SANJAYKUMAR INDRAVADAN PANDYA,AHMEDABAD vs. INCOME TAX OFFICER, AHMEDABAD

ITA 2729/AHD/2026Status: DisposedITAT Ahmedabad07 October 2026AY 2021-2211 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee had reasonable cause for the delay in filing the appeals before the CIT(A). The Tribunal noted that the CIT(A) had rejected the appeals solely on the ground of delay and had not adjudicated the Section 10(10B) claims on merits. Citing the Supreme Court's decision in N. Balakrishnan Vs. M. Krishnamurty, the Tribunal stated that where a lower forum refuses to condone delay, a superior forum can reconsider the cause afresh. The length of delay is not decisive; the acceptability of the explanation is important. The Tribunal found the assessee's explanation for the delay, stemming from a bona fide belief about the taxability of the BSNL VRS compensation and subsequent awareness of judicial developments, to be reasonable. Consequently, the Tribunal condoned the delay. As the CIT(A) had not decided the matter on merits, the Tribunal set aside the CIT(A)'s ex-parte order and restored the appeals to the CIT(A) with a direction to decide the issue of exemption of ex-gratia amount under Section 10(10B) on merits for both assessment years. The Tribunal explicitly left undecided the substantive claim for exemption under Section 10(10B).

What were the facts?

The assessee, Sanjaykumar Indravadan Pandya, filed appeals before the Income Tax Appellate Tribunal (ITAT) against the orders of the Commissioner of Income Tax (Appeals) for Assessment Years 2020-21 and 2021-22. The appeals challenged the CIT(A)'s dismissal of the assessee's appeals primarily on the grounds of delay. The assessee, an ex-employee of BSNL, received ex-gratia compensation under the BSNL Voluntary Retirement Scheme (VRS)-2019. The assessee initially believed this compensation was taxable and did not claim exemption under Section 10(10B) of the Income Tax Act, 1961, in the original returns. Upon becoming aware of judicial pronouncements, including a decision by the ITAT Chandigarh Bench in Harish Kumar v. ITO, which held such compensation exempt, the assessee sought to claim exemption by filing appeals before the CIT(A). The CIT(A) dismissed these appeals in limine due to the significant delay, without adjudicating on the merits of the exemption claim.

What were the issues?

1. Whether the delay in filing the appeal before the CIT(A) was attributable to a "sufficient cause" under Section 249(3) of the Income Tax Act, 1961, warranting condonation, considering the assessee's bona fide belief regarding the taxability of BSNL VRS compensation and subsequent awareness of judicial precedents? - Assessee's Contention: The delay was due to bona fide ignorance of the correct legal position and lack of professional guidance. The assessee believed the ex-gratia compensation was taxable and only realized its exempt status after judicial pronouncements. The assessee argued that "sufficient cause" should be interpreted liberally to advance substantial justice, citing N. Balakrishnan v. M. Krishnamurthy and Collector, Land Acquisition v. Mst. Katiji. The assessee also contended that the CIT(A) misapplied decisions like CIT v. Ram Mohan Kabra and Ajay Dabra v. Pyare Ram. - Revenue's Contention: Not recorded in the judgment. 2. Whether the CIT(A) erred in dismissing the appeal without adjudicating on the merits of the exemption claim under Section 10(10B) of the Act, especially when the claim was based on subsequent judicial developments and a directly applicable ITAT decision? - Assessee's Contention: Appellate authorities have wide powers to examine all questions of fact and law. Legitimate relief cannot be denied on technical grounds. The assessee relied on CBDT Circular No. 14 (XL-35) of 1955 and judicial precedents affirming that lawful reliefs should be granted even if not claimed in the original return. The assessee also cited the ITAT Chandigarh Bench decision in Harish Kumar v. ITO (ITA No. 42/CHD/2025) concerning the same BSNL VRS-2019 scheme. - Revenue's Contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 249(3),Section 10(10B),Section 250,Section 143(1)

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 Sanjay Kumar Pandya, A.R
For Respondent: Shri Krishan Kumar, Sr. D.R

PER R. GOVINDARAJAN, ACCOUNTANT MEMBER:

The assessee has filed the two appeals against the order dated 21-07-2026 passed by Commissioner of Income Tax (Appeals)/Addl/JCIT(A)-2, Pune (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 Years 2020- 21 & 2021-22 respectively.

2.

The assessee raised the following grounds of appeals:- ITA No. 2728-Ahd-2026 A.Y. 2020-21 “1. The appellant respectfully submits that the order passed by the learned Commissioner of Income Tax (Appeals) u/s 250 of the Income-tax Act,

I.T.A Nos. 2728 & 2729/Ahd/2026 Sanjaykumar I

The order continues below.

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