M/s. JK Ansell Limited, Aurangabad V. ACIT, Circle-1, Aurangabad

ITA 159/PUN/2013

• Counselvise Citation: 15924514 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 17-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Assessee Lawyers: SACHIN ROMANI
• Keywords: Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.159/PN/2013 (ASSESSMENT YEAR : 2004-05) M/S JK ANSELL LIMITED, G-35/G-36, MIDC, WALUJ, AURANGABAD. PAN : AAACJ7709F . APPELLANT VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, AURANGABAD. . RESPONDENT ASSESSEE BY : MR. SACHIN ROMANI DEPARTMENT BY : MR. P. L. PATHADE DATE OF HEARING : 25-02-2014 DATE OF PRONOUNCEMENT : 25-02-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED A GAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), AURANGABA D DATED 24.05.2011 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 18.1 2.2006 PASSED BY THE ASSESSING OFFICER U/S 143(3)(II) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2004-05. 2. IN THIS APPEAL, THE SOLITARY ISSUE RELATES TO DI SALLOWANCE OF PREMIUM PAID BY THE ASSESSEE TOWARDS GROUP GRATUITY FUND OF RS.8 ,51,571/-. THE SAID DISALLOWANCE HAS BEEN MADE BY THE INCOME-TAX AUTHOR ITIES ON THE GROUND THAT THE GRATUITY FUND WAS NOT APPROVED BY THE CONCERNED COMMISSIONER OF INCOME TAX AND HENCE THE CONTRIBUTION MADE BY THE A SSESSEE INVITED DISALLOWANCE IN TERMS OF SECTION 40A(7) OF THE ACT. 3. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AT THE TIME OF PROCEEDINGS BEFORE THE LOWER AU THORITIES, THE NECESSARY ITA NO.159/PN/2013 A.Y. 2004-05 APPROVAL FROM THE COMMISSIONER OF INCOME TAX, AURAN GABAD WAS NOT FORTHCOMING, ALTHOUGH THE ASSESSEE HAD MADE THE APP LICATION SEEKING APPROVAL WITH THE COMMISSIONER. SUBSEQUENTLY, ON 0 4.01.2012 THE COMMISSIONER OF INCOME TAX, AURANGABAD ACCORDED THE APPROVAL TO THE GROUP GRATUITY FUND ESTABLISHED BY THE ASSESSEE AND SUCH APPROVAL IS EFFECTIVE FROM 01.10.2003, WHICH COVERS THE PERIOD UNDER CONSIDERATION. THE LEARNED COUNSEL ALSO POINTED OUT THAT THE APPEAL WA S DISPOSED-OFF BY THE CIT(A) VIDE ORDER DATED 24.05.2011 WHEN THE REQUEST ED APPROVAL WAS NOT OBTAINED. THE ASSESSEE COMPANY WAS UNDER A BONAFID E BELIEF THAT FILING OF APPEAL AGAINST THE ORDER OF THE CIT(A) WOULD BE A F UTILE EXERCISE IN THE ABSENCE OF THE APPROVAL FROM THE COMMISSIONER OF IN COME TAX, AURANGABAD. ON ACCOUNT OF THE SAID BONAFIDE BELIEF AND ALSO FOR THE FACT THAT WHEN THE APPROVAL WAS RECEIVED THE CONCERNED EMPLOYEE LOOKIN G AFTER TAXATION MATTERS HAD LEFT THE ORGANIZATION, THE ASSESSEE COULD NOT F ILE THE CAPTIONED APPEAL BEFORE THE TRIBUNAL WITHIN THE TIME SPECIFIED AND I T WAS ONLY WHEN A PENALTY NOTICE WAS RECEIVED ON 24.12.2012 THAT THE MATTER C AME TO LIGHT OF NOT HAVING FILED THE APPEAL BEFORE THE TRIBUNAL WITHIN TIME. IT WAS THEREFORE PRAYED THAT THE APPEAL FILED BEFORE THE TRIBUNAL BE ADMITTED AN D THE DELAY IN FILING OF THE APPEAL BE CONDONED. IN SUPPORT, THE LEARNED COUNSE L FOR THE ASSESSEE HAS FURNISHED AN AFFIDAVIT DATED 24.02.2014 OF THE DIRE CTOR OF THE ASSESSEE COMPANY AVERRING THE ENTIRE CIRCUMSTANCES LEADING T O THE DELAY IN FILING OF THE APPEAL BEFORE THE TRIBUNAL. 4. THE AVERMENTS MADE IN THE AFFIDAVIT HAVE NOT BEE N CONTROVERTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE AND THE FACTUAL MATRIX CANVASSED BY THE ASSESSEE OF THE GRATUITY FUND BEING ACCORDED APPROV AL BY THE COMMISSIONER OF INCOME TAX, AURANGABAD ON 04.01.2012 HAS ALSO NO T BEEN CONTROVERTED. 5. CONSIDERING THAT THE DELAY IN FILING OF THE APPE AL IS UNINTENTIONAL AND ON BONAFIDE CONSIDERATION WE HEREBY CONDONE THE DELAY OF 595 DAYS IN FILING THE ITA NO.159/PN/2013 A.Y. 2004-05 PRESENT APPEAL BEFORE THE TRIBUNAL. FURTHERMORE, I N VIEW OF THE APPROVAL HAVING BEEN GRANTED BY THE COMMISSIONER OF INCOME T AX, AURANGABAD TO THE GROUP GRATUITY FUND, THE IMPUGNED CONTRIBUTION MADE BY THE ASSESSEE IS ELIGIBLE FOR DEDUCTION HAVING REGARD TO SECTION 40A (7) OF THE ACT. IN THIS VIEW OF THE MATTER, WE SET-ASIDE THE ORDER OF THE CIT(A) AN D DIRECT THE ASSESSING OFFICER TO ALLOW THE DEDUCTION OF RS.8,51,571/- REP RESENTING PREMIUM PAID TOWARDS GROUP GRATUITY FUND. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ABOVE DECISION WAS ANNOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING O N 25 TH FEBRUARY, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 25 TH FEBRUARY, 2014 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), AURANGABAD; 4) THE CIT, AURANGABAD; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE