Prathibha Jgadish Unawane Vs ITO (ITAT Pune)
The ITAT Pune considered whether compensation received by BSNL employees under the BSNL Voluntary Retirement Scheme, 2019 constituted retrenchment compensation exempt under Section 10(10B) of the Income-tax Act or was taxable subject only to the exemption under Section 10(10C). The assessees had originally claimed exemption under Section 10(10C) and later sought exemption under Section 10(10B) before the CIT(A). In some cases, the CIT(A) rejected the appeals on account of delay, while in others the new claim was not entertained as it had not been made through a revised return.
The Tribunal held that the delay in filing the appeals deserved to be condoned, observing that the assessees had acted on professional advice and that substantial justice prevailed over procedural delay. It noted that identical issues had consistently been decided in favour of BSNL employees by the Coordinate Benches of ITAT Chandigarh, Ahmedabad and Pune. It also observed that no contrary High Court decision had been produced by the Revenue.
Following the earlier Tribunal decisions, the Tribunal held that compensation received under the BSNL Voluntary Retirement Scheme, 2019 pursuant to the Government’s revival plan constituted retrenchment compensation falling under Section 10(10B), and not Section 10(10C). It held that such compensation was a capital receipt exempt from tax. The Tribunal rejected the impugned findings of the CIT(A), directed the assessees to submit revised computations before the jurisdictional Assessing Officers claiming exemption under Section 10(10B), and directed the Revenue authorities to verify the claims, recompute tax liability, and grant consequential refunds, if admissible. Accordingly, all the appeals were allowed.
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