ACIT, Uttrakhand V. M/s. Udham Singh Nagar Dist. Co-operative Bank Ltd., Rudrapur

ITA 3107/DEL/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2634 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 08-04-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PASS ROAD RUDRAPAUR PAN AAATUQ
• Assessee Lawyers: K SAMPATH SHRI TARUN SEEM
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.3107/DEL/2010 ASSESSMENT YEAR : 2007-08 ACIT, HALDWANI, UTTARAKHAND. VS. UDHAM SINGH NAGAR DISTT. CO- OPERATIVE BANK LTD., KASHIPUR BY PASS ROAD, RUDRAPAUR. PAN : AAATU2006Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH, ADVOCATE REVENUE BY : SHRI TARUN SEEM, SR.DR ORDER PER A.D. JAIN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT FOR ASSESSMENT YEAR 2007-08 AGAINST THE ORDER DATED 15.03.2010 PASSED BY T HE CIT (A)-II, DEHRADUN, CONTENDING THAT THE LD. CIT (A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION OF CO NTRIBUTION MADE BY THE ASSESSEE TOWARDS PROVIDENT FUND OF ITS EMPLOYEES, WHICH WAS NOT RECOGNIZED WITHIN THE MEANING OF SECTION 2 (38) OF THE IT ACT. 2. THE ASSESSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN THE BANKING BUSINESS, HAVING ITS HEAD OFFICE AT KASHIPUR BYE-PASS R OAD, RUDRAPUR. THE ASSESSING OFFICER FOUND THE ASSESSEE TO HAVE DEBITED A N AMOUNT OF ` 19,93,051/- TOWARDS PAYMENT OF PROVIDENT FUND OF IT S EMPLOYEES. THE PROVIDENT FUND TRUST WAS NOT FOUND TO BE RECOGNIZ ED. IT WAS, THEREFORE, THAT THE CONTRIBUTION MADE BY THE BANK T OWARDS THE ITA NO.3107/DEL/2010 2 PROVIDENT FUND OF ITS EMPLOYEES WAS DISALLOWED U/S 40A(9 ) OF THE IT ACT. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT (A) ALLOWED THE ASSESSEES APPEAL. AGGRIEVED, THE DEPARTMENT IS IN APPEA L BEFORE US. 3. CHALLENGING THE IMPUGNED ORDER, THE LD. DR HAS CO NTENDED THAT THE LD. CIT (A) HAS ERRED IN ALLOWING THE ASSESSEES CLA IM OF DEDUCTION ON CONTRIBUTION MADE BY IT TOWARDS AN UNRECOGNIZED P ROVIDENT FUND. 4. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER, CONTENDING TH AT THE LD. CIT (A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE, SINCE THE ASSESSING OFFICER HAD UTTERLY FAILED TO APPRECIATE THAT THOUG H THE PROVIDENT FUND OF THE ASSESSEE WAS PENDING GRANT OF REGISTRATION, THE SAI D TRUST HAVING BEEN ESTABLISHED UNDER A SCHEME FRAMED UNDER TH E EPF ACT, 1952, REGISTRATION HAD ALSO NOT BEEN DENIED TO IT; T HAT MOREOVER, THE ASSESSING OFFICER HAD NEVER CONFRONTED THE ASSESSEE IN THIS REGARD; THAT SINCE THE TRUST HAD NOT BEEN DENIED REGISTRATION, IT DID QUALIFY FOR REGISTRATION IN ACCORDANCE WITH THE PROVISIONS OF SECT ION 2 (38) OF THE ACT; AND THAT THE EVIDENCE REGARDING THE TRUST BEING IN ACCORDANCE WITH THE SCHEME FRAMED UNDER THE EPF ACT, 1952, WAS F ILED BEFORE THE LD. CIT (A), WHICH WAS DULY TAKEN INTO CONSIDERATION WHILE GRANTING THE CLAIM OF THE ASSESSEE. 5. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MAT ERIAL ON RECORD. THE LD. CIT (A) HAS ALLOWED THE CLAIM OF TH E ASSESSEE, HOLDING AS FOLLOWS:- THE CRITERIA OF RECOGNIZED PROVIDENT FUNDS IS, THE PR OVIDENT FUND SHOULD EITHER BE RECOGNIZED BY THE CHIEF COMMISSIONER OR COMMISSIONER IN ACCORDANCE WITH RULES CONTAINED IN PA RT A OF THE FOURTH SCHEDULE OR THE PROVIDENT FUND SHOULD BE ESTA BLISHED UNDER A SCHEME FRAMED UNDER THE EMPLOYEES PROVIDENT FUND ACT, 1952. SINCE THE EMPLOYEES PROVIDENT FUND OF THE APPELLANT IS ESTABLISH AS SUCH, IT IS ENTITLED TO DEDUCTION ON CO NTRIBUTION ITA NO.3107/DEL/2010 3 MADE TOWARDS EMPLOYEES PROVIDENT FUND IRRESPECTIVE OF WHETHER THE FUND IS APPROVED BY THE CHIEF COMMISSIONER OR COMMISSIONER. THE ASSESSING OFFICER SHALL, THEREFOR E, ALLOW THE CLAIMED DEDUCTION. 6. IN THE PRESENT CASE, UNDENIABLY, THE PROVIDENT FUN D TRUST OF THE ASSESSEE WAS ESTABLISHED UNDER A SCHEME FRAMED UNDER THE EMPLOYEES PROVIDENT FUND ACT, 1952. THAT BEING SO, THE LD. CIT (A) HAS CORRECTLY HELD THAT THE PROVIDENT FUND OF THE ASSE SSEE BANK WAS AN ESTABLISHED TRUST, ENTITLED FOR DEDUCTION ON CONTRIBU TION MADE TOWARDS EMPLOYEES PROVIDENT FUND, IRRESPECTIVE OF GRANT OF A PPROVAL OR OTHERWISE BY THE CONCERNED AUTHORITY. 7. SECTION 2 (38) OF THE ACT READS AS FOLLOWS:- (38) RECOGNIZED PROVIDENT FUND MEANS A PROVIDENT FUND WHICH HAS BEEN AND CONTINUES TO BE RECOGNIZED BY THE C HIEF COMMISSIONER OR COMMISSIONER IN ACCORDANCE WITH THE R ULES CONTAINED IN PART A OF THE FOURTH SCHEDULE, AND INCLUDE S A PROVIDENT FUND ESTABLISHED UNDER A SCHEME FRAMED UNDE R THE EMPLOYEES PROVIDENT FUND ACT, 1952 (19 OF 1952) 8. THUS, THE SECTION IS VERY CLEAR IN THAT IT DEFINES A RECOGNIZED PROVIDENT FUND TO INCLUDE A PROVIDENT FUND ESTABLISH ED UNDER A SCHEME FRAMED UNDER THE EMPLOYEES PROVIDENT FUND AC T, 1952. NOW, OBVIOUSLY, THE ASSESSING OFFICER ERRED IN DISALLOWING THE CLAIM OF THE ASSESSEE, INASMUCH AS IN THE ASSESSMENT ORDER, IT WAS NOT EVEN NOTED THAT THE TRUST OF THE ASSESSEE BANK WAS A TRUST ESTABLISHED UNDER A SCHEME FRAMED UNDER THE EMPLOYEES PROVIDENT FUND AC T, 1952. 9. ONCE SECTION 2 (38) OF THE ACT, AS ABOVE, ITSELF SP ECIFICALLY PROVIDES A PROVIDENT FUND ESTABLISHED UNDER A SCHEME F RAMED UNDER THE EMPLOYEES PROVIDENT FUND ACT, 1952 TO BE A RECO GNIZED PROVIDENT FUND, THERE IS NO REASON FOR THE CLAIM OF THE ASSESSEE TO BE DENIED AND ITA NO.3107/DEL/2010 4 WE FIND THE LD. CIT (A) TO HAVE CORRECTLY RECTIFIED THE ERROR COMMITTED BY THE ASSESSING OFFICER. 10. AS SUCH, FINDING NO MERIT THEREIN, THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT IS REJECTED. 11. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 08.04.20 13. SD/- SD/- [T.S. KAPOOR] [A.D. JAIN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 08.04.2013. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES