BSNL VRS compensation treated as exempt retrenchment compensation, with delay condoned on sufficient cause and merits reached.

Compensation received by BSNL employees under the BSNL Voluntary Retirement Scheme, 2019 was treated as retrenchment compensation in the nature of a capital receipt and held exempt from tax under section 10(10B) of the Income-tax Act, 1961, following the Tribunal's consistent view in earlier coordinate bench rulings. The Tribunal also found sufficient cause to condone the delay before the first appellate authority, emphasising that substantial justice should prevail over technical delay. Relief was therefore granted on merits, with consequential verification of revised computation and refund, if any, by the Assessing Officer.

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Issues: Whether the amount received by BSNL employees under the BSNL Voluntary Retirement Scheme, 2019 is taxable only as voluntary retirement compensation or is to be treated as retrenchment compensation as a capital receipt exempt under section 10(10B) of the Income-tax Act, 1961, and whether the delay in approaching the first appellate authority should be condoned.

Analysis: The appeals arose from intimation orders under section 143(1) of the Income-tax Act, 1961 and orders passed under section 250 of the Income-tax Act, 1961. The Tribunal noted that the assessees had received compensation under the BSNL VRS, 2019 pursuant to the revival package for BSNL and that similar claims had already been accepted in earlier coordinate bench decisions. The Tribunal also found that the delay before the first appellate authority was supported by sufficient cause and that substantial justice should prevail over technical delay. On merits, the Tribunal followed the consistent view that the compensation paid under the scheme was in the nature of retrenchment compensation, not merely voluntary retirement compensation, and that it retained the character of a capital receipt exempt from tax under section 10(10B) of the Income-tax Act, 1961.

Conclusion: The delay was condoned, and the compensation received under the BSNL Voluntary Retirement Scheme, 2019 was held to be exempt under section 10(10B) of the Income-tax Act, 1961. The assessee was granted relief with consequential verification of revised computation and refund, if any, by the jurisdictional Assessing Officer.

Final Conclusion: The appeals succeeded, with the compensation treated as exempt retrenchment compensation and the appellate relief extended in favour of the assessees.

Ratio Decidendi: Compensation paid under the BSNL Voluntary Retirement Scheme, 2019 was held to partake the character of retrenchment compensation as a capital receipt and was exempt under section 10(10B) of the Income-tax Act, 1961; procedural delay could be condoned where sufficient cause was shown and substantial justice required adjudication on merits.

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