Neeraj Dhamija Vs ITO (ITAT Delhi)
BSNL VRS Exemption Allowed Even in Section 154 Proceedings: Delhi ITAT
Can a BSNL retiree seek exemption for VRS compensation through a rectification proceeding? In Neeraj Dhamija v. ITO, ITA Nos. 6474 and 6475/Del/2026, the Delhi Bench of the ITAT has allowed the employee’s Section 10(10B) claim for AYs 2020–21 and 2021–22, although the appeals arose from orders under Section 154.
The order records pronouncement on 7 September 2026 and is dated 28 September 2026 on its final page. It follows the favourable line of Tribunal decisions concerning the BSNL Voluntary Retirement Scheme, 2019.
The claim and the amounts involved
The assessee was a retired BSNL employee. He had received amounts under the 2019 scheme and claimed exemption under Section 10(10B). The disputed amounts were ₹11,27,706 for AY 2020–21 and ₹24,75,190 for AY 2021–22. The lower authorities rejected the claims, leading to the two appeals before the Tribunal.
Ordinarily, compensation received under a qualifying voluntary retirement scheme is considered under Section 10(10C), which provides an exemption subject to a ₹5 lakh ceiling. The assessee’s case was different: he contended that the BSNL payment was, in substance, retrenchment compensation falling under Section 10(10B).
The distinction was financially significant. If the receipt was dealt with only under Section 10(10C), the amount exceeding ₹5 lakh would remain exposed to tax. The assessee therefore relied on earlier Tribunal decisions that had examined the circumstances of the BSNL scheme and accepted the Section 10(10B) claim.
