Smt.Rama Devi Kotamraju Vs ITO (ITAT Hyderabad)
BSNL VRS-2019 Compensation Eligible for Full Exemption U/s 10(10B); Hyderabad ITAT Condones 1,404-Day Delay
In Smt. Rama Devi Kotamraju v. ITO (ITA No.1282/Hyd/2026, AY 2021-22), the Hyderabad ITAT considered the taxability of ex-gratia compensation received by a BSNL employee under VRS-2019. The assessee had originally offered the compensation to tax after claiming only the ₹5 lakh exemption under Section 10(10C). Subsequently, on becoming aware that the compensation was claimed to be fully exempt as retrenchment compensation under Section 10(10B), she filed an appeal, but with a delay of 1,404 days, which the Addl/JCIT(A) refused to condone.
The ITAT noted that in Nizamuddin Gooty & Others, delays ranging from 1,114 to 1,826 days in similar BSNL cases had already been condoned. It also relied upon the Telangana High Court ruling in Sri Vissamsetty Ramakrishna v. PCIT, which held that genuine hardship in identical BSNL-retiree cases should be considered with a pragmatic and liberal approach. Accordingly, the Tribunal condoned the 1,404-day delay.
On merits, the Tribunal followed the consistent view of Coordinate Benches that compensation received under BSNL VRS-2019 is eligible for exemption under Section 10(10B). It noted that the scheme arose from the Government-approved BSNL revival package and had been treated in earlier decisions as being in substance a retrenchment scheme rather than an ordinary VRS.
However, the exemption was not granted unconditionally. The ITAT restored the matter to the AO to verify whether the assessee satisfies the statutory conditions of Section 10(10B), particularly whether she qualifies as a “workman” contemplated by the provision. Upon satisfaction of those conditions, the AO was directed to grant the exemption. The appeal was accordingly allowed for statistical purposes.
Cases Discussed:
- Sri Vissamsetty Ramakrishna Vs. PCIT & Others (Telangana High Court), Writ Petition No.19498 of 2026 dated 15.07.2026
- Nizamuddin Gooty & others Vs. Addl/JCIT (ITAT Hyderabad), ITA No.903, 904, 907 to 914, 921 to 924 /Hyd/2026 for A.Ys. 2020-21 & 2021-22
- Basappa Balarama and Murthy Rangappa vs. ITO (ITAT Bengaluru), ITA Nos.1342 & 1427/Bang/2026 dated 29.05.2026
- Shri Sekar Gnanaprakasam Vs. DCIT (ITAT Chennai), ITA Nos.1608 & 1609/CHNY/2026, dated 21.05.2026
- Bajirao Shankar Jagdale v. ITO (ITAT Mumbai), ITA No. 1389/Mum/2026 dated 10.04.2026
- Jayeshkumar Tulsidas Sutaria v. ITO (ITAT Ahmedabad), ITA Nos. 2387 it 2388/ Ahd/2025 dated 17.02.2026
- Harish Kumar vs. ITO (ITAT Chandigarh), ITA No. 42/CHD/2025 dated 30.05.2025
- CIT vs. Pruthvi Brokers ,tr Shareholders Pvt. Ltd. (Bombay High Court), (2012) 349 ITR 336 (Born.)
- Vijay Vishin Meghani vs. DCIT (Bombay High Court), [2017] 398 ITR 250 (Bombay)
- Goetze India Ltd vs CIT (SC), (2006) 284 ITR 323
- NTPC Ltd vs CIT (SC), (1998) 229 ITR 383
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal is filed by Smt. Rama Devi Kotamraju (“the assessee”), feeling aggrieved by the order passed by the Learned Addl/JCIT(A)-1 Nashik (“Learned Addl/JCIT(A)”) dated 24.02.2026 for the A.Y. 2021-22.
