Nanak Chand Vs ITO (ITAT Delhi)
Summary: The assessee, Sh. Nanak Chand, an employee retired from Bharat Sanchar Nigam Ltd. (BSNL), challenged the order of the Commissioner of Income Tax (Appeals)/Addl./JCIT(A)-1, Lucknow dated 13.03.2026 arising from proceedings under section 143(1) of the Income-tax Act, 1961. The assessee had claimed exemption of Rs.10,31,196/- under section 10(10B), but the lower authorities rejected the claim. The assessee had retired from BSNL under the VRS scheme, 2019 and had claimed exemption under section 10(10C).
The assessee relied upon the co-ordinate Bench decision of ITAT Pune dated 29.04.2026 in Prathibha Jagadish Unawane Vs. ITO, where compensation received from BSNL under the Voluntary Retirement Scheme, 2019 had been held to be retrenchment compensation and a capital receipt exempt under section 10(10B), rather than compensation covered by section 10(10C). The Pune Bench had considered the Government’s revival plan for BSNL and MTNL, the reduction of workforce through BSNL VRS-2019 and the ex-gratia compensation paid to employees.
The Revenue opposed the claim, contending that the assessee had not made the claim in the original return and should have claimed it through a revised return. It was also argued that BSNL VRS-2019 was a voluntary retirement scheme forming part of a revival package and that the assessee was eligible only for the Rs.5 lakh exemption under section 10(10C). In written submissions, the Revenue relied upon the distinction between a going concern undergoing revival and an undertaking being closed down, contending that the reasoning in Hindustan Photo Film Workers’ Welfare Centre could not automatically be extended to BSNL. It also relied on the exclusion of voluntary retirement from the definition of “retrenchment” under section 2(oo) of the Industrial Disputes Act, 1947.
