Retrenchment compensation under BSNL's voluntary retirement scheme was treated as exempt capital receipt by the ITAT Pune.

Amount received by BSNL employees under the Voluntary Retirement Scheme, 2019 was treated as retrenchment compensation in substance and therefore as an exempt capital receipt. The ITAT Pune followed its earlier coordinate-bench ruling on identical facts and rejected the first appellate authority's contrary view, holding that the scheme payment fell within the exempt category. The assessee's claim succeeded.

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Issues: Whether the amount received by BSNL employees under the BSNL Voluntary Retirement Scheme, 2019 is to be treated as retrenchment compensation and a capital receipt exempt from tax.

Analysis: The Tribunal followed its earlier coordinate-bench decision on identical facts and held that the compensation paid under the BSNL Voluntary Retirement Scheme, 2019 was in substance retrenchment compensation. It accepted the view that the receipt fell within the exempt category and that the earlier findings of the first appellate authority could not stand in view of the binding and consistent tribunal precedent.

Conclusion: The compensation was held to be exempt from tax, and the assessee's claim succeeded.

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