PADMAVATHI SARIPELLA,HYDERABAD vs. ITO, WARD-13(3), HYDERABAD

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ITA 2219/HYD/2026Status: DisposedITAT Hyderabad04 November 2026AY 2020-2126 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the compensation received by the assessees from BSNL under the Voluntary Retirement Scheme – 2019 is exempt under Section 10(10B) of the Act. The Tribunal noted that coordinate benches of the ITAT across the country have consistently held that such compensation is exempt under Section 10(10B). The Tribunal followed the decision of the Chennai Bench in Shri Sekar Gnanaprakasam Vs. DCIT, which held that the BSNL VRS-2019 scheme, funded by government budgetary support and implemented when BSNL could not pay salaries, partakes the character of a Government-approved retrenchment compensation scheme, making it eligible for exemption under Section 10(10B). The Tribunal directed the Assessing Officer to verify the claim and allow the exemption under Section 10(10B), and to determine the tax payable/refundable, along with interest under Section 244A. The appeals were allowed for statistical purposes, implying that the issue of condonation of delay was implicitly resolved by adjudicating the merits.

What were the facts?

The assessee, Padmavathi Saripella, filed appeals for Assessment Years 2020-2021 and 2021-2022 against orders of the Addl./JCIT(A)-1, Ahmedabad. The appeals were dismissed by the Commissioner (Appeals) as barred by limitation, with the delay not being condoned under Section 249(3) of the Income-tax Act, 1961. The assessee had sought exemption under Section 10(10B) for BSNL VRS ex-gratia compensation of ₹10,51,666 for AY 2020-2021 and ₹23,08,289 for AY 2021-2022. The assessee contended that the delay was due to bona fide reasons and that the claim for exemption was consistently pursued. The Commissioner (Appeals) declined to condone the delay, without expressing an opinion on the merits of the claim.

What were the issues?

1. Whether the learned Commissioner (Appeals) erred in dismissing the Appellant's appeal as barred by limitation by declining to condone the delay under Section 249(3) of the Income-tax Act, 1961, despite the Appellant having demonstrated sufficient cause for not presenting the appeal within the prescribed time. Assessee's Contention: The assessee argued that they acted bona fide and consistently pursued statutory remedies. The reliance on an earlier affidavit was merely to narrate the factual background and was relevant for establishing "sufficient cause." The delay was neither deliberate nor mala fide, and no prejudice would be caused to the Revenue. The Commissioner (Appeals) should have adopted a liberal approach and adjudicated the substantive claim under Section 10(10B) of the Act, which was supported by statutory provisions, notifications, the BSNL VRS scheme, and judicial precedents. Revenue's Contention: The judgment does not record any specific contentions made by the Revenue before the Tribunal regarding the delay or the merits of the claim.

Which sections of the Income-tax Act were involved?

Section 249(3),Section 10(10B),Section 250,Section 244A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G.

Pronounced: 04.11.2026

आदेश / ORDER PER VIJAY PAL RAO, VICE PRESIDENT: These two appeals by the Assessee are directed against two separate Orders both dated 06.05.2026 of the learned ADDL/JCIT(A)-1, Ahmedabad, for the assessment years 2020-2021 and 2021-2022 respectively.

ITA.No.2219/Hyd./2026 – A.Y. 2020-2021:

2.

The Assessee has raised the following ground of appeal:

1.

“That the order dated 06.05.2026 passed by the learned Addl./Joint Commissioner of Income-tax (Appeals)-1, Ahmedabad under Section 250 of the Income-tax Act, 1961 ("the Act") is contrary to law, contrary to the facts and circumstances of the case and is liable to be set aside. 2. That the learned Commissioner (Appeals) erred in dismissing the Appellant's appeal as barred by limitation by declining to condone the delay under Section 249(3) of the Act, despite the Appellant having demonstrated sufficient cause for not presenting the appeal within the prescribed time. 3. That the learned Commissioner (Appeals) failed to appreciate that the Appellant had acted bona fide and had consistently pursued the statutory remedies available under the Act immediately upon becoming aware of the judicial decisions holding that compensation received under the BSNL Voluntary Retirement Scheme, 2019 is eligible for exemption under Section 10(10B) of the Act. 4. That the learned Commissioner (Appeals) erred in treating the Appellant's reliance upon an affidavit originally furnished in support of earlier statutory proceedings as a ground for rejecting the application for condonation of delay, without appreciating that the affidavit merely narrated the factual background and that the explanation contained therein was equally relevant for determining the existence of "sufficient cause" under Section 249(3) of the Act. 5. That the learned Commissioner (Appeals) failed to appreciate that the Appellant had throughout pursued the same substantive claim for exemption under Section 10(10B) in respect of the BSNL VRS ex-gratia compensation of 10,51,666, and that reference to earlier statutory proceedings neither altered the factual basis of the claim nor rendered the explanation for delay unacceptable. 6. That the learned Commissioner (Appeals) ought to have adopted a liberal and justice-oriented approach while exercising the discretion vested under Section 249(3) of the Act, particularly when the delay was neither deliberate nor motivated by any mala fide intention and no prejudice would have been caused to the Revenue by adjudicating the appeal on merits. 7. That the learned Commissioner (Appeals) failed to appreciate that the Appellant's claim under Section 10(10B) was supported by the relevant statutory provisions, Government Notifications, the BSNL Voluntary Retirement Scheme, 2019 and the judicial precedents relied upon before the first appellate authority. 8. That, having expressly recorded that no opinion was being expressed on the merits of the Appellant's claim, the learned Commissioner (Appeals) ought not to have declined adjudication of the Appellant's substantive claim solely on a procedural ground, particularly when the merits of the claim were expressly left open. 9. That the learned Commissioner (Appeals) failed to exercise the appellate jurisdiction vested in him by not adjudicating the Appellant's claim for exemption under Section 10(10B), despite all material facts necessary for deciding the issue being available on record. 10. That the learned Commissioner (Appeals) failed to appreciate that compensation received by the Appellant under the BSNL Voluntary Retirement Scheme, 2019 is eligible for exemption under Section 10(10B) of the Act in view of the consistent judicial precedents governing the issue. 11. That this Hon'ble Tribunal may be pleased to set aside the impugned order, hold that the delay before the learned Commissioner (Appeals) deserved to be condoned under Section 249(3) of the Act, and adjudicate the Appellant's claim for exemption under Section 10(10B) on merits or, in the alternative, restore the matter to the file of the learned Commissioner (Appeals) for fresh adjudication in accordance with law.

12.

That the Appellant is entitled to all consequential reliefs, including re-computation of income, refund of taxes paid in excess and grant of applicable interest in accordance with law. 13. The Appellant craves leave to add, alter, amend, modify or withdraw any of the above Grounds of Appeal at or before the time of hearing.”

ITA.No.2219/Hyd./2026 – A.Y. 2021-2022:

3.

The assessee has raised the following grounds of appeal:

1.

“That the order dated 06.05.2026 passed by the learned AddI./Joint Commissioner of Income-tax (Appeals)-1, Ahmedabad under Section 250 of the Income-tax Act, 1961 ("the Act") is contrary to law, the facts and circumstances of the case, and is liable to be set aside. 2. That the learned Commissioner (Appeals) erred in dismissing the Appellant's appeal as barred by limitation by declining to condone the delay under Section 249(3) of the Act, despite the Appellant having placed on record a bona fide and reasonable explanation constituting sufficient cause for the delay in filing the appeal. 3. That the learned Commissioner (Appeals) failed to appreciate that the Appellant had acted bona fide and had consistently pursued the statutory remedies available under the Act immediately upon becoming aware of the judicial pronouncements holding that compensation received under the BSNL Voluntary Retirement Scheme, 2019 is eligible for exemption under Section 10(10B) of the Act. 4. That the learned Commissioner (Appeals) erred in treating the Appellant's reliance upon an affidavit, which had earlier been filed in connection with another statutory remedy concerning the same claim for exemption, as a ground for rejecting the application for condonation of delay, without appreciating that the affidavit merely narrated the factual background and that the explanation contained therein was equally relevant for determining the existence of "sufficient cause" under Section 249(3) of the Act. 5. That the learned Commissioner (Appeals) failed to appreciate that the Appellant had throughout pursued the same substantive claim for exemption under Section 10(10B) in respect of the BSNL VRS ex-gratia compensation of 23,08,289, and that reference to earlier statutory proceedings neither altered the factual basis of the claim nor rendered the explanation for delay unacceptable. 6. That the learned Commissioner (Appeals) ought to have adopted a liberal and justice-oriented approach while exercising the discretion vested under Section 249(3) of the Act, particularly when the delay was neither deliberate nor attributable to any mala fide intention and no prejudice would have been caused to the Revenue by adjudicating the appeal on merits.

7.

That the learned Commissioner (Appeals) failed to appreciate that the Appellant's claim under Section 10(10B) was supported by the relevant statutory provisions, the BSNL Voluntary Retirement Scheme, 2019, Government Notifications and the judicial precedents relied upon before the first appellate authority. 8. That, having expressly recorded that no opinion was being expressed on the merits of the Appellant's claim, the learned Commissioner (Appeals) ought not to have declined adjudication of the Appellant's substantive claim solely on a procedural ground, particularly when the claim involved exemption under Section 10(10B) in respect of ₹23,08,289 received under the BSNL Voluntary Retirement Scheme, 2019. 9. That the learned Commissioner (Appeals) failed to exercise the appellate jurisdiction vested in him by not adjudicating the Appellant's claim for exemption under Section 10(10B), despite all material facts necessary for deciding the issue being available on record. 10. That the learned Commissioner (Appeals) failed to appreciate that the compensation received by the Appellant under the BSNL Voluntary Retirement Scheme, 2019 is eligible for exemption under Section 10(10B) of the Act in view of the consistent judicial precedents governing the issue. 11. That this Hon'ble Tribunal may be pleased to set aside the impugned order, hold that the delay before the learned Commissioner (Appeals) deserved to be condoned under Section 249(3) of the Act, and adjudicate the Appellant's claim for exemption under Section 10(10B) on merits or, in the alternative, restore the matter to the file of the learned Commissioner (Appeals) for fresh adjudication in accordance with law. 12. That the Appellant is entitled to all consequential reliefs, including re-computation of total income, refund of taxes paid in excess together with applicable interest under the provisions of the Act. 13. The Appellant craves leave to add, alter, amend, modify or withdraw any of the above Grounds of Appeal at or before the time of hearing.”

4.

Briefly stated facts of the case are that the assessee is an individual and employed with Bharat Sanchar Nigam Limited [in short “BSNL”], a Public Sector Undertaking under the administrative control of the Department of Telecommunications, Government of India. Pursuant to the decision of the Union Cabinet for revival of BSNL by reducing employee cost, administrative allotment of spectrum for 4G services, etc., BSNL introduced the Voluntary Retirement Scheme – 2019 for its employees aged 50 years and above, on payment of retirement ex-gratia. The assessee in the present appeals opted for the Voluntary Retirement Scheme – 2019 and received compensation/ex-gratia, as quantified by BSNL and paid in the relevant financial years. The BSNL paid the compensation after deducting applicable TDS as per law. The amount so received by the assessee was offered to tax in the respective returns of income filed for the relevant assessment years. The returns of income filed by the assessee were processed u/s 143(1) of the Act, accepting the returned income without any tax demand.

5.

The assessee in the present appeals filed appeals before the respective learned Addl./JCIT(A), inter alia, making a fresh claim of exemption under section 10(10B) of the Income-tax Act, 1961, in respect of the compensation received from Bharat Sanchar Nigam Limited (BSNL) under the Voluntary Retirement Scheme – 2019. The assessee contended that, due to ignorance of law and incorrect professional advice, they could not claim the benefit of exemption under section 10(10B) of the Act, while filing his respective returns of income. Subsequently, upon becoming aware of the judicial precedents rendered in favour of similarly placed BSNL employees holding that the compensation received under the BSNL Voluntary Retirement Scheme – 2019 is eligible for exemption under section 10(10B) of the Act, the assessee sought fresh professional advice and preferred appeals before the respective learned Addl./JCIT(A), wherever applicable along with petitions for condonation of delay, requesting admission of his fresh claim for exemption under section 10(10B) of the Act.

6.

Learned Addl./JCIT(A)-4, Ahmedabad dismissed the appeals filed by the assessee for the assessment years 2020-2021 and 2021-2022 as there was a delay of 1623 days and 1603 days respectively in filing the appeals as well as treating the assessee as not a workman as per the conditions laid down in sec.10(10B) of the Act. Thus, the Addl./JCIT(A)- 4, Ahmedabad has not decided the appeals of the assessee on merits and particularly on the issue of claim of exemption u/sec.10(10B) of the Act.

7.

Before the Tribunal, the learned Authorised Representative of the Assessee has submitted that the delay in filing the appeals before the learned CIT(A) was duly explained by filing the petitions for condonation of delay as initially the assessee was under the bonafide belief that the assessee is not entitled for the exemption u/sec.10(10B) of the Act however, there are subsequent legal precedents on this point where the Tribunal has decided the issue in favour of the assessee and therefore, the assessee filed the belated appeals before the learned CIT(A). The learned Authorised Representative of the Assessee has further submitted that the assessee accepted the Order of the CPC in respect of the compensation received from BSNL under VRS Scheme-2019 as per the professional advice and ignorance of law therefore, the appeals could not be filed within the period of limitation due to bonafide belief and inadvertent mistake on the part of the assessee for accepting the incorrect professional advice. He has thus submitted that subsequently the issue has been rightly appreciated by various Benches of the Tribunal including the decision of the ITAT, Bangalore Bench in the case of Basappa Balarama and Murthy Rangappa Vs. ITO, Ward-1, Karnataka in ITA Nos.1342 and 1427/Bang/ 2026, dated 29.05.2026, wherein, in paragraphs 14 and 15, the Tribunal discussed the issue of delay and condoned the delay in filing the appeals ranging from 900 to 2000 days, depending upon the explanation of the assessees and by considering the fact that the learned Addl./JCIT(A) himself had condoned the delay in filing the appeals in a number of cases. Further, the learned Authorised Representative of the Assessee has submitted that the Coordinate Bench of ITAT, Hyderabad Benches in series of decisions has decided this issue in favour of the assessee and the delay in filing the appeal before the learned CIT(A) is also condoned by the Tribunal by considering the fact that the delay in filing the appeal was only due to a bonafide and inadvertent mistake on the part of the assessee for not challenging the Order of the CPC and making a claim of exemption u/sec.10(10B) of the Act. Thus, the learned Authorised Representative of the Assessee has submitted that the delay in filing the appeals before the learned Addl./JCIT(A) may be condoned in the interest of justice. He has also relied upon the Order of this Tribunal dated 15.07.2026 in the case of Raghavendra Latha Madhavi & 3 Others vs. ITO, Ward-9(1), Hyderabad & Others in ITA.Nos.852 and 853/Hyd./ 2026 etc. batch as well as decision of Hon’ble Jurisdictional High Court Sri Vissamsetty Ramakrishna vs. PCIT-4 and two others in WP.No.19498 of 2026 Order dated 15.07.2026.

8.

The learned counsel for the assessee, on the issue of taxability of compensation received from BSNL under the VRS-2019 Scheme, submitted that the issue is now settled in favour of the assessee by the decisions of various Tribunals, including the decisions of the ITAT, Ahmedabad, Chennai, Bangalore and Pune, where the Tribunals have taken a consistent view and held that compensation received by the employees of BSNL under the VRS-2019 Scheme is akin to retrenchment compensation as contemplated u/s 10(10B) of the Act and, in view of the 2nd proviso to section 10(10B), the entire amount of compensation is exempt u/s 10(10B) of the Act. The Tribunal further held that, wherever the assessees had made a fresh claim of exemption by filing appeals before the first appellate authority, the same had been admitted and directed the A.O. to consider the revised statement of total income filed by the assessees claiming exemption u/s 10(10B) of the Act, and determine the tax payable or refundable, as the case may be. Therefore, he submitted that the fresh claim made by the assessee for exemption u/s 10(10B) of the Act should be admitted and directions may be given to the A.O. to allow the exemption and grant refund of taxes paid by the assessee, if any, towards compensation as per law.

9.

The learned Senior A.R. for the Revenue, Shri B. Laxmi Kanth, on the other hand, supporting the order of the learned Addl./JCIT(A), submitted that, wherever the appeals were filed belatedly, the reasons given by the assessee do not constitute "sufficient cause" for condonation of delay and, therefore, the delay in filing the appeals before the learned Addl./JCIT(A) should not be condoned.

10.

The learned Senior A.R. for the Revenue further submitted that, compensation received by the present assessee from BSNL under the VRS-2019 Scheme is not retrenchment compensation for claiming exemption u/s 10(10B) of the Act because, as per the Scheme introduced by BSNL itself, it is very clear that, it is a Voluntary Retirement Scheme and the assessee could either accept or decline the same and there was no compulsion on the assessee to opt for VRS under any circumstances. Therefore, re-characterization of the VRS compensation received by the assessee as retrenchment compensation and allowing exemption @ 100% under section 10(10B) of the Act is incorrect. The learned Senior A.R. further submitted that the assessee himself had filed his respective returns of income and offered the compensation received from BSNL to tax in accordance with the returns filed by him. Further, the employer, i.e., BSNL, had also deducted TDS on such compensation as applicable under the relevant provisions of the Act. From the above, it is very clear that the compensation received by the assessee from BSNL is compensation under a Voluntary Retirement Scheme falling under section 10(10C) of the Act and not under section 10(10B) of the Act and, therefore, the subsequent claim made by the assessee cannot be accepted. Therefore, he submitted that the appeals filed by the assessee should be dismissed.

11.

We have considered the rival submissions as well as relevant material on record. At the outset, it is noted that there are series of decisions of various Benches of the Tribunal considering this issue and decided the same in favour of the assessee by holding that the compensation received by the assessee from BSNL under VRS Scheme-2019 is exempt u/sec.10(10B) of the Act. Further various Benches of the Tribunal have also considered the condonation of delay ranging from 900 to 2000 days in filing the appeals before the learned CIT(A) and held that when the issue involved is covered in favour of the assessee then, the appeal of the assessee ought to have been decided on merits instead of dismissing on technical ground of limitation. This Tribunal vide Order dated 15.07.2026 in the case of Raghavendra Latha Madhavi & 3 Others vs. ITO, Ward-9(1), Hyderabad & Others (supra), has considered condonation of delay in Para nos.10 and 11 as under:

“10. We have heard both parties, perused the material available on record and had gone through the orders of the authorities below. We have also carefully considered a plethora of judicial precedents referred to by learned counsel for the assessees on this issue. Insofar as dismissal of the appeals filed by the assessees by the learned Addl/JCIT for the delay in filing the appeals, we find that, the very same issue has been considered by the Coordinate Bench of ITAT, Bengaluru in the case of Basappa Balarama and Murthy Rangappa (supra), and in para 15, the Tribunal has held as under:

“15. However, with respect to condonation of delay, the Id. AR submitted that the Id. CIT(A) should have condoned the delay as in the case of 72 cases before the Coordinate Benches across the country in the case of BSNL employees on identical facts and circumstances, delay has been condoned by the Id. CIT(A) itself ranging from 900 to 2000 days. The assessee has produced the list of 72 cases where the delay is condoned by the Id. CIT(A). Further in case of 144 appeals, the Coordinate Benches have condoned the delay in the case of BSNL employees on identical facts and circumstances. Thus on the parity itself, the appeal of the assessee should have been admitted by the Id. CIT(A). Accordingly, I reverse the order of the Id. CIT(A) in not condoning the delay.”

11.

From the findings given by the Coordinate Bench of the ITAT, Bengaluru, we find that, in identical cases of BSNL employees, the delay has been condoned by the learned Addl./JCIT(A) himself in a number of cases, even though the delay ranged between 900 days and 2000 days. The Tribunal further noted that, in more than 144 cases, the Coordinate Benches of the Tribunal have condoned the delay in the cases of BSNL employees on identical facts and circumstances. Since the issue of condonation of delay in the cases of BSNL employees has already been considered by various Benches of the Tribunal after examining the reasons given by the assessees in the petitions filed for explaining the delay, in our considered view, by respectfully following the decision of the ITAT, Bengaluru Bench in the case of Basappa Balarama and Murthy Rangappa (supra), the delays involved in the relevant appeals deserve to be condoned. Thus, we condone the delay in filing the appeals before the learned Addl./JCIT(A), wherever applicable.”

11.1. It is further noted that, the Hon'ble High Court for the State of Telangana in the case of Sri Vissamsetty Ramakrishna vs. PCIT-4 and two others (supra), has considered an identical issue of claim of exemption under Section 10(10B) of the Act, in light of challenging the order passed by the Pr.CIT-4 under Section 119(2)(b) of the Income- tax Act, 1961 rejecting the application filed by the assessee seeking permission to file revised returns of income for making a claim under Section 10(10B) of the Act, and while allowing the Writ Petition filed by the assessee, quashed the impugned order and remitted the matter to respondent No.1 with a direction to permit the petitioner to file/submit revised returns of income for claiming exemption u/s 10(10B) of the Act, and thereafter consider the claim on merits. The relevant findings of the Hon'ble High Court are as under:

"6. When we look into the averments made in respect of identical claims being allowed by the Benches of Income Tax Appellate Tribunal at Chandigarh, Ahmedabad, Pune, Mumbai, Indore and Bangalore, in identically placed BSNL retirees, this Court is of the considered view that when similar fact was brought to the notice of the respondent-Department, the respondents ought to have appreciated the bona fides of the petitioner and the application filed by the petitioner under Section 119(2)(b) of the Act seeking condonation of delay to file revised ITRs for the Assessment Years 2020-21 and 2021- 22, ought to have been considered by the respondent- Department with a more pragmatic and liberal approach, by appreciating the genuine hardship that the petitioner had been put to or would be put to, in case if the application seeking for condonation is not allowed. 7. A plain reading of the impugned order does not disclose whether respondent No.1 had considered and appreciated the orders passed by Benches of Income Tax Appellate Tribunal at Chandigarh, Ahmedabad, Pune, Mumbai, Indore and Bangalore, in identically placed BSNL retirees, and also by other Commissioner of Income Tax (Appeals) in its proper perspective, more particularly, when those orders have not been challenged any further and they have attained finality.

8.

To make things worse for the respondent-Department, learned counsel for the petitioner has produced before the Court another order passed by the Income Tax Appellate Tribunal, Hyderabad 'SMC' Bench, at Hyderabad, dated 03.07.2026, wherein in a batch of appeals the lead matter being I.T.A.Nos.903 and 904/HYD/2026, wherein similar view had been reiterated by the Bench. In the said judgment, it appears that similar view has also been followed earlier by the Income Tax Appellate Tribunal, Chennai Bench in the case of Shri Sekar Gnanaprakasam vs. DCIT and also by the Income Tax Appellate Tribunal, Bengaluru Bench in the case of Basappa Balarama and Murthy Rangappa vs. Income Tax Officer, Ward 12, wherein the Coordinate Benches across the country have granted relief and condoned the delay.

9.

For all the aforesaid said reasons and also taking into consideration the consistent view taken by various Benches of the Tribunal across the country, we are inclined to allow the instant writ petition. The impugned order passed by respondent No.1 under Section 119(2)(b) of the Income Tax Act, 1961 bearing DIN and Letter No.ITBA/COM/F/17/2026- 27/1089643736(1), dated 12.06.2026, for the Assessment Years 2020-21 and 2021-22, stands quashed and set aside. The matter stands remitted to respondent No. 1. The petitioner herein is permitted to file /submit revised Income Tax returns. Thereafter, the respondent No.1 is directed to consider the case of petitioner on merits."

11.2. Accordingly, to maintain the rule of consistency when on identical facts the Tribunal has condoned the delay in filing the appeal before the learned CIT(A), the delay in filing the appeals by the assessee before the Addl./JCIT(A) is condoned and appeals are admitted for adjudication on merits.

12.

We have heard the learned Authorised Representative of the Assessee as well as learned DR on the merits of allowability of exemption u/sec.10(10B) of the Act. At the outset, it is noted that this Tribunal vide Order dated 15.07.2026 in the case of Raghavendra Latha Madhavi & 3 Others vs. ITO, Ward-9(1), Hyderabad & Others (supra), has considered an identical issue in Para nos.12 to 15 as under: “12. Having said so, let us come back to the issue on hand. Admittedly, the assessees in the present bunch of appeals are employees of BSNL and opted for the Voluntary Retirement Scheme - 2019 and received compensation in the relevant financial years. It is also an admitted fact that the assessees in the present cases had filed their respective returns of income and offered the compensation received from BSNL to tax and the same has been accepted by the A.O. in the intimation issued u/s 143(1) of the Act. However, the assessees in the present cases have made a fresh claim of exemption towards 100% compensation received from BSNL under the Voluntary Retirement Scheme - 2019 u/s 10(10B) of the Act, for the first time before the respective learned Addl./JCIT(A) and the claims made by the assessees were rejected on technical grounds. In other words, in all these cases, the claims made by the assessees have been rejected without examining the merits of the claims in light of the provisions of section 10(10B) of the Income-tax Act, 1961.

13.

The learned counsel for the assessees has cited a plethora of judicial precedents, including the decisions of various Benches of the Tribunals and we find that, in a number of cases, the Coordinate Benches of the Tribunal across the country have taken a consistent view and held that compensation received by the employees of BSNL under the Voluntary Retirement Scheme - 2019 is exempt u/s 10(10B) of the Act and further directed the A.O. to allow exemption in respect of 100% of the compensation received from BSNL u/s 10(10B) of the Act by accepting the revised statement of total income filed by the assessees and also directed the A.O. to determine the tax payable/refundable, if any, as per law.

14.

We further note that, the Coordinate Bench of the ITAT, Chennai Bench in the case of Shri Sekar Gnanaprakasam Vs. DCIT in ITA Nos.1608 & 1609/CHNY/2026, dated 21.05.2026, under an identical set of facts, held as under:

“11. We have heard the rival submissions and perused the material available on record, including the written submissions filed by the assessee and the judicial precedents relied upon. The short issue involved in the present appeals is whether the ex-gratia compensation received by the assessee under the BSNL VRS-2019 scheme is eligible for exemption u/s.10(10B) of the Act. From the materials placed before us, it is evident that the BSNL VRS-2019 scheme was formulated pursuant to the revival package approved by the Government of India and the Union Cabinet on 23.10.2019. It is further borne out from the records that the compensation payable under the scheme was funded through Government budgetary support. During the course of hearing, the assessee present submitted that though the nomenclature is mentioned as VRS, it is in effect a retrenchment scheme, since BSNL could not pay salary to employees just before rolling out the scheme. Therefore, the scheme partakes the character of a Government-approved retrenchment compensation scheme and cannot be treated as an ordinary voluntary retirement scheme simpliciter.

12.

We further find that identical issue had come up for consideration before the Chandigarh Bench of the Tribunal in the case of Harish Kumar vs. ITO, wherein the Tribunal held that the ex-gratia compensation received under BSNL VRS-2019 is eligible for exemption u/s.10(10B) of the Act. Similar view has also been consistently taken by various appellate authorities across the country in the cases relied upon by the assessee. The Revenue has not brought on record any contrary judicial precedent to take a different view in the matter. 13. Considering the facts and circumstances of the case and respectfully following the judicial precedents cited supra, we hold that the ex-gratia compensation received by the assessee under the BSNL VRS-2019 scheme is eligible for exemption u/s.10(10B) of the Act. Consequently, the additions made by taxing the ex- gratia compensation are directed to be deleted. The AO is also directed to grant consequential relief, in accordance with law, in respect of exemption claimed u/s.10(10AA) of the Act, if otherwise found eligible.”

15.

In this view of the matter and considering the facts and circumstances of the case and also by respectfully following the decisions of the Coordinate Benches of the Tribunals referred to hereinabove, we are of the considered view that the compensation received by the assessees in the present cases from BSNL under the Voluntary Retirement Scheme – 2019 is exempt u/s 10(10B) of the Act. Therefore, we direct the A.O. to verify the claim of the assessees in the light of our findings given hereinabove and allow exemption claimed by the assessees under section 10(10B) of the Act and determine the tax payable/refundable, if any, to the respective assessees and grant interest admissible under section 244A of the Income-tax Act, 1961 wherever claimed and otherwise admissible, as per law.”

13.

Thus, it is manifest from the record that the Tribunal has taken a consistent view on this issue arising from identical facts. Accordingly, to maintain the rule of consistency and by following earlier decision of this Tribunal (supra), the compensation received by the assessee from the BSNL under VRS Scheme – 2019 is held as exempt u/sec.10(10B) of the Act. Hence, the Assessing Officer is directed to verify the claim of the assessee in light of the above findings and allow the exemption claimed by the assessee u/sec.10(10B) of the Act and then, determine the tax payable/refundable amount, if any, to the assessee. The Assessing Officer is also directed to grant the interest admissible u/sec.244A of the Act, if any, as per law.

14.

In the result, both the appeals of the Assessee are allowed for statistical purposes. A copy of this common order is placed in the respective case files

Order pronounced in the open court on 04.11.2026.

Sd/- Sd/- MANJUNATHA G. VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 04th day of November, 2026 VBP Copy to: PADMAVATHI SARIPELLA, 1-9-9/8/1, FLAT NO. 111, METRO RESIDENCY, 1 MUSHEERABAD, HYDERABAD-500020, TELANGANA ITO, WARD-13(3), 2 O/O ITO, WARD-13(3), HYDERABAD-, TELANGANA 3 THE PR. CIT, HYDERABAD. 4 THE D.R., ITAT, HYDERABAD SMC-BENCH, HYDERABAD. 5 GUARD FILE TRUE COPY Digitally signed VADREVU by VADREVU PRASADA RAO PRASADA Date: ASSISTANT REGISTRAR / RAO 2026.11.04 I.T.A.T., HYDERABAD 15:20:47 +05'30'

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