Jashvantbhai Ashabhai Patel Vs ITO (ITAT Ahmedabad)
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) under Section 250 of the Income-tax Act, 1961, for Assessment Year 2021-22. The principal issue was whether compensation received under the BSNL Voluntary Retirement Scheme (VRS)-2019 was eligible for exemption under Section 10(10B) of the Act, despite the assessee not claiming the exemption in the original or revised return of income.
The assessee, a salaried employee of BSNL, opted for the Government-approved BSNL VRS-2019 scheme. The compensation of ₹12,14,116 received under the scheme was disclosed in the return of income and offered to tax. According to the assessee, this was done due to lack of awareness regarding the exemption available under Section 10(10B). Tax had also been deducted at source by the employer. No exemption was claimed in either the original or revised return, and the CPC processed the return under Section 143(1) without granting the exemption. No rectification or appeal was initiated at that stage.
The assessee later became aware of a decision of the ITAT Chandigarh Bench holding that compensation received under the BSNL VRS-2019 scheme was eligible for exemption under Section 10(10B), subject to compliance with Rule 2BA. Based on that decision, the assessee sought exemption and contended that the amount represented retrenchment compensation received under a Government-approved scheme and was fully exempt from tax.
