Srimathi Chellaswamy Vs ITO (ITAT Hyderabad)
Hyderabad ITAT: BSNL VRS-2019 Compensation Eligible for Full Exemption u/s 10(10B); Delay up to 1,811 Days Condoned
The Hyderabad ITAT, in a consolidated order covering 13 appeals of former BSNL employees, held that compensation received under the BSNL Voluntary Retirement Scheme, 2019 (VRS-2019) is eligible for exemption under Section 10(10B) of the Income-tax Act, 1961, subject to verification of the statutory conditions. The employees had originally claimed only ₹5 lakh exemption under Section 10(10C) and offered the balance compensation to tax. They subsequently came to know that the compensation could be claimed as fully exempt under Section 10(10B) and filed appeals, in some cases after delays ranging from 503 to 1,811 days.
On the issue of delay, the Tribunal followed its earlier decision in Nizamuddin Gooty & Others, the Bangalore ITAT rulings in Basappa Balarama and Murthy Rangappa, and importantly the Telangana High Court judgment in Sri Vissamsetty Ramakrishna v. PCIT, which emphasised that condonation applications involving genuine hardship should be considered with a pragmatic and liberal approach. Accordingly, the ITAT condoned the delays.
On merits, the Tribunal reiterated the consistent view that BSNL VRS-2019 compensation qualifies for exemption under Section 10(10B). The fact that the assessees had not claimed the exemption in their original/revised returns did not justify rejection of the claim merely on technical grounds; the claim had to be examined on merits.
However, the ITAT did not grant the exemption mechanically to every employee. It restored the matter to the AO to verify whether each assessee satisfies the requirements of Section 10(10B), particularly whether the concerned employee qualifies as a “workman” contemplated by the provision. Upon such verification, the AO was directed to grant the exemption in accordance with law after giving reasonable opportunity to the assessees.
Cases Discussed:
- Sri Vissamsetty Ramakrishna Vs. PCIT & Others (Telangana High Court), Writ Petition No.19498 of 2026 dated 15.07.2026
- Nizamuddin Gooty & others Vs. Addl/JCIT (ITAT Hyderabad), ITA No.903, 904, 907 to 914, 921 to 924 /Hyd/2026 for A.Ys. 2020-21 & 2021-22
- Suman Nandlal Raval (ITAT Ahmedabad), ITA Nos. 2389 & 2390/Ahd/2025 dated 18.02.2026
- Jayeshkumar Tulsidas Sutaria (ITAT Ahmedabad), ITA Nos. 2387 & 2388/ Ahd/2025 dated 17.02.2026
- Basappa Balarama and Murthy Rangappa vs. ITO (ITAT Bengaluru), ITA Nos.1342 & 1427/Bang/2026 dated 29.05.2026
- Shri Sekar Gnanaprakasam Vs. DCIT (ITAT Chennai), ITA Nos.1608 & 1609/CHNY/2026, dated 21.05.2026
- Harish Kumar vs. ITO (ITAT Chandigarh), ITA No. 42/CHD/2025 dated 30.05.2025
- Goetze (India) Ltd. v. CIT, [284 ITR 323]
- CIT vs. Pruthvi Brokers & Shareholders Pvt. Ltd. (Bombay High Court), [2012] 349 ITR 336 (Bom)
- NTPC Ltd. vs. CIT (SC), [1998] 229 ITR 383 (SC)
- Collector, Land Acquisition vs. Mst. Katiji (SC), [1987] 167 ITR 471 (SC)
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
These 13 appeals filed by different assessees are directed against the separate orders passed by the Learned Addl/JCIT(A) relating to the assessment years 2020-21, 2021-22 & 2024-25, the details whereof are given in the cause title. Since identical facts and common issues are involved in all these appeals, they were heard together and are being disposed of by this consolidated order for the sake of convenience.
