FIS SOLUTIONS (INDIA) GRATUITY TRUST,PUNE V. DCIT CIRCLE 3(1)(1), BENGALURU

ITA 542/PUN/2025

AI Insights

The case involves FIS Solutions (India) Pvt. Ltd. Employees Gratuity Fund Trust, which is an approved Gratuity Trust/Fund of FIS Solutions India Pvt. Ltd. The trust was denied exemption under section 10(25)(iv) of the Income Tax Act, 1961, by the CPC during the processing of the return for AY 2013-14. The appeal to the Ld. Addl./JCIT(A) was dismissed due to non-compliance with procedural requirements, specifically the failure to respond to a deficiency notice. The Tribunal found that the dismissal was without considering the merits of the case and restored the matter for fresh adjudication.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771901 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P MURKUNDE
• Assessee Lawyers: SHARAD A VAZE
• Keywords: Set aside; Opportunity of being heard
• Section: 234B

Judgement Text

" आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.542/PUN/2025 धििाारण वर्ा / Assessment Year : 2013-14 FIS Solutions (India) Gratuity Trust, Westend Centre One Survey No. 169/1 Sector II, Aundh, Pune PAN : AAETS4401K Vs. DCIT, Circle – 3(1)(1) अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Sharad A Vaze Department by : Shri Ramnath P Murkunde Date of hearing : 12-06-2025 Date of Pronouncement : 25-08-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 30.12.2024 of the Ld. Additional/Joint Commissioner of Income Tax (Appeals), Mysore [“Addl./JCIT(A)”] pertaining to Assessment Year (“AY”) 2013-14. 2. The assessee has raised the following grounds of appeal:- “On the facts and circumstances of the case and in law 1. The Addl/JCIT(A) Mysore erred in stating that the appellant has not uploaded the documents such as form no. 35, Grounds of appeal, Statement of fact etc. and therefore erred in dismissing the appeal without considering the merits of the case. The CIT(A) may kindly be directed to decide the appeal on merits as the appellant has uploaded all the documents. 2. The Addl/ JCIT(A) erred in holding that the notices issued on email ID's are not responded. The concerned owners of email account have confirmed and denied receipt of any notice from the Addl /JCIT(A). 3. The appellant being not at fault for documents not visible or accessible by CIT(A) on ITBA portal cannot be denied decision on merits. If at all it is because of technical glitch, the appellant cannot be held responsible and deserves decision on merits on the issues in appeal. Without prejudice Printed from counselvise.com 2 ITA No.542/PUN/2025, AY 2013-14 Denying the exemption u/s 10(25)(iv) of the Income Tax Act. 4. erred in denying the exemption u/s 10(25)(iv) as claimed in the return, which is contrary to the information filed in ITR form. The annex document of the ITR form clearly indicates that the trust being a gratuity trust, is eligible for exemption u/s 10(25)(iv) of the IT Act. Adjustment made without affording any opportunity. 5. erred in making the adjustment under appeal without affording any opportunity of hearing for calling for the explanation and thereby violated the proviso of subsection 143(1)(a). Erred in computing tax on gross revenue. 6. Without prejudice, the Learned AO erred in computing tax on gross revenue of ₹96,07,736. The appellant is an approved gratuity fund trust, and as per Section 10(25)(iv) of the Income Tax Act, all income received on behalf of the approved gratuity fund is exempt from tax. Levy of Interest u/s 234B Rs.7,12,488 and 234C Rs. 1,09, 842 7. Erred in levying interest u/s 234B and 234C The appellant craves to add, alter, delete all, or any of the grounds of appeal on or before hearing.” 3. Briefly stated the facts are that the assessee, FIS Solutions (India) Pvt. Ltd. Employees Gratuity Fund Trust (the “Gratuity Fund”) (previously known as M/s. SCT Software Solutions India Pvt. Ltd.) is a recognized Gratuity Trust/Fund of FIS Solutions India Pvt. Ltd. The Gratuity Fund is approved by the Commissioner of Income Tax, Bangalore on 23.02.2004. The registered office of the company was changed from Bangalore to Pune and accordingly its jurisdiction lies at Pune Commissionerate. For AY 2013-14, the assessee filed its return of income on 27.09.2013 declaring „Nil‟ income. The entire income of the approved Gratuity Fund is exempt u/s 10(25)(iv) of the Income Tax Act, 1961 (the “Act”). The return was processed u/s 143(1) of the Act by the CPC on 14.03.2015 rejecting the exemption claimed in the return. 4. Aggrieved with the intimation order, the assessee filed an appeal before the Ld. Addl./JCIT(A). The Ld. Addl./JCIT(A) dismissed the appeal of the assessee without deciding the grounds on merits due to the failure on the part of the assessee to submit its response to the deficiencies pointed out by the Ld. Addl./JCIT(A) by observing as under : “2. Proceedings: - Deficiency notice has been issued as under citing the shortcoming in the filing of the appeal: S No. Date hearing notice Date of compliance Date of response Mail id to which the notices issued have been delivered as per Income- Printed from counselvise.com 3 ITA No.542/PUN/2025, AY 2013-14 fixed tax portal 1 20/12/2024 26/12/2024 No reply Sandeep. [e-mail] [e-mail] 3. Despite granting sufficient time and opportunity to the appellant to cure these deficiencies, no response has been filed, nor the deficiencies has been cured within the stipulated period. The failure to rectify the deficiencies constitutes a breach of procedural requirements essential for the proper presentation of the appeal. Therefore, this appeal cannot be concluded in its present form. 4. Considering the above facts, the appeal of the appellant for AY 2013-14 stands DISMISSED for want of compliance with the filing requirements.” 5. Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto. 6. The Ld. AR at the outset submitted that the assessee had filed the requisite details/documents, however, the Ld. Addl./ JCIT(A) has not considered the submission of the assessee and dismissed the appeal for want of compliance with the filing requirements without deciding the issues on merits. He also submitted that the non-compliance before the Ld. Addl./JCIT(A) was not intentional. The Ld. Addl./JCIT(A) issued only one deficiency notice via email to two employees of the assessee. The first email id was of one Mr. Sandeep who left the job and the second person Kajal who did not receive the deficiency letter. He further submitted that a very short span of time was afforded by the Ld. Addl./JCIT(A) to submit response to the said notice. The notice was issued on 20.12.2024 which was a Friday followed by 21st and 22nd December, 2024 being Saturday and Sunday. 25th December, 2024 was also a holiday because of Christmas. So practically, 23rd and 24th December, 2024 were the only two days which were available to the assessee to reply. FIS Solutions India Pvt. Ltd. is engaged in software solutions, most of the employees of the company were generally on leave because of their customers having Christmas holidays worldwide. Thus, even if the notice would have been received by the assessee, it was practically impossible to furnish response in two days time. He also laid emphasis on the fact that the return was processed u/s 143(1) of the Act without issuing notice u/s 143(1)(a) of the Act indicating any proposed adjustment CPC intended to make to the returned income. Further, the Ld. Addl./JCIT(A) has not decided the issues on merits of the case. He admitted that the assessee inadvertently used section Printed from counselvise.com 4 ITA No.542/PUN/2025, AY 2013-14 10(23C) in drop-down menu as section 10(25) was not available (in drop-down menu) while filing ITR 7. But this mistake is not fatal to deny the exemption, which is otherwise available to an approved gratuity fund and as such the assessee is entitled to exemption u/s 10(25)(iv) of the Act. Relying on Circular No. 14 dated 11.04.1955, the Ld. AR submitted that the Ld. AO is bound to give necessary relief to which the assessee is entitled to. He submitted that given an opportunity the assessee is in a position to substantiate its case by filing the relevant details/ documentary evidence before the Ld. Addl./JCIT(A) to his satisfaction. He, therefore, requested that in the interest of justice the order of the Ld. Addl./JCIT(A) may be set aside and the matter may be restored to the file of the Ld. Addl./JCIT(A)/JAO for adjudication afresh after affording an opportunity of hearing to the assessee. 7. The Ld. DR had no objection to the above request of the assessee. 8. We have heard the Ld. Representatives of the parties, perused the material available on record and the Paper Book filed by the Ld. Counsel on behalf of the assessee. Perusal of the order of the Ld. Addl./JCIT(A) reveals that he dismissed the appeal of the assessee because of non-filing of response to the notice issued by him requiring the assessee to cure the deficiencies contained therein. The Ld. Addl./JCIT(A) has not decided the appeal on merits of the case. We find that only one notice was issued by the Ld. Addl./JCIT(A) which was not received by the assessee for the reason mentioned in the preceding paragraph. The assessee was also not granted sufficient time to respond to the notice. Before us, the Ld. Counsel for the assessee has submitted that given an opportunity the assessee is in a position to substantiate its case by filing the requisite details/ documents before the Ld. Addl./JCIT(A)/JAO and therefore he has requested for remand of the matter to his file for fresh adjudication. 9. Considering the totality of facts and in the circumstances of the case enumerated above, without going into the merits of the appeal, we deem it proper, in the interest of justice, to set aside the order of the Ld. Addl./JCIT(A) and restore the matter back to his file for adjudication afresh and pass speaking order on merits as per fact and law after allowing reasonable opportunity of being heard to the assessee. The assessee is also hereby directed to provide the requisite support in terms of submitting the relevant documents/ evidence as may be required/called upon on the appointed date and make his submissions without seeking any adjournment under any Printed from counselvise.com 5 ITA No.542/PUN/2025, AY 2013-14 pretext, failing which the Ld. Addl./JCIT(A) shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 25th August, 2025. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 25th August, 2025. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com "