Seema Arora vs. Addl/JCIT (A)

Parties Involved

Facts Summary

The assessee, Seema Arora, is an employee of Bharat Sanchar Nigam Limited (BSNL). She opted for retirement under the Voluntary Retirement Scheme (VRS), 2019 and received an amount of Rs.13,72,791 during the year under consideration. The assessee filed her return of income on 11.08.2020 declaring a total income of Rs.19,58,400, wherein exemption of Rs.5,00,000 was claimed on account of compensation received from the retirement scheme. Subsequently, the assessee became aware that the amount received on voluntary retirement was eligible for exemption under Section 10(10B) of the Income Tax Act, 1961. The assessee filed an appeal seeking to claim the eligible exemption on the said amount before the Commissioner of Income Tax (Appeals). The Commissioner dismissed the appeal on the ground of delay, without appreciating that the delay was occasioned due to bona fide reasons, including reliance on incorrect professional advice and the subsequent crystallization of the legal position through judicial precedents.…

Legal Issues

• 1. Error in law in upholding taxability of ex-gratia compensation
• 2. Mischaracterisation of compensation under Section 10(10C) instead of applicability of the Second Proviso to Section 10(10B)

Judgment Outcome

Decided in favour of Assessee.

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