal opinions and pursuing alternative remedies under a bona fide belief, were considered convincing and constituted a reasonable and sufficient cause for the delay. The Tribunal condoned the delay in filing the appeals before the Ld. CIT(A). On merits, the Tribunal noted that the Ld. CIT(A) had not considered the BSNL VRS Scheme, which was approved by the Central Government, and adjudicated the appeals without examining it. This was considered a violation of the principle of natural justice. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and remanded the issues back to the Ld. CIT(A) for fresh consideration. The assessees were granted liberty to produce sufficient evidence to prove their cases to the satisfaction of the Ld. CIT(A). The appeals were allowed for statistical purposes.

What were the issues?

1. Whether the delay in filing appeals before the Ld. CIT(A) is to be condoned, considering the assessees were obtaining legal opinions and pursuing alternative remedies under a bona fide belief regarding the taxability of the BSNL VRS compensation? The assessee argued that the delay was for bona fide and reasonable reasons, not deliberate or mala fide, and requested condonation in the interest of substantial justice, seeking restoration to the Ld. CIT(A) for adjudication as per the VRS scheme. The revenue, through the Ld. DR, initially opposed the condonation of delay, arguing the appeals should be dismissed on that ground. However, later, the Ld. DR did not raise any objection if the matters were remitted back to the Ld. CIT(A). 2. Whether the ex-gratia compensation received by the assessees under the BSNL VRS-2019 is fully exempt under Section 10(10B) of the Income-tax Act, 1961? The assessee contended that the compensation was for loss of employment, constituting a capital receipt, and fully exempt under Section 10(10B) (and also mentioned Section 10(10AA)). They argued the Ld. CIT(A) failed to examine the scheme framed by the Central Government for BSNL employees. The revenue relied on the findings of the Ld. CIT(A).

Which sections of the Income-tax Act were involved?

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

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. 472 & 481/RJT/2026 [ िनधा"रण वष" /Assessment Year: 2020-21 & 2021-22 ] Khimibhai Nanjibhai Babaria, Income Tax Officer, B-9 Matrukrupa Chittal Road Ward 3(1)(4), बनाम/ Western Park Society, Vs. 86-2, GIDC Varasada Road, Amreli Gujarat 365601 Amreli, Gujarat-365601 "ायीलेखासं./जीआइआरसं./PAN/GIR No.: ACOPB5685J (Assessee) (Respondent)

आयकर अपील सं./ITA No. 613/RJT/2026 [ िनधा"रण वष" /Assessment Year: 2021-22 ] Kishorchandra Girdharlal Joshi, Income Tax Officer, Ramkrupa Manekpara, Street Ward 3(1)(4), बनाम/ No.6 Amreli, Gujarat-365601 Vs. Ganga Bhavan, Keriya Rd, D.L.B. Society, Amreli, Gujarat-365601 "ायीलेखासं./जीआइआरसं./PAN/GIR No.: ABZPJ2082M (Assessee) (Respondent)

आयकर अपील सं./ITA No. 497 & 498/RJT/2026 [ िनधा"रण वष" /Assessment Year: 2020-21 & 2021-22 ] Lakhman Shir, Income Tax Officer, Plot No.30 Sheetal Park Society, Ward 1(2), बनाम/ Collage, Jamnagar, Gujarat-361005 Jamnagar, Gujarat 361001 "ायीलेखासं./जीआइआरसं./PAN/GIR No.: AIVPS9658K (As

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