Vadone Krishnamurthy Rao Jamuna Vs ITO (ITAT Bangalore)
Double Retirement Relief for BSNL Employee: VRS Compensation Fully Exempt u/s 10(10B) & ₹25-Lakh Leave Encashment Limit u/s 10(10AA) Applied Retrospectively—Bangalore ITAT
Summary: The Bangalore Bench of the Income Tax Appellate Tribunal allowed both appeals filed by Vadone Krishnamurthy Rao Jamuna for AYs 2020-21 and 2021-22. The first issue concerned ex gratia compensation received under the BSNL Voluntary Retirement Scheme, 2019. The assessee received Rs. 12,55,224/- in AY 2020-21 and Rs. 27,55,075/- in AY 2021-22. In AY 2020-21, he had claimed only Rs. 5 Lakhs exemption under section 10(10C), while no exemption was claimed in AY 2021-22. The returns were processed under section 143(1). The claim that the compensation was exempt under section 10(10B) was raised for the first time before the CIT(A), but the CIT(A) dismissed the appeals on delay without entertaining the fresh claim.
Before the Tribunal, the assessee relied upon a series of Coordinate Bench decisions concerning BSNL VRS, 2019. The Tribunal recorded ten such decisions from the Chandigarh, Ahmedabad, Pune, Mumbai, Chennai and Bangalore Benches, including Harish Kumar vs ITO Ward 5(5) Chandigarh, Suman Nandlal Rava, Hayeshkumar Tulsidas Sutaria, Shraddha Prahlad Arote and Others, Meghmala Sudhir Pathak and Others, Rajendra Himmatrao Pati and Others, Bajirao Shankar Jagadale, Prathibha Jagadish Unawane and Others, Sri Sekar Gnanaprakasham, and Renuka Narasimha Prabhu and Others. It found that the Coordinate Benches had consistently held that retrenchment compensation received from BSNL was allowable as an exemption under section 10(10B). Following those precedents, the Tribunal directed the AO to allow exemption under section 10(10B) in respect of compensation received under the BSNL VRS-2019 Scheme, subject to verification of necessary details.
