Shraddha Pralhad Arote Vs ITO (ITAT Pune)
Summary: The Pune Bench of the Income Tax Appellate Tribunal, comprising Dr. Manish Borad, Accountant Member, allowed a batch of appeals involving employees of Bharat Sanchar Nigam Limited (BSNL) who had received compensation under the BSNL Voluntary Retirement Scheme, 2019.
The appeals concerned Assessment Years 2020-21 and 2021-22 and arose from intimations issued under section 143(1)(a) of the Income-tax Act, 1961. The common issue was whether compensation received by BSNL employees under the VRS-2019, which formed part of the Government’s revival package for BSNL and MTNL, constituted retrenchment compensation and was consequently exempt under section 10(10B), rather than being restricted to the ₹5 lakh exemption available under section 10(10C).
The assessees had initially claimed exemption under section 10(10C) and paid tax on the balance compensation exceeding ₹5 lakh. In some cases, the claim of full exemption under section 10(10B) was raised for the first time before the CIT(A). Some appeals were also dismissed by the CIT(A) on limitation or on the ground that the fresh claim ought to have been made through a revised return.
The Tribunal referred to the Supreme Court’s decision in Jute Corporation of India Ltd. v. CIT and held that appellate authorities have jurisdiction to entertain new claims or additional grounds where necessary to determine the correct tax liability.
