Prathibha Jgadish Unawane Vs ITO (ITAT Pune)
The appeals involved a common issue for AYs 2020-21 and 2021-22 regarding whether compensation received by BSNL employees under the BSNL Voluntary Retirement Scheme (VRS), 2019 constituted retrenchment compensation exempt under Section 10(10B) of the Income-tax Act, 1961. The assessees had originally offered the compensation to tax after claiming exemption of ₹5 lakh under Section 10(10C), and subsequently, for the first time before the CIT(A), claimed that the entire compensation was exempt under Section 10(10B). In certain cases, the CIT(A) dismissed the appeals on account of delay, while in others, the new claim was rejected on the ground that it had not been made through a revised return.
The assessees contended that the delay occurred due to lack of awareness regarding the availability of exemption under Section 10(10B) and relied upon consistent decisions of the ITAT Chandigarh, Ahmedabad and other Benches granting relief in identical cases. The Revenue argued that the claim should have been made through a revised return and that compensation under BSNL VRS was covered only by Section 10(10C). It further submitted that BSNL VRS was a voluntary retirement scheme forming part of a revival package and not retrenchment within the meaning of Section 10(10B).
