Kantibhai Velabhai Chaudhari Vs ITO (ITAT Ahmedabad)
Ahmedabad ITAT Grants BSNL VRS Exemption, Condones Delay and Orders Refund Despite Belated Claim
The Ahmedabad ITAT partly allowed the appeals of Kantibhai Velabhai Chaudhari for AYs 2020-21 and 2021-22, holding that the compensation received under BSNL VRS-2019 is fully exempt under Section 10(10B). The assessee had originally offered the VRS compensation to tax because of lack of awareness of the exemption and the fact that TDS had been deducted by BSNL. Subsequently, relying on judicial precedents, he filed belated appeals seeking exemption and refund of the taxes paid. However, the CIT(A) dismissed both appeals solely on the ground of delay.
The Tribunal followed its earlier decisions in Jayeshkumar Tulsidas Sutaria, Kirtida Rajeshkumar Shah, and Chhaganlal Bhimabhai, wherein compensation received under the same BSNL VRS-2019 scheme was held to be exempt under Section 10(10B). It observed that substantial justice must prevail over technicalities, relying on the Supreme Court’s decision in Collector, Land Acquisition v. Katiji, and reiterated that CBDT Circular No. 14 of 1955 obliges tax authorities to assist taxpayers in securing legitimate reliefs rather than taking advantage of their ignorance. The Tribunal also clarified that the Supreme Court’s decision in Goetze (India) Ltd. does not restrict the appellate authorities from entertaining a fresh claim not made in the return.
Accordingly, the Tribunal held that the assessee was entitled to exemption under Section 10(10B) in respect of ₹13.14 lakh (AY 2020-21) and ₹40.86 lakh (AY 2021-22) received under BSNL VRS-2019. It directed the Assessing Officer to recompute the taxable income, grant the exemption, and issue the consequential refund, subject to verification of the compensation details and revised computation furnished by the assessee. Both appeals were partly allowed.
Cases Discussed
- Jayeshkumar Tulsidas Sutaria Vs. The Income Tax Officer, Ward 7(2)(1), Ahmedabad (ITAT Ahmedabad), ITA Nos.2387 & 2388/AHD/2025 (Assessment Years: 2020-21 & 2021-22)
- Kirtida Rajeshkumar Shah Vs. The Income Tax Officer, Ward 7(2)(1), Ahmedabad (ITAT Ahmedabad), ITA Nos.151/AHD/2026 (Assessment Year: 2020-21)
- Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITAT Chandigarh), ITA No. 42/CHD/2025 dated 30/05/2025
- Chhaganlal Bhimabhai Vs. The Income Tax Officer, Ward 1(2), Bhavnagar (ITAT Ahmedabad), ITA Nos.2547 & 2548/AHD/2025 (Assessment Years: 2020-21 & 2021-22)
- Goetze (India) Ltd V CIT (Supreme Court), 284 ITR 323
- Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors. (Supreme Court), (1987) 167 ITR 471 (SC)
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
1. These are two appeals filed by the same Assessee against two separate Orders passed by the Commissioner of Income Tax, Appeal ADDL/JCIT(A)-2 Pune [hereinafter referred to as ‘the CIT(A)’] for the Assessment Years 2020-2021 and 2021-2022. Since the issues involved in both the appeals are common and arise from the same factual matrix, both the appeal were heard together and are, therefore, being disposed by way of a common order.
