Sanjay Bajarang Todali Vs ITO (ITAT Pune)
Compensation received by BSNL employees under BSNL VRS-2019 constitutes retrenchment compensation exempt under section 10(10B) as a capital receipt, and such exemption cannot be denied merely because the claim was raised for the first time before the appellate authority or due to procedural objections.
Core Issue Whether the ex-gratia compensation received by BSNL employees under BSNL Voluntary Retirement Scheme (VRS)-2019 is taxable as voluntary retirement compensation eligible only for exemption under section 10(10C) or is in the nature of retrenchment compensation fully exempt under section 10(10B); and whether such exemption can be claimed for the first time before the appellate authority despite not being claimed in the original return of income.
Facts The assessees, all former employees of Bharat Sanchar Nigam Limited (BSNL), opted for BSNL VRS-2019, introduced pursuant to the Central Government’s revival package for BSNL/MTNL. While filing their returns for AYs 2020-21 and 2021-22, they treated the compensation as voluntary retirement compensation and claimed exemption of Rs.5 lakh under section 10(10C), offering the balance amount to tax. Subsequently, relying upon favourable judicial precedents, they contended before the appellate authorities that the compensation was actually retrenchment compensation under a Government-approved forced retirement scheme, constituting a capital receipt exempt under section 10(10B). The appellate authorities rejected the claims on grounds including delay in filing appeals, non-maintainability, or that a fresh claim could not be entertained without filing a revised return.
