Ramesh Bhimshankar Budwatrao Vs ITO (ITAT Pune)
Pune ITAT: BSNL VRS Compensation Fully Exempt u/s 10(10B); Delay in Appeal Condoned
In a batch of 36 appeals involving former BSNL employees for AYs 2020-21 and 2021-22, the Pune ITAT held that compensation received under the BSNL Voluntary Retirement Scheme (VRS), 2019 is in the nature of retrenchment compensation and qualifies for exemption under section 10(10B) of the Income-tax Act, rather than the limited exemption of ₹5 lakh available under section 10(10C).
The Tribunal observed that the employees had originally offered the VRS compensation to tax based on professional advice and later claimed full exemption before the appellate authorities. It held that substantial justice should prevail over technicalities, and therefore delays in filing appeals deserved condonation, particularly when the claim arose from subsequent judicial developments. Relying on earlier Pune, Ahmedabad and Chandigarh Bench decisions, the Tribunal held that the BSNL VRS formed part of a Government-directed workforce reduction exercise under the BSNL revival package and the compensation received thereunder was exempt under section 10(10B).
The Revenue’s contention that BSNL VRS was merely a voluntary retirement scheme covered only by section 10(10C) was rejected. The Tribunal noted that identical issues had already been decided in favour of assessees and no contrary jurisdictional High Court decision was brought on record. It also emphasized the need for consistency in judicial decisions, particularly when several CIT(A) orders granting the exemption had been accepted by the Department.
Accordingly, the Tribunal directed the assessees to file revised computations before their respective Assessing Officers claiming exemption under section 10(10B), and directed the Revenue to recompute tax liability and grant consequential refunds after verification. All the appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeals at the instance of respective assessee(s) pertaining to A.Ys. 2020-21 and 2021-22 are directed against the separate orders framed by the Learned Additional/Joint Commissioner of Income Tax (Appeals) [Ld. Addl./JCIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’).
