Meghmala Sudhir Pathak Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT), Pune, decided a batch of appeals concerning assessment years 2020–21 and 2021–22 arising from intimation orders under Section 143(1)(a) of the Income-tax Act. The common issue across these appeals was whether compensation received by employees of Bharat Sanchar Nigam Limited (BSNL) under the Voluntary Retirement Scheme (VRS), 2019 constituted retrenchment compensation and a capital receipt exempt under Section 10(10B), or whether it was taxable subject to the limited exemption under Section 10(10C).
The assessees, employees of BSNL under the administrative control of the Department of Telecommunications, received ex-gratia payments under a government-approved revival plan aimed at reducing workforce by offering voluntary retirement to employees aged 50 years and above. Initially, the assessees offered such compensation to tax while claiming exemption up to ₹5 lakh under Section 10(10C). Subsequently, they raised a claim before the Commissioner of Income Tax (Appeals) [CIT(A)] that the entire compensation should be exempt under Section 10(10B) as retrenchment compensation. In several instances, the CIT(A) either dismissed the appeals due to delay or declined to admit the new claim on the ground that it was not made in the original or revised return.
Before the Tribunal, the assessees contended that appellate authorities are empowered to entertain new claims to determine correct tax liability, relying on judicial precedent. The Tribunal accepted this position and held that such claims can be considered even if not raised earlier.
