Jayeshkumar Tulsidas Sutaria Vs ITO (ITAT Ahmedabad)
Fresh Claim of VRS Exemption Allowed at Appellate Stage – CIT(A) Cannot Reject Appeal for Non-claim in Return – BSNL VRS Compensation Held Exempt u/s 10(10B) – ITAT Ahmedabad
In this case, the assessee, a BSNL employee, received compensation under BSNL VRS-2019 but offered the amount to tax in the return due to lack of awareness of exemption u/s 10(10B). CPC issued intimation u/s 143(1) without granting exemption. The assessee later claimed exemption before CIT(A) relying on judicial precedents, but CIT(A) dismissed the appeal stating that exemption was not claimed in the return and advised filing revised return through PCIT condonation route.
ITAT held that appellate authorities have wide powers to entertain fresh legal claims even if not made in the return and CIT(A) erred in refusing to adjudicate the issue on merits. The Tribunal observed that BSNL VRS-2019 compensation eligible under Rule 2BA qualifies for exemption u/s 10(10B) and since the income itself was not taxable, the assessee was entitled to refund of TDS. Accordingly, the orders of CIT(A) were set aside and both appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The captioned two appeals have been filed by the Assessee against the orders passed by the learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi, vide orders dated 14.10.2025, for the Assessment Years 2020-21 and 2021-22. Since the issues involved in both the appeals are common and identical, we extract the grounds of appeal raised in ITA No.2387/Ahd/2025 for Assessment Year 2020-21 for the purpose of adjudication. The decision rendered in the said appeal shall apply mutatis mutandis to the other appeal bearing ITA No. 2388/Ahd/2025 for Assessment Year 2021-22.
