Ravindra Kumar Saxena Vs ITO (ITAT Pune)
Pune ITAT Reiterates: BSNL VRS Compensation Is Retrenchment Compensation Exempt under Section 10(10B)
The Pune ITAT held that the amount received by employees under the BSNL Voluntary Retirement Scheme (VRS), 2019 is in the nature of retrenchment compensation and constitutes a capital receipt exempt under section 10(10B), and not a voluntary retirement payment under section 10(10C). The Tribunal followed its earlier decision in Prathibha Jagdish Unawane and other consistent decisions of the Pune, Ahmedabad and Chandigarh Benches, observing that the BSNL VRS formed part of the Government’s revival package and was, in substance, a retrenchment measure.
The Tribunal rejected the Revenue’s contention that the payment was merely a VRS benefit taxable subject to the limited exemption under section 10(10C). It also noted that no contrary High Court judgment had been brought to its notice and found support from the Madras High Court’s decision in Hindustan Photo Film Workers Welfare Centre, which recognised that such compensation should be treated as retrenchment compensation.
Accordingly, the Tribunal reversed the orders of the CIT(A), directed the assessees to file revised computations before the Assessing Officers claiming exemption under section 10(10B), and instructed the Revenue to recompute the tax liability and grant the consequential refund, if due, after verification. All four appeals were allowed
FULL TEXT OF THE ORDER OF ITAT PUNE
