BALMER LAWRIE & CO. LTD. STAFF PROVIDENT FUND,KOLKATA V. ITO, WARD - 34(1), , KOLKATA

ITA 2464/KOL/2024

AI Insights

The case involves Balmer Lawrie & Co. Ltd. Staff Provident Fund, a trust registered with the Chief Commissioner of Income Tax, Kolkata, which appealed against the order of the National Faceless Appeal Centre, Delhi. The dispute centered on the incorrect addition of \\u20b910 lacs to the trust's income, which was initially exempt from tax. The Income Tax Officer (CPC), Bangalore, had disallowed this amount by invoking Section 115BBDA of the Income-tax Act, 1961, due to the trust's misreporting of dividend income under the wrong section. The Tribunal found that the trust's income was fully exempt and corrected the reporting error, thus allowing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126283 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MADHUMITA DAS
• Assessee Lawyers: AKKAL DUDHEWALA
• Keywords: Set aside; Principal; National Faceless Appeal; Commissioner; Disallowing; Commissioner of Income Tax; Exempt; Income from dividend; Affirmed
• Section: 143(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM ITA No.2464/KOL/2024 (Assessment Year:2018-19) Balmer Lawrie & Co. Ltd. Staff Provident Fund Bammer Lawrie House, 21, N.S. Road, BBD Bag, Kolkata, West Bengal, 700001 Vs. ITO, Ward - 34(1), Aaykar Bhawan, 110, Shantipally, EM Bypass, Kolkata, West Bengal, 700107 (Appellant) (Respondent) PAN No. AAATB8655N Assessee by : Shri AkkalDudhewala, AR Revenue by : Shri Madhumita Das, DR Date of hearing: 16.04.2025 Date of pronouncement : 21.04.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 09.11.2022 for the AY 2018-19. 02. The only issue raised by the assessee is against the confirmation of addition of ₹10 lacs by the ld. CIT (A) as made by the ld. AO (CPC) Bangalore by disallowing ₹ 10 lacs out of the dividend received of ₹21,83,402/- by invoking provisions of Section 115BBDA of Income-tax Act, 1961 (the Act) . 03. The facts in brief are that the assessee is a Staff provident Fund trust and is duly registered with the Chief Commissioner of Income Tax, Kolkata vide order dated M. No. Itotech/BLS/PF/2007-08/85 dated 31st January, 2008. Therefore, the income of the assessee is fully exempt from tax. The assessee filed the return of income, however, while filing the return of income, the income from dividend was wrongly reported u/s 10(35) of the Act. The ld. AO (CPC) while processing the return disallowed the dividend to the tune of ₹10 lacs which was reported u/s 10(35) instead of 10(25) of the Page | 2 ITA No.2464/KOL/2024 Balmer Lawrie & Co. Ltd; A.Y. 2018-19 Act. the ld. AO (CPC) while processing the return disallowed the dividend to the tune of ₹10 lacs which was reported u/s 10(35) by invoking provisions of section 115BBDA and levied the tax accordingly in the order passed u/s 143(1) of the Act. 04. In the appellate proceeding, the ld. CIT (A) affirmed the said order by totally mis-understanding and mis-construing the facts by recording wrong finding in the appellate order that there was a failure on the part of the assessee to pay the employees contribution to PF and ESI within the prescribed time under the respective Acts. 05. After hearing the rival contentions and perusing the materials available on record, I find that the assessee is a Staff provident fund trust, which is duly registered with Chief Commissioner of Income Tax, Kolkata-1 and copy of the same was extracted below:- Page | 3 ITA No.2464/KOL/2024 Balmer Lawrie & Co. Ltd; A.Y. 2018-19 06. Accordingly, the income of the above trust is totally exempt from income tax. Nonetheless, there is a requirement to file the return of income. I note that while filing the return filed for A.Y. 2018-19, the dividend income of the assessee which was also exempt from tax was wrongly reported u/s 10(35) of the Act in stead of Section 10(25) of the Act and the ld. AO disallowed the same by invoking the provisions of Section 15BBDA of the Act, which was affirmed by ld. CIT (A) upon wrong understanding of the issue to be relating to non-payment by the assessee of employees contribution of PF and ESI within the prescribed time limit. In our opinion this is a factual mistake on the part of the assessee while filing the return of income which needs to be corrected and therefore the disallowance made by the ld. AO is incorrect and against the provisions of the Act as assessee has been granted the registration by the Chief Commissioner of Income Tax, Kolkata-1, as is apparent from the order passed by the Principal Chief Commissioner of Income Tax, dated 31.01.2008. Accordingly, I set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. 07. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 21.04.2025. Sd/- (RAJESH KUMAR) (ACCOUNTANT MEMBER) Kolkata, Dated: 21.04.2025 Sudip Sarkar, Sr.PS Page | 4 ITA No.2464/KOL/2024 Balmer Lawrie & Co. Ltd; A.Y. 2018-19 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "