Kirtida Rajeshkumar Shah Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, heard the assessee’s appeal against the order of the Addl./Joint Commissioner of Income Tax (Appeals)-2, Kolkata dated 26.11.2025 for Assessment Year 2021-22.
The assessee challenged the appellate order on multiple grounds. It was contended that the Commissioner (Appeals) erred in refusing to condone the delay in filing the appeal despite the delay having occurred due to the assessee’s bona fide ignorance regarding the availability of exemption under Section 10(10B) of the Income-tax Act, 1961 and lack of legal knowledge. The assessee also contended that the Commissioner (Appeals) wrongly treated the exemption claim as a new claim, ignored the appellate authority’s powers to grant legitimate relief, dismissed the appeal without deciding the merits despite the decision in Harish Kumar vs. ITO, and passed the order without granting reasonable opportunity of hearing or issuing statutory notice under Section 250 of the Act.
The assessee was a retired employee of Bharat Sanchar Nigam Limited (BSNL) who had received compensation under the BSNL Voluntary Retirement Scheme, 2019 (BSNL VRS-2019). According to the assessee, the compensation fully complied with the conditions prescribed under Rule 2BA of the Income-tax Rules, 1962, making it eligible for exemption under Section 10(10B) of the Income-tax Act, 1961. However, due to lack of awareness of the legal provisions while filing the return of income, the compensation was inadvertently offered to tax.
The assessee submitted that, following the decision of the ITAT Chandigarh Bench in Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025 dated 30.05.2025), compensation received under the same BSNL VRS-2019 had been held exempt under Section 10(10B). On that basis, the assessee sought exemption for the VRS compensation and the consequential refund.
After hearing both parties and examining the material on record, the Tribunal noted that both sides fairly agreed that the issue raised in the present appeal was covered by the Tribunal’s earlier decision in Jayeshkumar Tulsidas Sutaria Vs. ITO for Assessment Years 2020-21 and 2021-22 in ITA Nos. 2387 & 2388/Ahd/2025, dated 17.02.2026.
The Tribunal reproduced the operative portion of its earlier order, wherein it had recorded that the assessee had inadvertently offered BSNL VRS-2019 compensation to tax due to lack of awareness of the legal provisions. That order further noted that, following the decision of the ITAT Chandigarh Bench in Harish Kumar vs. ITO Ward 5(5), Chandigarh, compensation received under the same BSNL VRS-2019 scheme was held to be exempt under Section 10(10B). The Tribunal had also observed that the assessee had raised the claim before the Commissioner (Appeals) and, since the income was not taxable, the assessee was entitled to the refund of the tax deducted at source. Accordingly, both appeals in that case had been allowed.
The Tribunal observed that no change in the factual matrix or legal proposition had been brought to its notice in the present appeal. Following its earlier decision, the Tribunal allowed the assessee’s appeal.
The order was pronounced in the open court on 23.04.2026.
Cases Discussed
- Jayeshkumar Tulsidas Sutaria Vs. ITO (ITAT Ahmedabad), ITA Nos. 2387 & 2388/Ahd/2025 dated 17.02.2026
- Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITAT Chandigarh), ITA No. 42/CHD/2025 dated 30.05.2025
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The captioned appeal has been filed by the Assessee against the orders passed by the learned Addl/Jt. Commissioner of Income Tax (Appeals)-2, Kolkata vide order dated 26.11.2025 for the Assessment Year 2021-22.
2. The Assessee has taken the following ground of appeal:-
1. The Lit. CIT(A) has erred in law and on facts in refusing to condone the delay in filing the appeal without appreciating that the delay occurred solely due to the Appellants bonafide ignorance regarding the availability of exemption under Section 10(108) and lack of legal knowledge These circumstances constitute a reasonable cause within the meaning of Section 249(3) of the Income-tax Act. 1961. The Ld. CIT(A) failed to apply the settled legal principles laid down by the Honorable Supreme Court in rd. Collector, Land Acquisition vs. Katiji and Lrd N. Balakrishnan vs. M. Krishnamurthy, wherein it has been held that substantial justice must prevail over technicalities and that the length of delay is immaterial when the explanation is bona fide
2. The Ld. CIT(A) has erred in holding that the Appellant is making a new claim, ignoring that appellate authorities have plenary powers to grant all legitimate reliefs, even if not claimed in the return, as mandated by CBDT Circular No. 14 of 1955 and upheld by various judicial precedents including decisions of the Hon’ble Supreme Court and High Courts.
3. The Ld. CIT(A) has erred in dismissing the appeal at the threshold without appreciating that the Appellants case is factually identical to Harish Kumar vs. ITO. (ITA No. 42/CHD/2025), where compensation received under the same BSNL VRS-2019 was held fully exempt under Section 10(108) The Ld. CIT(A) failed to adjudicate the merits despite the existence of a legitimate, legally sustainable, and directly applicable claim under Section 10(108).
4. The Ld. CIT(A) has passed the impugned order without granting reasonable opportunity of hearing and without issuing statutory notice under Section 250 of the Act during appellate proceedings. The order is thus vitiated for breach of natural justice and is bad in law.
3. The assessee is a retired employee of Bharat Sanchar Nigam Limited (BSNL) received compensation under the BSNL Voluntary Retirement Scheme, 2019 which is in full compliance with the conditions prescribed under Rule 2BA of the Income Tax Rules, 1962, and is thus eligible for exemption under Section 10(108) of the Income Tax Act, 1961. However, due to lack of awareness of the legal provisions at the time of filing the income tax return, the Appellant inadvertently offered the said compensation to tax. Subsequently, based on the decision of the Hon’ble ITAT, Chandigarh Bench in the case of Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025 dated 30.05.2025), where compensation received under the same BSNL VRS-2019 was held to be exempt under Section 10(108), the assessee now seeks exemption of such compensation. The Appellant, therefore, prays that the compensation received under the VRS be directed to be treated as exempt, and the consequential refund be granted.
4. Heard the argument of both the parties and perused the material available on record.
5. At the outset, both the parties fairly submitted that the issue raised by the assessee in the present appeal stands covered by the order of the Tribunal in the case of Jayeshkumar Tulsidas Sutaria Vs. ITO for A.Ys 2020-21 & 2021-22 in ITA Nos.2387 & 2388/Ahd/2025 dated 17.02.2026. For the sake of ready reference, the operative portion of said order is reproduced as under:
“…6. The Ld. Counsel for the assessee submitted that due to lack of awareness of the legal provisions at the time of filing the return of income, the assessee inadvertently offered the compensation received under BSNL VRS-2019 to tax. Subsequently, based on the decision of the Hon’ble ITAT Chandigarh Bench in Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025 dated 30.05.2025), wherein compensation under the same BSNL VRS-2019 scheme was held to be exempt under section 10(10B), the assessee now seeks exemption of such compensation. We find that the assessee filed the claim before the Ld. CIT(A) and since the income of the assessee is not taxable, the assessee is eligible for the refund of the TDS.
7. In the result, both the appeals of the assessee are allowed. …”
6. In the absence of any change in factual matrix and legal proposition brought to our notice, the appeal of the assessee is hereby allowed.
7. In the result, the appeal filed by the assessee is allowed.
This Order pronounced in Open Court on 23.04.2026.
