Rajendra Himmatrao Patil 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. The assessees had originally offered the compensation to tax after claiming exemption under Section 10(10C) and subsequently claimed exemption under Section 10(10B) before the CIT(A). The CIT(A) had either dismissed the appeals on the ground of delay or declined to entertain the fresh claim on the ground that it had not been made through a revised return.
The Tribunal held that the delay in filing the appeals deserved to be condoned, noting that the assessees had acted on professional advice and later raised the claim following favourable Tribunal decisions. It observed that identical issues had already been decided in favour of BSNL employees by the Coordinate Benches of ITAT Pune, Ahmedabad and Chandigarh. It also noted that the Revenue had not produced any contrary High Court decision.
Following its earlier decisions, the Tribunal held that the compensation received under the BSNL Voluntary Retirement Scheme, 2019 pursuant to the Government’s revival plan was retrenchment compensation covered by Section 10(10B), not Section 10(10C), and constituted a capital receipt exempt from tax. It further directed the assessees to file revised computations before the jurisdictional Assessing Officers claiming exemption under Section 10(10B), after which the Revenue authorities were directed to verify the claims, recompute tax liability, and grant refunds, if admissible. The orders of the CIT(A) were set aside and all the appeals were allowed.
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