Pravinkumar Ramjibhai Patel Vs ITO (ITAT Ahmedabad)
CIT(A)’s Rectification Reversing BSNL VRS Exemption Fails: Ahmedabad ITAT Allows Full Section 10(10B) Relief
Summary: The Ahmedabad Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal for Assessment Year 2021-22 and held that the compensation received under the BSNL VRS-2019 scheme was eligible for exemption under Section 10(10B) of the Income-tax Act, 1961. The appeal arose from the order dated 20.05.2026 passed by the CIT(A), NFAC, Delhi under Section 154 read with Section 250 of the Act.
The assessee was a salaried employee of Bharat Sanchar Nigam Limited (BSNL) who opted for the Government-approved VRS-2019. He received Rs.41,09,229/- under the scheme. The amount was disclosed in the return and tax was paid, and the employer had deducted tax at source. No exemption under Section 10(10B) was claimed in the original or revised return. The assessee subsequently became aware of the Tribunal’s decision in Harish Kumar vs. ITO Ward 5(5), Chandigarh, ITA No.42/CHD/2025 dated 30.05.2025, and sought exemption of the VRS compensation under Section 10(10B), subject to Rule 2BA compliance.
The source records that the CPC, Bengaluru had issued an intimation under Section 143(1) without granting the exemption and that no rectification or appeal had initially been pursued. The assessee later claimed the exemption before the CIT(A). The grounds also challenged the subsequent rectification proceedings under Section 154 read with Section 250 and contended that the issue involved examination of facts, statutory interpretation and judicial precedents and therefore could not be treated as a mistake apparent from the record. The assessee further relied on Tribunal decisions from Ahmedabad, Chandigarh, Mumbai and Pune and on the Madras High Court decisions in Hindustan Photo Film Workers Welfare Centre.
