TaxTMI 
TaxTMI 
2026 (3) TMI 1411
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..../s. 143(1)(a) of the Act. 2. Since common issues have been raised in the above appeals I proceed to adjudicate these appeals by way of this consolidated order for the sake of convenience. 3. The common issue raised in these bunch of appeals is that whether the amount received from Bharat Sanchar Nigam Limited (BSNL) on account of the forced retirement through the BNSL Voluntary Retirement Scheme, 2019 is in the nature of Retrenchment and is a Capital receipt not liable to be taxed as per the provisions of section 10(10B) of the Act. 4. Brief facts relating to all the assessee(s) in the instant appeals are that they are employed with BSNL which is under administrative control of Department of Telecommunications, Govt. of India. In order to revive BSNL, the Union Cabinet in its meeting dated 23.10.2019 approved the revival plan of BSNL and Mahanagar Telephone Nigam Limited, Mumbai (MTNL) vide Office Memorandum dated 29.10.2019 issued by Department of Telecommunications. As part of the revival package the Government decided to reduce the work force through BSNL Voluntary Retirement Scheme, 2019 to the employees of aged 50 years and above and on such retirement Ex-gratia compe....
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....ndia (2017) 79 taxmann.com 298 (Madras) 5. CIT (TDS) Vs. Hindustan Photo Film Workers Welfare Centre (2021 129 taxmann.com 356 (Madras) 6. Union of India Vs. M/s. Hindustan Photo Film Workers Welfare Centre and others _ Special Leave Petition (Civil) Diary No.37247/2017 7. Shree Rajeshwar Sharma Vs. ITO - ITA No.870/CHD/2018 8. CIT Vs. Mahalakshmi Textile Mills Ltd.(1967) 66 ITR 710 (SC) 9. PCIT Vs. Karnataka State Cooperative Federation Ltd. (2021) 128 taxmann.com 1 (Karnataka) 10. CIT Vs. Pruthvi Brokers & Shareholders (2012) 23 taxmann.com 23 (Bombay) 7. On the other hand, ld. DR supported the orders of ld.CIT(A) and submitted that firstly the assess(s) have not made this claim in the regular returns of income and themselves paid due taxes and such claim ought to have been made through revised return. He also submitted that the sum received from BSNL is on account of Voluntary Retirement Scheme and for such amount received under the VRS, 2019, the assessee(s) are only eligible for the exemption to the extent of Rs. 5.00 lakh as provided u/s. 10(10C) of the Act. 8. I have heard the rival contentions and perused the recor....
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....961. However, during a meeting organized by the SNPWAMH ("the Union") on 1st July, 2025, it was informed that several retired employees, including Appellant, had been given incorrect advice. The appellant now claims that he is eligible for deduction of Rs. 19,45,760/- u/s. 10(10B) and the same be allowed. The appellant states that he was a Central Government Employee and as per decision of the Government, the management of BSNL announced a scheme titled as BSNL retirement scheme 2019 offering the employee a package for acceptance of early retirement. The appellant has relied on several cases in which it has been held that BSNL is an entity covered under the Industrial Disputes Act. As seen from the grounds of appeal the appellant has relied on the decision of various Benches including Chandigarh Bench in the case of Harish Kumar (ITA No.42/CHD/2025), Rajeshwar Sharma (ITA No. 870/Chd/2018 & Others) (Chandigarh Tribunal), Manda Madhukar Kadhane, Ranchi holding such payments to be retrenchment compensation exempt u/s. 10(10B), similar relief has also been granted in identical BSNL cases by the Ld. C.I.T.(A) Ranchi and C.I.T. (A) Udaipur. The moot question is that wh....
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.... under the forced Voluntary Retirement Scheme 2019 is in the nature of Retrenchment Compensation and not a normal Voluntary Retirement compensation and that employees of BSNL falls under Industrial Disputes Act and therefore exemption u/s. 10(10B) of the Act is allowable. 12. In the instant appeals, assessee(s) have claimed exemption u/s. 10(10C) of the Act where the exemption for compensation received under the Voluntary Retirement Scheme cannot exceed Rs. 5.00 lakh and the said provision reads as under : "10(10C) Any sum received (or receivable) by an employee of (i) a public sector company; or (ii) any other company; or (iii) an authority established under a Central, State or Provincial Act: or (iv) a local [authority; or] (v) a co-operative society; or (vi) a University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a University under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or (vii) an Indian Institute of Technology within the meaning of clause (g) of section 3% of the Institutes of Technology Act, 1961 (59 of 1961....
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....hment: Provided that the amount exempt under this clause shall not exceed -- (i) an amount calculated in accordance with the provisions of clause (b) of section 25F of the Industrial Disputes Act, 1947 (14 of 1947); or (ii) such amount, not being less than fifty thousand rupees, as the Central Government may, by notification in the Official Gazette, specify in this behalf,] whichever is less: Provided further that the preceding proviso shall not apply in respect of any compensation received by a workman in accordance with any may, having regard to need for extending special protection to the workmen in the under. taking to which such scheme applies and other relevant circum-stances, approve in this behalf.] Explanation. For the purposes of this clause- (a) compensation received by a workman at the time of the closing down of the undertaking in which he is employed shall be deemed to be compensation received at the time of his retrenchment; (b) compensation received by a workman, at the time of the transfer (whether by agreement or by operation of law) of the ownership or management of the undertaking in which h....
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.... employees were not paid. The Assessee and other employees were over the age of 50 years and were not conversant with the new technology adopted by the BSNL. The BSNL, therefore, launched Voluntary Retirement Scheme to shed the extra employees. The Ld. counsel in this respect has referred to the revival scheme of the Department of Telecommunications dated 29.12.2019, whereby, the purposes of the scheme was revival of BSNL and MTNL by way of reducing employees cost. Inter-alia, The compensation/exgratia on VRS was to be paid in two installments of 50% each during the financial years 1920-21 and 2020-21. 5. In this case, the Assessee received first installment of compensation/exgratia on VRS during the financial year 2019-20 upon which the claim exemption u/s 10(10B) of the Act to the Assessee has been allowed by the Ld. CIT(A)in the appellate order in relation to the assessment year 2020-21. The relevant part of the order of Ld. CIT(A) is reproduced as under "The appellant was employee of Department of Telecom Services. The Government of India in its Cabinet meeting dated 23.10.2019 approved the proposals of DOT for revival of BSNL and MTNL vide its Cabinet Note da....
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....). There was no question to reject the claim of the Assessee in relation to second installment of compensation received by the Assessee. Moreover, Ld. counsel for the Assessee had duly demonstrated that the Assessee had not been paid salary for the last so many months and there was no option to the assessee than to accept the VRS scheme which, in fact, was retrenchment scheme in the garb of the VRS scheme. The amount received by the Assessee was, in fact, the compensation on account of retrenchment. 7. Faced with some what similar facts and circumstances, the co-ordinate Bench of the Tribunal in the cse of Sh. Sarabjit Singh v. Income Tax Officer ITGA No. 764/Chd/2018, vide order dated 06.04.2019 has held as under :- "We have considered the rival submissions and have also gone through the record. The issue is squarely covered by the decision of the Co-ordinate Chandigarh Bench of the Tribunal the Case of other employees in similar facts and circumstances vide order dated 11.3.2019 passed in ITA No.870/Chd/2018 & Others titled as "Sh.Rajeshwar Sharma & Others v. ITO'. This Tribunal observed as under: Though in strict terms, it may not be said that the ....
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....ew of these circumstances, the assessee opted for the scheme as a measure of financial security. The compensation received by the assessee was in the nature of compensation under the BSNL VRS-2019 scheme. The compensation amount received under the scheme was offered to tax in the return of income due to lack of awareness regarding the exemption available under section 10(10B) of the Income-tax Act, 1961. The employer had also deducted tax at source on the said amount. No exemption was claimed in the original or revised return of income. The CPC, Bengaluru issued an intimation under section 143(1) for the said year without granting any exemption, and no rectification or appeal was initiated at that time. It was only upon learning about the recent judgment of the Hon'ble ITAT Chandigarh Bench in the case of Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025, dated 30.05.2025) that the assessee became aware that the compensation received under the BSNL VRS-2019 scheme is eligible for exemption under section 10(10B), subject to compliance with Rule 2BA. 4. Aggrieved by the orders of the Assessing Officer, the assessee carried the matter in appeal before the Ld.CIT....