Prathibha Jagadish Unawane Vs ITO (ITAT Pune)
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) heard a batch of appeals relating to Assessment Years 2020-21 and 2021-22 arising from separate orders passed by the Additional/Joint Commissioner of Income Tax (Appeals) under Section 250 of the Income Tax Act, 1961. Since the appeals involved a common issue, they were disposed of through a consolidated order.
The common issue was whether the compensation received by the assessees from Bharat Sanchar Nigam Limited (BSNL) under the BSNL Voluntary Retirement Scheme (VRS), 2019, pursuant to the Government-approved revival plan for BSNL and MTNL, constituted retrenchment compensation and a capital receipt exempt from tax under Section 10(10B) of the Income Tax Act. The assessees were employees of BSNL, which functions under the administrative control of the Department of Telecommunications, Government of India. Under the revival package approved by the Union Cabinet on 23 October 2019 and communicated through an Office Memorandum dated 29 October 2019, employees aged 50 years and above were offered voluntary retirement with payment of ex gratia compensation. Initially, the assessees had offered the compensation to tax after claiming exemption of ₹5 lakh under Section 10(10C) and had paid tax on the balance amount. Before the Commissioner (Appeals), they raised for the first time the claim that the entire compensation was exempt under Section 10(10B) as a capital receipt. In some cases, the Commissioner (Appeals) dismissed the appeals on the ground of delay, while in others the new claim was declined on the ground that it ought to have been made through a revised return of income.
