TaxTMI 
TaxTMI 
2026 (10) TMI 51
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....or A.Y. 2020-21 are only reproduced as under: Ground 1: Denial of Exemption under Section 10(10B) The learned Assessing Officer/CPC erred in law and on facts in treating the ex-gratia compensation received by the appellant under BSNL VRS-2019 as taxable income and in not granting full exemption under Section 10(10B) of the Income Tax Act, 1961. The appellant received a total VRS ex gratia amount of Rs. 26,89,798/-, out of which Rs. 8,41,915/- pertains to A.Y. 2020-21 and Rs. 18,47,883/- pertains to A.Y. 2021-22, which is in the nature of retrenchment compensation paid under a Central Government approved scheme and is fully exempt as per law. The action of the Assessing Officer/CPC is contrary to the statutory provisions and settled legal position. 1. Hindustan Photo Film Workers' Welfare Centre (CITU) vs. Government of India (W.P. Nos. 18566, 18788, 18608-18610 & 18789 of 2015, decided on 17.03.2017. The Hon'ble Madras High Court), while upholding the VRS scheme, held that the compensation paid to employees constitutes special protection compensation in the nature of retrenchment compensation and is exempt under Section 10(10B) o....
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....pellate authorities, even if not claimed in the return. Ground 3: Erroneous Rejection of Condonation of Delay The learned Commissioner of Income Tax (Appeals) erred in law and on facts in rejecting the condonation applications and dismissing the appeals in limine on the ground of delay of 1563 days for A.Y. 2020- 21 and 1546 days for A.Y. 2021-22, without adjudicating the issues on merits. The learned CIT(A) failed to appreciate that, as per the settled doctrine, the cause of action accrues when the right to sue first arises, and in the present case, the appellant's right to claim full exemption effectively arose only upon subsequent judicial clarification regarding the taxability of ex gratia received under BSNL VRS-2019. The learned CIT(A) further failed to adopt a liberal interpretation of "sufficient cause" as envisaged under Sections 249(3) and 253(5) of the Income Tax Act, 1961. It is well settled that where legal rights crystallize upon such later clarification, the delay deserves to be condoned in the interest of substantial justice. The rejection of condonation is therefore arbitrary, contrary to settled principles of law, and has resulted in denial o....
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....while filing their returns of income for the respective assessment years, offered the ex-gratia compensation to tax after claiming exemption of Rs. 5,00,000/- under section 10(10C) of the Income-tax Act, 1961 ("the Act"). Consequently, the amount received in excess of Rs. 5,00,000/- was offered to tax. The returns of income of the assessee were processed by the Department under section 143(1) of the Act accepting the returned income without raising any demand. 4. Subsequently, the assessees came to know that the ex-gratia compensation received under BSNL VRS-2019 was fully exempt under section 10(10B) of the Act. Accordingly, they preferred appeals before the Learned Addl/JCIT(A) against the intimations issued under section 143(1) of the Act. However, there was a substantial delay ranging from about 1163 days to 1,583 days in filing these appeals before the Learned Addl/JCIT(A). However, the Learned Addl/JCIT(A) declined to condone the delay and dismissed the appeals in limine. 5. Aggrieved by the respective orders of the Learned Addl/JCIT(A), all the assessees are in appeal before this Tribunal. With regards to the delay before the Learned Addl/JCIT(A), the Learned Authorize....
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....ed under section 10(10B) of the Act. Accordingly, it was prayed that appropriate directions may be issued to the Ld. AO to verify the eligibility of each assessee before granting the exemption. 8. We have heard the rival submissions and perused the material available on record including the case laws relied upon. Insofar as the appeals in which the Learned Addl/JCIT(A) declined to condone the delay are concerned, we find that an identical issue has already been considered by this Tribunal in a batch of 14 appeals in the case of Nizamuddin Gooty & others Vs. Addl/JCIT (supra), wherein at para nos. 10 and 11 of the said order, the Tribunal has held as under: 10. We have heard both parties, perused the material available on record and had gone through the orders of the authorities below. We have also carefully considered a plethora of judicial precedents referred to by learned counsel for the assessees on this issue. Insofar as dismissal of the appeals filed by the assessees by the learned Addl/ JCIT for the delay in filing the appeals, we find that, the very same issue has been considered by the Coordinate Bench of ITAT, Bengaluru in the case of Basappa Balarama and Murth....
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....ein at para nos.6 to 9 of the order the Hon'ble High Court has held as under: 6. When we look into the averments made in respect of identical claims being allowed by the Benches of Income Tax Appellate Tribunal at Chandigarh, Ahmedabad, Pune, Mumbai, Indore and Bangalore, in identically placed BSNL retirees, this Court is of the considered view that when similar fact was brought to the notice of the respondent- Department, the respondents ought to have appreciated the bona fides of the petitioner and the application filed by the petitioner under Section 119(2)(b) of the Act seeking condonation of delay to file revised ITRs for the Assessment Years 2020-21 and 2021-22, ought to have been considered by the respondent-Department with a more pragmatic and liberal approach, by appreciating the genuine hardship that the petitioner had been put to or would be put to, in case if the application seeking for condo-nation is not allowed. 7. A plain reading of the impugned order does not disclose whether respondent No. 1 had considered and appreciated the orders passed by Benches of Income Tax Appellate Tribunal at Chandigarh, Ahmedabad, Pune, Mumbai, Indore and Bangalore....
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.... controversy has already been adjudicated by this Tribunal in the aforesaid batch of 14 appeals in the case of Nizamuddin Gooty & others Vs. Addl/JCIT (supra), wherein at para nos. 12 to 15 of the said order, the Tribunal has held as under: 12. Having said so, let us come back to the issue on hand. Admittedly, the assessees in the present bunch of appeals are employees of BSNL and opted for the Voluntary Retirement Scheme - 2019 and received compensation in two financial years relevant to the A. Ys. 2020-21 and 2021-22. It is also an admitted fact that the assessees in the present cases had filed their returns of income for A.Y. 2020-21 and offered the compensation received from BSNL to tax after claiming exemption of Rs. 5,00,000/- u/s 10(10C) of the Act and the same has been accepted by the A.O. in the order passed u/s 143(1) of the Act. However, the assessees in the present cases have made a fresh claim of exemption towards 100% compensation received from BSNL under Voluntary Retirement Scheme - 2019, u/s 10(10B) of the Act, for the first time before the learned Addl/ JCIT and the claims made by the assessees were rejected by the learned Addl/JCIT on technical grounds o....
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....tary retirement scheme simpliciter. 12. We further find that identical issue had come up for consideration before the Chandigarh Bench of the Tribunal in the case of Harish Kumar vs. ITO, wherein the Tribunal held that the ex-gratia compensation received under BSNL VRS- 2019 is eligible for exemption u/ s. 10(10B) of the Act. Similar view has also been consistently taken by various appellate authorities across the country in the cases relied upon by the assessee. The Revenue has not brought on record any contrary judicial precedent to take a different view in the matter. 13. Considering the facts and circumstances of the case and respectfully following the judicial precedents cited supra, we hold that the ex-gratia compensation received by the assessee under the BSNL VRS-2019 scheme is eligible for exemption u/s.10(10B) of the Act. Consequently, the additions made by taxing the ex-gratia compensation are directed to be deleted. The AO is also directed to grant consequential relief, in accordance with law, in respect of exemption claimed u/s.10(10AA) of the Act, if otherwise found eligible." 15. In this view of the matter and considering the facts and circ....