TaxTMI 
TaxTMI 
2026 (9) TMI 754
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....Rajesh Padmakarrao Chopde, Shailesh Gourishankar Namdeo, Anil Shamraoji Rakhade, Rajesh Kumar Versus ITO, Ward-3(3), Nagpur, Malinee Bhaskar Sawdadkar Versus ITO, Ward-3, Akola, Shantanu Baburao Shete, Kishor Jagyabhan Patel Versus ITO, Ward-1, Yavatmal, Ashok Maduji Zade Versus ITO, Ward-1(1), Chandrapur, Suresh Maheshwar Gokhale Versus ITO, Ward-1, Bhandara And Ramesh Kisanrao Pote Versus ITO, Ward-5, Amravati SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER For the Assessee(s) : Shri Tanzil Padvekar, Advocate (virtual) For the Revenue : Shri Surjit Kumar Saha, Sr. DR ORDER PER KHETTRA MOHAN ROY, AM: The captioned appeals filed by the different assessees are directed against the separate orders of Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centres, (for short, "CIT(A)") passed under section 250 of the Income Tax Act, 1961 (for short, "Act"), for the Assessment Years (AY) 2020-21 & 2021-22. 2. Since common issues have been raised in the above appeals, we proceed to adjudicate these appeals by way of this consolidated order for the sake of convenience. 3. The common issue involved in this bat....
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....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 from BSNL under the forced retirement is a Capital receipt not chargeable to tax and exemption available u/s.10(10B) of the Act has been decided in favour of the assessees. Ld. Counsel for the assessee placed reliance on the following decisions : 1. Harish Kumar Vs. ITO (2025) 175 taxmann.com 379 (Chandigarh-Trib.) 2. Dayal Singh Vs. ITO - ITA 519/CHD/2024 3. Suresh Pal Chauhan vs. ITO (2023) 154 taxmann.com 529 (Chandigarh-Trib.) 4. Hindustan Photo Film Workers Welfare Centre Vs. Govt. of India (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 (Civ....
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....ve employees under the Central Government Voluntary Retirement Scheme announced by the BSNL has been held to be exempt u/s.10(10B) of the Act. For the sake of reference, finding of Ld.CIT(A) in the other case of another assessee namely Ghanashyam Vitthal Dhond, PAN : ACLPD6107G for A.Y. 202122 order dated 12.12.2025 u/s.250 of the Act reads as under : "5. Findings and Decision: The appellant was retrenched from BSNL in accordance with scheme announced by Govt. of India for revival of BSNL through budgetary support given by Govt. of India. The appellant claims to have been given ex-gratia compensation of Rs. 19,45,760/-. The Appellant has filed his return of income u/s.139 of the Income-tax Act, 1961 on 18.12.2021 (due date of filing ROI 31.12.2021). The Appellant submits that the return was filed under the guidance of a professional accountant, claiming benefit under Section 10 of the Income Tax Act, 1961. 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. 1....
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....Others v. I.T.O.) wherein Tribunal held that such retrenchment compensation is a capital receipt in the hands of the assessee and not liable to tax. The A.O. is directed to verify Form 16 issued by the employer to check the correct amount of ex-gratia given during the year and grant exemption u/s. 10(10B) on the entire ex-gratia compensation amount. The appellant claims that the exgratia amount for A.Y. 2021-22 is Rs. 19,45,760/-. The A.O. may verify the exact amount of exgratia received from FORM 16 of the appellant and exempt the same accordingly u/s. 10(10B) of the I. T. Act. Accordingly, all the grounds of appeal stand Allowed subject to verification. 6. In view of the above, the appeal of the appellant is allowed." 11. From the above finding of Ld.CIT(A) in the case of assessee Ghanashyam Vitthal Dhond [who is not assessee in the appeals before us] it has been held that the amount received from BSNL 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....
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.... his voluntary retirement or termination of service or voluntary separation, no exemption under this clause shall be allowed to him in relation to such, or any other, assessment year;]." 13. Before this Tribunal assessees are claiming that the alleged sum received from BSNL under the Voluntary Retirement Scheme is in the nature of Retrenchment compensation received under standing order or an Award which in this case is the revival plan of BSNL approved vide Office Memorandum dated 29.10.2019 and therefore exempt u/s.10(10B) of the Act. For the sake of convenience, provisions of section 10(10B) of the Act are reproduced below : "(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 under any award, contract of service or otherwise, at the orders or notifications issued thereunder or under any standing 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, 1947 (14 of 1947); or (ii) such amount, not b....
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....or BSNL Voluntary Retirement Scheme and received total emoluments at Rs. 30.17 lakhs and claimed exemption u/s.10(10B) of the Act. However, the Ld. AO disallowed Rs. 25.17 lakhs and allowed the benefit of only Rs. 5.00 lakh as per section 10(10C) of the Act. Thereafter, the assessee did not succeed before the ld.CIT(A) and approached the Coordinate Bench, Chandigarh and the Tribunal allowed the claim of exemption u/s.10(10B) of the Act observing as follows : "4. I have heard the rival contentions and gone through record. The Ld. counsel for the assessee has demonstrated before me that though, in the nomenclature, the scheme has been mentioned as VRS (Voluntary Retirement Scheme), however, in fact the same retrenchment scheme. The Assessee was an employee of the Bharat Sanchar Nigam Limited (BSNL). The BSNL had incurred losses during the three consecutive years. The salaries of the 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 r....
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....sed wherein several appeals of employees of HTML TD were taken up. The Hon'ble ITAT opined in Para 48 that the matter had been examined by the Hon'ble Madras High Court and thereafter has attained finality in view of dismissal of the SLP y Hon'ble Supreme Court and also added that "such matters need not be litigated any further" 8. Respectfully following the decision of the Jurisdictional Hon'ble ITAT, the A.O is directed to allow compensation received by the appellant at the time of VRS as exempt income u/s 10(10B) of the Act. Accordingly, the only one ground raised by the appellant in this appeal is allowed." 6. However, in respect of the 2nd installment of compensation/ exemption on VRS the claim of the assessee has been disallowed, which in my view is not justified. When the claim of the Assessee relating to the first installment has been accepted by the Ld. CIT(A). 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 ....
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.... stands allowed." 15. Further, we find that the Coordinate Bench, Ahmedabad in the case of Jayeshkumar Tulsidas Sutaria Vs. ITO (supra) following the decision of Coordinate Bench, Chandigarh in the case of Harish Kumar vs. ITO Ward- 5(5), Chandigarh -ITA No. 42/CHD/2025 order dated 30.05.2025 has decided the issue in favour of the assessee by observing as under : "3. The assessee was employed with Bharat Sanchar Nigam Limited (BSNL), a Government of India enterprise. BSNL notified the Voluntary Retirement Scheme (VRS) 2019 on 04.11.2019, which was duly approved and implemented by the employer. The assessee opted for the scheme and accordingly received compensation under the 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 VRS2019 scheme. The compensation amount received under the scheme was offered to tax in the r....
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.... of awareness of the legal provisions at the time of filing the return of income, the assessee inadvertently offered the compensation received under BSNL VRS-2019 to tax. Subsequently, based on the decision of the Hon'ble ITAT Chandigarh Bench in Harish Kumar vs. ITO Ward 5(5), Chandigarh (ITA No. 42/CHD/2025 dated 30.05.2025), wherein compensation under the same BSNL VRS-2019 scheme was held to be exempt under section 10(10B), the assessee now seeks exemption of such compensation. We find that the assessee filed the claim before the Ld. CIT(A) and since the income of the assessee is not taxable, the assessee is eligible for the refund of the TDS. 8. In the result, both the 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 c....