GUNVANTKUMAR KANTILAL PRAJAPATI,AHMEDABAD vs. ITO WD 1 PALANPUR, BANASKANTHA,GUJARAT

The Assessee has raised following grounds of appeal: 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. 4. We have heard both the sides and have perused the material on record.

The Assessee in the present case is an individual. During the relevant previous year the Assessee received compensation under Bharat Sanchar Nigam Limited Voluntary Retirement Scheme – 2019 [for short ‘BSNL VRS-2019’]. Due to lack of awareness of the legal provisions at the time of filing the return of income and on account of the fact that the employer deducted tax at source from the said compensation received under the BSNL VRS-2019, the Assessee did not claim exemption under Section 10(10B) of the Act in respect of compensation

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 in filing appeal before the Learned CIT(A) against intimation issued under Section 143(1) of the Act; and directed the Assessing Officer to grant refund to the Assessee holding that the compensation received by the assessee under the same BSNL VRS - 2019 was exempt under Section 10(10B) of the Act. The aforesaid decision of the Tribunal was followed in the case of Kirtida Rajeshkumar Shah Vs. The Income Tax Officer, Ward 7(2)(1), Ahmedabad: :ITA Nos.151/AHD/2026 (Assessment Years: 2020-21) and Chhaganlal Bhimabhai Vs. The Income Tax Officer, Ward 1(2), Bhavnagar: ITA Nos.2547 & 2548/AHD/2025 (Assessment Years: 2020-21 & 2021-22).

There is no change in the legal proposition and the factual matrix.

In view of the above, accepting the claim of the Assessee we hold that compensation of INR.12,75,055/-[compensation of INR.17,75,055/- 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 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.

During the course of hearing both the sides had agreed that our finding/adjudication in ITA No.635/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.38,96,047/- 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 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.