The Punjab State Co-operative Bank Employees Pension Fund Trust, Chandigarh V. DCIT, Chandigarh

ITA 183/CHANDI/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 5360 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 27-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANISH KUMAR GUPTA
• Section: 10; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 183/CHD/2017 / ASSESSMENT YEAR : 2012-13 THE PUNJAB CO-OPERATIVE BANK EMPLOYEES PENSION FUND TRUST, SCO 175-187, SECTOR 34-A, CHANDIGARH-160022 THE DCIT (EXEMPTIONS) CHANDIGARH ./PAN NO: AABTT3225D APPELLANT /RESPONDENT /ASSESSEE BY : SH. MANISH KUMAR GUPTA, CA ! / REVENUE BY : SH. RAM MOHAN, CIT DR ' # $ /DATE OF HEARING : 10.09.2018 %&'( $ /DATE OF PRONOUNCEMENT : 05.10. 2018 (*/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 2.11.2016 OF THE COMMISSIONER OF INCOME TAX (A)-2, CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(A)] AG ITATING THE CONFIRMATION OF THE ADDITION MADE BY THE ASSESSING OFFICER DENYING THE BENEFIT OF APPROVAL OF EXEMPTION FROM INCOME TAX O F THE FUNDS ESTABLISHED BY THE ASSESSEE AS PER THE PROVISIONS OF SECTION 10 (23AAA) OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT'). ITA NO. 183/CHD/2017- THE PUNJAB STATE COOPERATIVE BANK EMPLOYEES PENSIO N FUND TRUST, CHANDIGARH 2 2. THE BRIEF FACTS RELATING TO THE ISSUE UNDER CONS IDERATION ARE THAT THE ASSESSEE ESTABLISHED A FUND FOR THE BENEFIT OF PENS ION TO ITS EMPLOYEES. THE FUND WAS APPROVED U/S 10(23AAA) OF THE ACT BY THE P RINCIPAL COMMISSIONER OF INCOME TAX (PCIT) VIDE ORDER DATED 4.1.2013 FOR THE PURPOSE OF EXEMPTION U/S 11 OF THE I.T. ACT FROM IN COME TAX. HOWEVER, THE ASSESSING OFFICER DENIED THE EXEMPTION TO THE A SSESSEE OBSERVING THAT ASSESSEE / FUND WAS NOT DULY NOTIFIED IN THE OFFI CIAL GAZETTE BY THE CBDT FOR THE SAID PURPOSE AND FURTHER THAT THE ASSESSEE HAD MADE CERTAIN AMENDMENTS IN ITS PENSION SCHEME, WHEREBY, IT DECID ED TO TRANSFER THE CORPUS FUNDS TO LIC. THE AO OBSERVED THAT THE SAI D AMENDMENT IN THE PENSION SCHEME WAS NOT IN ACCORDANCE WITH THE OBJE CTS EARLIER MENTIONED IN THE TRUST DEED /PENSION SCHEME. FURTHER, THAT I N FORM NO.10 SUBMITTED, THE ASSESSEE HAD NOT MENTIONED THE PURPOSE OF ACCUM ULATION OF THE FUNDS. HE, THEREFORE, DENIED THE EXEMPTION TO THE ASSESSEE . 3. THE ASSESSEE UNSUCCESSFULLY CONTESTED THE MATTER BEFORE THE CIT(A). 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE PROVISIONS OF SECTION 10(23AAA) OF THE ACT. SO FAR AS THE FIRST OBJECTION OF THE ASSESSING OFFICER THAT THE ASSESSEE / FUNDS HAD NOT BEEN NOTIFIED IN THE OFFICIAL GAZETTE OF INDIA, IN OUR VIEW, THE SAI D OBJECTION OR CONTENTION OF THE REVENUE IS NOT TENABLE. THE RELEVANT PROVISI ONS OF SECTION 10 (23AAA) OF THE ACT ARE REPRODUCED AS UNDER:- 23. INCOMES NOT INCLUDED IN TOTAL INCOME (23AAA) ANY INCOME RECEIVED BY ANY PERSON ON BEHALF OF A FUND ESTABLISHED, FOR SUCH PURPOSES AS MAY BE NOTIFIED B Y THE BOARD IN THE OFFICIAL GAZETTE, FOR THE WELFARE OF EMPLOYEES OR THEIR DEPENDANTS AND OF WHICH FUND SUCH EMPLOYEES ARE MEM BERS IF SUCH FUND FULFILS THE FOLLOWING CONDITIONS, NAMELY : ITA NO. 183/CHD/2017- THE PUNJAB STATE COOPERATIVE BANK EMPLOYEES PENSIO N FUND TRUST, CHANDIGARH 3 (A) THE FUND (I) APPLIES ITS INCOME OR ACCUMULATES IT FOR APPL ICATION, WHOLLY AND EXCLUSIVELY TO THE OBJECTS FOR WHICH IT IS ESTABLISHED; AND (II) INVESTS ITS FUNDS AND CONTRIBUTIONS AND OTHER SUMS RECEIVED BY IT IN THE FORMS OR MODES SPECIFIED IN S UB- SECTION (5) OF SECTION 11; (B) THE FUND IS APPROVED BY THE PRINCIPAL COMMISSI ONER OR COMMISSIONER IN ACCORDANCE WITH THE RULES MADE IN T HIS BEHALF: PROVIDED THAT ANY SUCH APPROVAL SHALL AT ANY ONE TIME HAVE EFFECT FOR SUCH ASSESSMENT YEAR OR YEARS NOT EXCEEDING THR EE ASSESSMENT YEARS AS MAY BE SPECIFIED IN THE ORDER OF APPROVAL; 5. A PERUSAL OF THE ABOVE PROVISIONS REVEAL THAT IT IS NOT THE INDIVIDUAL ASSESSEE / APPLICANT, RATHER, THE PURPOSE FOR WHICH FUND CAN BE ESTABLISHED, HAS TO BE NOTIFIED BY THE CENTRAL GOVERNMENT. THE L D. COUNSEL FOR THE ASSESSEE HAS BROUGHT OUR ATTENTION TO THE PAGE 15 O F THE PAPER BOOK WHICH IS COPY OF THE NOTIFICATION NO. S.O. 672(E) DATED 2 7.7.1995, WHEREBY, CENTRAL GOVERNMENT HAS NOTIFIED THE PURPOSES FOR WH ICH FUND CAN BE ESTABLISHED AS PER THE PROVISIONS OF SECTION 10(23A AA) OF THE ACT. THE ABOVE PROVISIONS OF SECTION 10(23AAA) OF THE ACT RE AD WITH THE NOTIFICATION ISSUED BY THE CENTRAL GOVERNMENT (SUPR A) REVEALS BEYOND DOUBT THAT IT IS NOT THE ASSESSEE BUT THE PURPOSES WHICH ARE REQUIRED TO BE NOTIFIED AND WHICH, OTHERWISE, HAVE BEEN DULY NOTIFIED VIDE AFORESAID NOTIFICATION BEARING S.O. 672(E)(F NO. 142/16/95-TPL) AND 33/20 11 DATED 27.7.1995. SO FAR AS THE OBSERVATION THAT THE ASSESSEE HAD CHA NGED ITS OBJECTS, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE OBJ ECTS OF THE ASSESSEE HAVE NOT BEEN CHANGED AND ONLY IT WAS DECIDED THAT THE C ORPUS FUNDS BE TRANSFERRED TO THE LIC FOR THE PURPOSE OF IMPLEMENT ATION OF THE SCHEME. HOWEVER, THE CONTRIBUTORS / EMPLOYEES DID NOT AGRE E WITH THE SAME AND THE SAID CHANGE HAS NEVER BEEN IMPLEMENTED. THE LD. COU NSEL HAS FURTHER ITA NO. 183/CHD/2017- THE PUNJAB STATE COOPERATIVE BANK EMPLOYEES PENSIO N FUND TRUST, CHANDIGARH 4 SUBMITTED THAT EVEN THE DECISION TO TRANSFER OF THE CORPUS FUND TO THE LIC WAS AS PER THE STATUTORY PROVISIONS AND NO ILLEGALI TY WAS COMMITTED BY THE ASSESSEE EVEN OTHERWISE, IN THIS RESPECT. HOWEVER, AS ON TODAY, THE FUNDS HAVE NOT BEEN TRANSFERRED TO LIC. THE LD. COUNSEL H AS FURTHER INVITED OUR ATTENTION TO THE APPROVAL ISSUED TO THE FUND BY THE PCIT FOR SUBSEQUENT ASSESSMENT YEARS 2014-15 AND 2015-16, WHICH SHOWED THAT THE FUND CONTINUED TO SUBSIST FOR THE SUBSEQUENT YEARS AND THE PCIT AFTER EXAMINING THE RELEVANT PROVISIONS HAS FURTHER GRANT ED THE APPROVAL TO THE ASSESSEE. SO FAR AS THE CONTENTION THAT THE ASSESS EE WAS SUPPOSED TO DECLARE THE PURPOSE OF ACCUMULATION OF FUNDS IN FOR M NO.10 IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT , IN FACT, THE ASSESSEE WAS NOT REQUIRED TO FILE THE FORM NO.10 ITSELF. THA T EVEN OTHERWISE THE PURPOSE OF ACCUMULATION WAS SPECIFICALLY MENTIONED IN THE APPROVAL LETTER ISSUED BY THE PCIT THAT THE FUND OBVIOUSLY, WAS FOR PENSION SCHEME OF THE EMPLOYEES. 6. IN VIEW OF THIS, WE DO NOT FIND ANY JUSTIFICATIO N FOR THE LOWER AUTHORITIES IN MAKING THE IMPUGNED ADDITIONS FOR TH E YEAR UNDER CONSIDERATION. THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO GRANT THE EXEMPTIO N TO THE ASSESSEE IN RESPECT OF THE FUND ESTABLISHED UNDER THE PENSION SCHEME AS PER THE RELEVANT PROVISIONS OF SECITON10(23AAA) OF THE I.T . ACT. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.10.2018 SD/- SD/- $ % & '# (ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER (SANJAY GARG ) / JUDICIAL MEMBER DATED : 05.10. 2018 RKK ITA NO. 183/CHD/2017- THE PUNJAB STATE COOPERATIVE BANK EMPLOYEES PENSIO N FUND TRUST, CHANDIGARH 5 &* +, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' . / CIT 4. ' . ( )/ THE CIT(A) 5. ,/0 1 , $ 1 , 23405 / DR, ITAT, CHANDIGARH 6. 04 6# / GUARD FILE &* ' / BY ORDER, 7 ! / ASSISTANT REGISTRAR