SANGARALINGAM RATNAM BOOBATHIRAJ,MADURAI vs. DEPUTY COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE-1, MADURAI

ITA 3652/CHNY/2026Status: DisposedITAT Chennai06 October 2026AY 2021-227 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the ex-gratia compensation of Rs. 22,70,407/- received by the assessee under the BSNL VRS-2019 scheme is eligible for exemption under Section 10(10B) of the Act. The Tribunal found that the issue was squarely covered by the decision of a Co-ordinate Bench in Shri Sekar Gnanaprakasam, which held that compensation under the BSNL VRS-2019 scheme was eligible for exemption. The Tribunal noted that the BSNL VRS-2019 scheme was government-approved and, in substance, a retrenchment scheme. The Tribunal further held that the mere fact that the assessee did not claim the exemption in the original return of income cannot disentitle the assessee from claiming a statutory exemption. Relying on Supreme Court and Bombay High Court judgments (Jute Corporation of India Ltd. v. CIT and CIT v. Pruthvi Brokers & Shareholders Pvt. Ltd.), the Tribunal stated that appellate authorities can consider legitimate claims, even if not made in the original return. The Tribunal set aside the order of the JCIT(A) and directed the Assessing Officer/CPC to allow the exemption under Section 10(10B) after verifying the receipt and relevant documents, and to recompute the income and tax liability accordingly.

What were the facts?

The assessee, Sangaralingam Ratnam Boobathiraj, an employee of Bharat Sanchar Nigam Limited (BSNL), opted for the BSNL Voluntary Retirement Scheme, 2019 (BSNL VRS-2019) during the previous year relevant to Assessment Year 2021-22. He received Rs. 22,70,407/- as ex-gratia compensation. Initially, the assessee did not claim exemption under Section 10(10B) of the Income Tax Act, 1961, and offered the entire amount to tax. After becoming aware of judicial decisions, the assessee sought exemption, which was rejected by the CPC under Section 154. The assessee's appeal before the Joint Commissioner of Income Tax (Appeals) [JCIT(A)] was dismissed. The JCIT(A) held that a fresh claim could not be entertained in appellate proceedings and that the assessee should have filed a revised return.

What were the issues?

1. Whether the ex-gratia compensation of Rs. 22,70,407/- received by the assessee under the BSNL VRS-2019 scheme is eligible for exemption under Section 10(10B) of the Income Tax Act, 1961, as a question of law. 2. Whether the JCIT(A) erred in not allowing the exemption claim, despite the assessee's contention that it was a statutory exemption and the facts were identical to previous favorable orders, as a question of mixed law and fact. 3. Whether the JCIT(A) erred in holding that a fresh claim of exemption cannot be entertained in appellate proceedings, as a question of law. Assessee's Contentions: - The issue is covered by the decisions of the Co-ordinate Bench in Shri Sekar Gnanaprakasam v. DCIT and the Chandigarh Bench in Harish Kumar v. ITO, which held that compensation under BSNL VRS-2019 is exempt under Section 10(10B). - The JCIT(A) erred in disregarding CBDT Circular No. 14 of 1955 and rejecting the legitimate claim. - The JCIT(A) erred in holding that a fresh claim cannot be entertained in appellate proceedings. - The JCIT(A) erred in not following the favorable order in the assessee's own case for AY 2020-21. Revenue's Contentions: - The Revenue relied upon the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 10(10B),Section 250,Section 154,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: GAGAN GOYAL & SHRI MANU KUMAR GIRI

For Respondent: Mr. Karthik Dasari, JCIT
Hearing: 16.09.2026

PER MANU KUMAR GIRI, JM:

This appeal filed by the assessee is directed against the order dated 24.04.2026 passed by the Ld. Joint Commissioner of Income Tax (Appeals), Kochi [hereinafter referred to as “the Ld. JCIT(A)”], under section 250 of the Income Tax Act, 1961 (“the Act”) for the Assessment Year 2021-22. Sangaralingam Ratnam Boobathiraj Vs DCIT NCC-1 2. Th

The order continues below.

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