TaxTMI 
TaxTMI 
2026 (7) TMI 484
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....that the issues raised in these four appeals are squarely covered by the decision of this coordinate Bench in the case Prathibha Jagdish Unawane Vs. ITO - ITA No.1117/PUN/2026 and others order dated 29.04.2026. 4. On the other hand, ld. DR strongly supported the orders of ld. CIT(A) and also submitted that the sum received by the respective employees is not in the nature of retrenchment compensation but is an amount received under the Voluntary Retirement Scheme and the provisions of section 10(10C) are applicable. 5. We have heard the rival contentions and perused the record placed before us. The common issue raised in these four appeals is that whether the sum received by the employees of BSNL under the Voluntary Retirement Scheme, 2019 fall in the category of retrenchment compensation referred in u/s.10(10B) of the Act or an amount received Voluntary Retirement referred in section 10(10C) of the Act. We find that this issue has been dealt by this Tribunal along with the issues of delay not condoned by ld. CIT(A), claims not made in regular return of income in the case of various other employees in the recent decision in the case of Prathibha Jagdish Unawane Vs. ITO (supra)....
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....f the appeals and in some cases ld. CIT(A) has not entertained the new claim made for the first time holding that the same should have been made in the revised return of income. Aggrieved with the finding of ld. CIT(A), the assessee(s) are in appeal before this Tribunal. 5. Ld. Counsel for the assessee at the outset justifying the delay in filing of appeals before ld. CIT(A) submitted that the issue of claiming benefit of exemption u/s.10(10B) of the Act for the amount received as compensation from BSNL for the force retirement has been adjudicated by the Coordinate Benches of Chandigarh as well as Ahmedabad and other Tribunals consistently holding in favour of the assessee(s). He also submitted that in various cases dealt by the Coordinates Benches, the alleged claim of exemption u/s.10(10B) of the Act has been made for the first time and the same has been admitted by the Tribunal and relief has been granted. Reliance placed on the decision of Coordinate Bench, Ahmedabad in the case of Jayesh Kumar Tulsidas Sutaria Vs. ITO (2026) 183 taxmann.com 587 (Ahmedabad-Trib.) 6. So far as the claim that the alleged sum received in the form of Retrenchment Compensation fro....
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....Himmatrao Patil vs. ITO (ITA Nos. 302/PUN/2026), Meghmala Sudhir Pathak vs. ITO (ITA Nos. 290/PUN/2026), and Shraddha Pralhad Arote vs. ITO (ITA Nos. 262/PUN/2026). 4. The core of this dispute rests on whether a tax tribunal can transform a voluntary exit from a reviving entity into an involuntary retrenchment from a dying one. It is submitted that these rulings have not appreciated the primary distinction between a "Going Concern" in revival and an undertaking in liquidation. 5. Section 10(10B), reproduced below, contains Explanation (a), which creates a deeming fiction; compensation paid at the time of "closing down of the undertaking" is deemed to be retrenchment: "[(10B) any compensation received by a workman under the Industrial Disputes Act, 1947 (14 of 1947), or under any other Act or Rules, orders or notifications issued thereunder or under any standing orders or under any award, contract of service or otherwise, [at the time of his retrenchment: 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....
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....... same being compensation under section 10(10B) would be exempted." 7. However, the BSNL facts are different. As per the Cabinet Note dated 29.10.2019, the BSNL scheme was part of a "Revival Package" involving 4G spectrum allotment and debt restructuring.) 11. The Tribunals in Harish Kumar (Chandigarh) and Rajendra Patil (Pune) have erroneously held that the BSNL VRS was "Retrenchment in the garb of VRS" due to financial stress. Section 10(10B) imports the definition of "Retrenchment" from Section 2(oo) of the Industrial Disputes Act, 1947 (IDA). Section 2(oo) of IDA explicitly excludes "voluntary retirement": "[(oo) "retrenchment" means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include- (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or 3[(bb) termination of the service of the workman as a result of the non-renewal of the contract....
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....e VRS, as per the terms laid down by BSNL. It is submitted that the assessee had not been paid regular salary for several months prior to opting for the scheme and was under severe financial and professional uncertainty. In view 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 BS....
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....e appeals of the assessee are allowed." 16. The contention of ld. DR that only a 'workman' as defined under the Act is eligible for benefit u/s.10(10B) of the Act has no force as the Hon'ble High Court of Madras in the case of Hindustan Photo Film Workers Welfare Centre vs. Govt. of India (2018) 400 ITR 299 (Madras) has held that benefit u/s.10(10B) would be applicable to all employees covered by the scheme. 17. In light of the above decisions which are squarely applicable on the facts of instant cases and the consistent view taken by the Coordinate Benches, I am of the considered view that the alleged sum is in the nature of Retrenchment Compensation received by the assessee(s) in appeal, under the forced retirement scheme as per the standing orders dated 29.10.2019 issued by the Union Cabinet for the revival plan of BSNL/MTNL and such compensation falls under the provisions of section 10(10B) of the Act and not u/s.10(10C) of the Act and therefore the alleged sum is in the nature of Capital receipt exempt from tax. In order to get relief as has been directed in this order, assessee(s) are directed to place revised computation of income before the respective Juri....
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....vindra Sahadu patil Order under of section 250 Act 73-89 6 12/12/2025 Umrao Kerba Kore Order under of section 250 Act 90-106 7 22/12/2025 Youraj Raghunathrao Pawar Order under of section 250 Act 107-141 8 22/12/2025 Valmik Vedu Patil Order under of section 250 Act 142-160 9 29/12/2025 Sunil Ramlingappa Gulave Order under of section 250 Act 161-186 10 29/12/2025 Mary Cruz Janet Francis Order under of section 250 Act 187-212 11 31/12/2025 Rajendra Babulal Takle Order under of section 250 Act 213-227 12 06/01/2026 Devendra Vishwasrao Sonawane Order under of section 250 Act 228-259 13 05/03/2026 Niva Baruah Order under of section 250 Act 260-265 12. We have perused the submission of the Ld. DR. Ld. DR has not brought on record any contrary decision of Hon'ble High Court. We also find support from the decision of ITAT Ahmedabad in the case of Vishnu Mohan T Nair v. Income Tax Officer, [ 2018] 61 ITR(T) 796 (Ahmedabad- Trib.), the operative portion of the said order is extracted below: "While on this subject, it is also useful to take note of Hon....