THOMAS MATHEW,AHMEDABAD vs. INCOME TAX OFFICER, WARD 7(2)(1), AHMEDABAD

ITA 2725/AHD/2026Status: DisposedITAT Ahmedabad07 October 2026AY 2020-213 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) had erred by dismissing the appeal solely on the grounds of limitation without adjudicating the claim for exemption under Section 10(10B) on merits. The Tribunal noted that Section 249(3) of the Act empowers the CIT(A) to admit a belated appeal if sufficient cause is shown. Citing the Supreme Court's decision in N Balakrishnan Vs. M. Krishnamurty (1998) 7 SCC 123, the Tribunal stated that the superior forum is free to reconsider the cause for delay afresh, and the length of delay is not decisive; the acceptability of the explanation is important. The Tribunal found that the assessee had reasonable cause for the delay in filing the belated appeal. Therefore, the delay was condoned, and the order of the CIT(A) was set aside. The matter was restored to the CIT(A) with a direction to decide the issue of exemption of ex-gratia amount under Section 10(10B) on merits. No issue was expressly left undecided.

What were the facts?

The assessee, Thomas Mathew, an ex-employee of BSNL, received ex-gratia compensation under the BSNL VRS-2019 scheme for Assessment Year 2020-21. The assessee did not claim exemption under Section 10(10B) of the Income Tax Act, 1961, in the original return, attributing this to a lack of awareness and tax deduction at source by the employer. Following a favorable ITAT decision in a similar case, the assessee filed an appeal before the CIT(A) seeking exemption. However, the CIT(A) dismissed the appeal as being barred by limitation, without adjudicating the exemption claim on merits. The assessee then filed an appeal before the ITAT against the CIT(A)'s order.

What were the issues?

1. Whether the Learned CIT(A) erred in law in dismissing the appeal under section 250 of the Income-tax Act, 1961, and disallowing the claim of exemption under section 10(10B) of Rupees 11,26,702 without adjudicating the issues on merits? 2. Whether the Learned CIT(A) erred in not entertaining the appellant's condonation for delay of 1127 days without considering reasonable causes for delay in filing of appeal and denying an opportunity to be heard and natural justice? Assessee's Contentions: - The Learned CIT(A) wrongly dismissed the appeal without deciding the exemption claim under Section 10(10B) on merits. - The delay in filing the appeal before the CIT(A) was due to lack of awareness of legal provisions and the employer deducting TDS. A reasonable cause existed for the delay, and the CIT(A) should have condoned it, thereby providing an opportunity for natural justice. - Relied on the decision of Chandigarh Bench of the Tribunal in Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025 dated 30/05/2025) which held ex-gratia compensation under BSNL VRS-2019 as exempt under Section 10(10B). Revenue's Contentions: - The judgment records no specific contentions from the revenue regarding the delay or the merits of the Section 10(10B) claim.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 250,Section 249(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH

Before: Shri Tapas Ram Misra & Shri R. Govindarajan

For Appellant: Shri Suchit Patel, A.R
For Respondent: Shri Krishan Kumar, Sr. D.R

PER R. GOVINDARAJAN, ACCOUNTANT MEMBER:

The assessee has filed the appeal against the order dated 30-07-2026 passed by Commissioner of Income Tax (Appeals)/Addl/JCIT(A)-3, Chennai (in short, referred to as the CIT(A)) u/s. 250 of the Income Tax Act, 1961 (herein referred to as “the Act”) relating to Assessment Year 2020-

21.2.

The assessee raised the following grounds of appeal:- “1. The Learned CIT(A) erred in law in dismissing the appeal under section 250 of the Income-tax Act, 1961 and disallow the claim of exemption under section 10(10B) of Rupees 11,26,702 without adjudicating the issues on merits. Thomas Mathew, A.Y. 2020-21

2.

The Learned CIT(A) erred in not entert

The order continues below.

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