Sameer Yadram Sharma Vs ITO (ITAT Pune)
In , the Pune Bench of the Income Tax Appellate Tribunal (ITAT) dealt with a batch of appeals concerning employees of Bharat Sanchar Nigam Limited (BSNL) for Assessment Years 2020-21 and 2021-22. The central issue before the Tribunal was whether the amounts received by BSNL employees under the BSNL Voluntary Retirement Scheme (VRS), 2019 constituted retrenchment compensation eligible for exemption under Section 10(10B) of the Income Tax Act or voluntary retirement compensation taxable subject to limited exemption under Section 10(10C).
The assessees argued that the issue was already covered by the Tribunal’s earlier decision in Prathibha Jagdish Unawane vs. ITO and related cases, where compensation received under BSNL VRS-2019 was treated as retrenchment compensation exempt under Section 10(10B). The Department contended that the payments were made under a voluntary retirement scheme and therefore only exemption under Section 10(10C), limited to Rs.5 lakh, was available. The Department also argued that the claims under Section 10(10B) were not made in the original returns and should have been raised through revised returns.
The Tribunal examined the earlier consolidated order in Prathibha Jagdish Unawane and other connected cases. It noted that BSNL and MTNL were covered under a revival package approved by the Union Cabinet on 23.10.2019. As part of the revival package, BSNL introduced the Voluntary Retirement Scheme, 2019 for employees aged 50 years and above in order to reduce workforce. Ex-gratia compensation was paid to employees opting under the scheme.
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