ANILKUMAR MATHUR,AHMEDABAD vs. INCOME TAX OFFICER WARD 3(3)(5), AHMEDABAD, INCOME TAX OFFICE, VEJALPUR

The grounds raised by the Assessee read as under: 1. The Ld. CIT(A) has erred in law and on facts in refusing to condone the delay in filing the appeal without appreciating that the delay occurred solely due to the Appellants bonafide ignorance regarding the availability of exemption under Section 10(10B) and lack of legal knowledge. These circumstances constitute a reasonable cause within the meaning of Section 249(3) of the Income-tax Act, 1961. The Ld. CIT(A) failed to apply the settled legal principles laid down by the Honorable Supreme Court in Collector, Land Acquisition vs. Katiji. and N. Balakrishnan vs. M. Krishnamurthy., wherein it has been held that substantial justice must prevail over technicalities and that the length of delay is immaterial when the explanation is bona fide. 2. The Ld. CIT(A) has erred in holding that the Appellant is making a new claim, ignoring that appellate authorities have plenary powers to grant all legitimate reliefs, even if not claimed in the return, as mandated by CBDT Circular No. 14 of 1955 and upheld by various judicial precedents including decisions of the Honorable Supreme Court and High Courts. 3. The Ld. CIT(A) has erred in dismissing the appeal at the threshold without appreciating that the Appellants case is factually identical to Harish Kumar vs. ITO. (ITA No. 42/CHD/2025), WHARE compensation received under the same BSNL VRS-2019 was held fully exempt under Section 10(10B). The Ld. CIT(A) failed to adjudicate the merits despite the existence of a legitimate, legally sustainable, and directly applicable claim under Section 10(10B) 4. The Ld. CIT(A) has passed the impugned order without granting reasonable opportunity of hearing and without issuing statutory notice under Section 250 of the Act during appellate proceedings. The order is thus vitiated for breach of natural justice and is bad in law. Additional Ground 5. The Lrd CIT A has erred in confirming the action of the Lrd AO in restricting the exemption claimed by the appellant under section 10 10AA to Rs 3,00,000 and in upholding the addition of the remaining amount, without properly appreciating the facts, submissions and evidences placed on record. The impugned order is contrary to the beneficial nature of section 10 10AA and is not sustainable in view of CBDT Notification No 31/2023 dated 24.05.2023, the decision of the Honble ITAT Jaipur Bench in the case of Chandra Prakash Vashistha vs ITO ITA No 1139/JPR/2025, and CBDT Circular No 14 XL 35 dated 11.04.1955. It is respectfully submitted that the entire leave encashment amount is eligible for exemption. 4. We have heard both the sides and have perused the material on

We find that identical issue had come up for consideration before the Tribunal in the case of Jayeshkumar Tulsidas Sutaria Vs. The Income Tax Officer, Ward 7(2)(1), Ahmedabad: ITA Nos.2387 & 2388/AHD/2025 (Assessment Years: 2020-21 & 2021-22) wherein in the case of identically placed employee of BSNL, the Tribunal accepted contentions of the Assessee; condoned similar delay

There is no change in the legal proposition and the factual matrix. Revenue has failed to distinguish the above decisions of the Tribunal either on facts or in law. Further, the view taken by the Tribunal finds support in the (a) judgment of the Hon’ble Supreme court in the case of Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors.(1987) 167 ITR 471 (SC) - on the issue of condonation of delay; and (b) Circular No. 14 of 1955 issued by the Central Board of Direct Taxes directing officers not to take advantage of ignorance of an assessee as to their rights and assist them in claiming and securing reliefs/refunds. On the other hand, the reliance placed by the Revenue on the judgment of the Hon’ble Supreme Court in the case of Goetze (India) Ltd V CIT: 284 ITR 323 is clearly misplaced as the Learned CIT(A) could entertain a fresh claim raised by an assessee for the first time in the appellate proceedings.

In view of the above, accepting the claim of the Assessee we hold that compensation of INR.11,90,834/- [compensation of INR.16,90,834/- received Less exemption of INR.500,000/- claimed] received by the Assessee during the relevant previous year under BSNL VRS – 2019 is exempt under Section 10(10B) of the Act. The Assessing Officer is, therefore, directed to computed the taxable income of the Assessee accordingly and grant refund due, if any, as per law. The Assessee is

Thus, in terms of the aforesaid, Ground No. 1 to 3 raised by the Assessee are allowed while Ground No.4 is dismissed as being infructuous.

Ground No. 5 (raised by the Assessee as additional ground) relates to exemption claimed by the Assessee in respect of Leave Encashment under Section 10(10AA) of the Act. The Assessee has contended that the Assessee should be granted further exemption of INR.5,03,036/- [in addition of exemption of INR.300,000/- claimed in the return of income] under Section 10(10AA) of the Act as the Assessee continues to be governed by the CCS (Pension Rules), 1972. On perusal of the judgment of the Hon’ble Kerala High Court in the case of Sanchar Nigam Pensioners’ Welfare Association Vs. Union of India (WP(C) No.16360 of 2023 we find that Hon’ble High Court has held that Department of Telcom (DoT) employees absorbed in BSNL, whose pension continues to be governed under Rule 37A of the CSS (Pension) Rules, constituted a special category and are required to be treated at par with Central Government employees for the purpose of exemption under Section 10(10AA)(i) of the Act. Accordingly, we direct the Assessing Officer to grant benefit of exemption under Section 10(10AA) of the Act to the Assessee after verifying that the Assessee was an employee of DoT absorbed by BSNL. The Assessee is directed to place before the Assessing Officer the relevant details/documents and revised computation of income claiming exemption under Section 10(10AA) of the Act of the Act for the same.

As regards, the alternative legal contention of the Assessee regarding

In view of the above, the Ground No. 5 raised by the Assessee is allowed for statistical purposes.

In result, the present appeal preferred by the Assessee is partly allowed.

We would next take up ITA No.618/AHD/2026 pertaining to Assessment Year 2021-2022 preferred by the Assessee against the Order, dated 31/01/2026, passed by the CIT(A) dismissing the appeal against the Intimation Order, dated 18/01/2022, passed under Section 143(1) of the Act being barred by limitation.

During the course of hearing both the sides had agreed that our finding/adjudication in ITA No.617/AHD/2026 pertaining to the Assessment Year 2020-2021 shall apply mutatis mutandis to the present appeal for the Assessment Year 2021-2022. Therefore, adopting the reasoning given while adjudicating appeal for the Assessment Year 2020-2021 hereinabove, we hold that the compensation of INR.54,02,026/- received by the Assessee during the relevant previous year under BSNL VRS – 2019 is exempt under Section 10(10B) of the Act. The Assessing Officer is, therefore, directed to compute the taxable income of the Assessee accordingly and grant refund due, if any, as per law. The Assessee is directed to place before the Assessing Officer the details of compensation received under BSNL VRS – 2019 and the computation of income claiming exemption under Section 10(10B) of the Act for the same. Thus, in terms of the aforesaid, Ground No 1 to 3 raised by the Assessee are allowed while Ground No. 4 is dismissed as being infructuous.

In result the present appeal preferred by the Assessee is partly allowed.

In conclusion both the appeal preferred by the Assessee are partly allowed.