Vaas Industries (P) Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1566/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64545 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-11-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 16-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI SR
• Assessee Lawyers: M VISWANATHAN
• Keywords: Competent authority

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NOS. 1565 & 1566/MDS/2011 (ASSESSMENT YEARS : 2002-03 & 2004-05) M/S VAAS INDUSTRIES (P) LTD., NO.73, INDUSTRIAL ESTATE, PERUNGUDI, CHENNAI - 600 096. PAN : AAACV8728K (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(4), CHENNAI - 600 034 . (RESPONDENT) APPELLANT BY : SHRI M. VISWANATHAN, CA RESPONDENT BY : SHRI T.N. BETGIRI , SR. AR DATE OF HEARING : 20.11.2012 DATE OF PRONOUNCEMENT : 20.11.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THE COMMON GRIEVANCE RAISED BY THE ASSESSEE IN BO TH THESE APPEALS IS REGARDING DISALLOWANCE OF CLAIM FOR CONT RIBUTIONS MADE TO GRATUITY AND SUPERANNUATION. 2. FACTS APROPOS ARE THAT ASSESSEE HAD MADE CONTRIB UTIONS TO EMPLOYEE GRATUITY FUND AND SUPERANNUATION FUND IN T HE RELEVANT I.T.A. NOS. 1565 & 1566/MDS/11 2 PREVIOUS YEARS. ASSESSING OFFICER REQUIRED THE ASS ESSEE TO PRODUCE EVIDENCE FOR APPROVAL OF SUCH FUNDS. ASSESSEE REPL IED THAT IT HAD MADE AN APPLICATION FOR APPROVAL AND WAS AWAITING S UCH APPROVAL. HOWEVER, THE ASSESSING OFFICER WAS OF THE OPINION T HAT FOR CLAIMING DEDUCTION UNDER SECTIONS 36(1)(V) AND 36(1)(IV) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), GRATUITY FUND AND SUPERA NNUATION FUND WERE TO HAVE THE APPROVAL OF COMPETENT AUTHORITY. SINCE THESE FUNDS DID NOT HAVE SUCH APPROVAL, THE CLAIM FOR CONTRIBUTIONS TO SUCH FUNDS WERE DISALLOWED. 3. IN ITS APPEALS BEFORE CIT(APPEALS), ARGUMENT OF THE ASSESSEE WAS THAT ITS APPLICATION FOR APPROVAL FOR GRATUITY AND SUPERANNUATION SCHEMES, MADE AS EARLY AS 22 ND MARCH, 1993 BEFORE THE COMMISSIONER OF INCOME TAX WAS STILL PENDING DISPOS AL. AS PER THE ASSESSEE, IN ANTICIPATION OF SUCH APPROVAL, IT HAD CLAIMED THE REMITTANCE TO SUCH GRATUITY AND SUPERANNUATION FUND S AS A REVENUE OUTGO. CIT(APPEALS) REQUIRED A REMAND REPORT FROM A.O. IT SEEMS THAT THE A.O. STUCK TO THE SAME STAND THAT HE HAD T AKEN IN THE ASSESSMENT ORDER. CIT(APPEALS) CONFIRMED THE DISAL LOWANCE. ACCORDING TO HIM, UNLESS AND UNTIL CONTRIBUTIONS WE RE TO GRATUITY AND SUPERANNUATION WHICH WERE APPROVED, NO DEDUCTION UN DER SECTIONS I.T.A. NOS. 1565 & 1566/MDS/11 3 36(1)(IV) AND 36(1)(V) COULD BE ALLOWED. THUS, HE CONFIRMED THE DISALLOWANCE. 4. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMITTED THAT ASSESSEE HAD MADE ANOT HER APPLICATION ON 15.12.2006 WITH COMMISSIONER OF INCOME TAX, IN A DDITION TO THE EARLIER ONE DATED 22 ND MARCH, 1993, FOR APPROVAL OF THE GRATUITY AND SUPERANNUATION SCHEMES. SUCH APPLICATIONS WERE STIL L TO BE DISPOSED OF. ACCORDING TO HIM, AUTHORITIES BELOW HAD DECLIN ED TO ACCEPT THE CLAIM OF THE ASSESSEE DESPITE ASSESSEES APPLICATIO N IN THIS REGARD BEING AVAILABLE WITH THEM. 5. PER CONTRA, LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF CIT(APPEALS). 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE CANNOT BE ANY DISPUTE THAT FOR ALLOWANCE OF A MOUNTS PAID TO GRATUITY AND SUPERANNUATION FUNDS, SUCH GRATUITY AN D SUPERANNUATION SCHEMES REQUIRE APPROVAL OF COMPETENT AUTHORITY. S ECTIONS 36(1)(IV) AND 36(1)(V) ARE CLEAR IN THIS REGARD. HOWEVER, IN THE CASE BEFORE US, THERE IS NO DISPUTE THAT ASSESSEE INDEED HAD MADE A N APPLICATION ON 22 ND MARCH, 1993 AND LATER ON 15.12.2006 FOR SUCH APPRO VAL. IT IS ALSO NOT DISPUTED THAT THE SAID APPLICATIONS WERE S TILL TO BE DISPOSED I.T.A. NOS. 1565 & 1566/MDS/11 4 OF. WE ARE, THEREFORE, OF THE VIEW THAT THE MATTER REQUIRES A RE-LOOK BY THE CIT(APPEALS). IF THE ASSESSEE IS ABLE TO PR ODUCE BEFORE CIT(APPEALS) THE APPROVAL RECEIVED BY IT FOR GRATUI TY AND SUPERANNUATION FUNDS, OR SHOW THAT SUCH APPROVAL WA S NOT FORTHCOMING DESPITE ITS BEST EFFORTS, THEN ITS CLAI M HAS TO BE CONSIDERED. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF CIT(APPEALS) AND REMIT THE MATTER TO HIM F OR CONSIDERATION AFRESH. ASSESSEE SHALL BE GIVEN AN OPPORTUNITY FOR ADDUCING EVIDENCE IN THIS REGARD AND CIT(APPEALS) SHALL DISP OSE AND DEAL WITH THE ISSUE IN ACCORDANCE WITH LAW. 7. IN THE RESULT, APPEALS OF THE ASSESSEE, FOR BOTH THE YEARS, ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE COURT ON TUESDAY, T HE 20 TH OF NOVEMBER, 2012, AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 20 TH NOVEMBER, 2012. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-III, CHENNAI/ CIT, CHENNAI-I, CHENNAI/D.R./GUARD FILE