Raju Goral Vs ITO (ITAT Pune)
Pune ITAT Reiterates BSNL VRS-2019 Compensation Is Exempt Under Section 10(10B) as Retrenchment Compensation; Rejects Taxability Under Section 10(10C)
The Pune ITAT, deciding a batch of 59 appeals involving former BSNL employees, held that the compensation received under the BSNL Voluntary Retirement Scheme, 2019 constitutes retrenchment compensation and is therefore exempt under section 10(10B) of the Income-tax Act, and not merely eligible for the limited exemption under section 10(10C). The Tribunal followed its earlier decision in Prathibha Jagdish Unawane and the co-ordinate bench rulings in Harish Kumar (Chandigarh ITAT) and Jayeshkumar Tulsidas Sutaria (Ahmedabad ITAT), observing that the BSNL VRS formed part of the Government’s revival package and, in substance, amounted to forced retrenchment, notwithstanding its nomenclature as a voluntary retirement scheme. It also rejected the Revenue’s objection that such claims could not be entertained because they were not made in the original return, holding that substantive justice prevails over procedural technicalities and that legitimate exemption claims can be considered in appellate proceedings. Accordingly, the Tribunal reversed the orders of the CIT(A), directed the assessees to file revised computations before their respective Assessing Officers claiming exemption under section 10(10B), and directed the Revenue to recompute the tax liability and grant consequential refunds, if due, after due verification.
