Bajirao Shankar Jagdale Vs ITO (ITAT Mumbai)
ITAT Mumbai: BSNL VRS Compensation is Capital Receipt-Exempt u/s 10(10B); Delay Condoned
The Mumbai ITAT held that compensation received under the BSNL Voluntary Retirement Scheme (VRS) 2019 is in the nature of retrenchment compensation and qualifies for exemption under Section 10(10B), treating it as a capital receipt not liable to tax.
The CIT(A) had dismissed the appeal solely on the ground of significant delay (over 1300 days) and refused to entertain the claim as it was raised for the first time at the appellate stage. However, the Tribunal emphasized that substantial justice should prevail over procedural technicalities, especially when the issue is already settled in favour of the assessee by consistent Tribunal rulings.
The ITAT condoned the delay, noting that it was due to bona fide reasons including lack of awareness and reliance on professional advice. On merits, following multiple coordinate bench decisions, it held that such VRS compensation is covered under Section 10(10B) and not merely under Section 10(10C).
Accordingly, the Tribunal set aside the CIT(A)’s order, directed the Assessing Officer to allow the exemption upon verification, and grant consequential relief including refund. The appeal was thus allowed in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
