NILESH MULCHANDBHAI SHAH,AHMEDABAD vs. THE INCOME TAX OFFICER WARD7(2)(1), VEJALPUR

ITA 2832/AHD/2026Status: DisposedITAT Ahmedabad23 October 2026AY 2020-217 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the compensation of Rs. 11,69,071/- received by the assessee under the BSNL VRS-2019 is exempt under Section 10(10B) of the Act. The reasoning was based on the consistent view of the Tribunal in similar cases involving BSNL VRS-2019 compensation, such as Jayeshkumar Tulsidas Sutaria vs. ITO, and other cited precedents. The Tribunal also found support from the Supreme Court's decision in Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors. regarding condonation of delay and CBDT Circular No. 14 of 1955, emphasizing not to take advantage of an assessee's ignorance. The Tribunal directed the Assessing Officer to compute the taxable income accordingly and grant any refund due. It was also noted that an exemption of Rs. 5,00,000/- granted under Section 10(10C) would stand withdrawn as double exemption for the same amount is not permissible. For AY 2021-22, a similar compensation of Rs. 25,65,979/- was also held exempt under Section 10(10B), with the Assessing Officer directed to compute taxable income and grant refund. The grounds raised by the assessee were allowed.

What were the facts?

The assessee, Nilesh Mulchandbhai Shah, filed appeals for Assessment Years 2020-21 and 2021-22. For AY 2020-21, the assessee received Rs. 11,69,071/- as compensation under the BSNL Voluntary Retirement Scheme (VRS)-2019. Believing it was taxable, the assessee did not claim exemption under Section 10(10B) of the Income Tax Act, 1961, when filing the return. The return was processed under Section 143(1) by CPC, Bengaluru. Subsequently, following a Tribunal decision that BSNL VRS-2019 compensation was exempt under Section 10(10B), the assessee filed an appeal before the CIT(A) seeking condonation of delay and claiming the exemption. The CIT(A) condoned the delay but dismissed the appeal, holding it not maintainable as the CPC processed the return without variation and no exemption was claimed initially. The assessee then filed the present appeal before the ITAT.

What were the issues?

1. Whether the appeal before the CIT(A) was maintainable, considering it was filed after the processing of the return under Section 143(1) without any initial claim for exemption under Section 10(10B) of the Income Tax Act, 1961? (Question of law and fact, turning on Section 246A(1)(a) and principles of natural justice). 2. Whether the compensation received by the assessee under the BSNL VRS-2019 scheme is exempt under Section 10(10B) of the Income Tax Act, 1961? Assessee's contentions: The assessee argued that the delay in filing the appeal before the CIT(A) was unintentional and due to bonafide reasons and lack of clarity. They contended that the compensation received was indeed exempt under Section 10(10B) and relied on the Chandigarh Bench decision in Harish Kumar vs. ITO and a Coordinate Bench decision in Jayeshkumar Tulsidas Sutaria vs. ITO. They also cited the Supreme Court judgment in Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors. on condonation of delay and CBDT Circular No. 14 of 1955. Revenue's contentions: The judgment records no specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 10(10C),Section 250,Section 246A(1)(a),Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI RAHUL CHAUDHARY, JUDICIALMEMBER &SHRI GANGADHAR PANDA

For Appellant: Shri Suchit Patel, AR
For Respondent: Shri Yogesh Mishra, Sr. DR
Hearing: 14.10.2026Pronounced: 23.10.2026

PER GANGADHAR PANDA - ACCOUNTANTMEMBER:

The captioned two appeals have been filed by same assessees against the separate orders of the Ld. Commissioner of Income Tax (Appeals), ADDL/JCIT (A)-1, Siliguri (hereinafter referred to as “Ld. CIT(A)”), both dated 12.08.2026 & 10.08.2026 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2020-21 & 2021-22in case of Nilesh Mulchandbhai Shah. Since, the facts and issues involved in both appeals are identical, hence, the captioned appeals were heard together and are being disposed of by this common order.

ITA Nos

The order continues below.

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