RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., Jaipur V. ACIT, Jaipur

ITA 352/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2126 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 04-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Depreciation; Tax effect
• Section: 143(3); 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 352/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. M/S RAJASTHAN CO - OPERATIVE DAIRY FEDERATION LTD., SARAS SANKUL, JLN MARG, MALVIYA NAGAR, JAIPUR. CUKE VS. THE ACIT, CIRLE-6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAAAR 0278 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C.PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02.08.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 10/08/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS)-2, JAIPUR, DATED 17.03.2017 PERTAINING TO ASSESSMENT YEAR 2012-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APP EAL :- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED ON FACTS AN IN LAW IN CONFIRMING THE DISALLOWANCE OF CONTRIBUTI ON MADE TO LIC GROUP GRATUITY SCHEME OF RS. 1,66,96,379/- U/S 36(1 )(VA) & 40A(7). 2. THE ASSESSEE CRAVES RIGHT TO ADD, ALTER OR AMEN D ANY OF THE GROUNDS OF APPEAL. 3. THE APPROPRIATE COST BE AWARDED TO BE ASSESSEE. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143(3) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VID E ORDER DATED 29/03/2016. WHILE 2 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. FRAMING THE ASSESSMENT THE ASSESSING OFFICER DISALL OWED THE CLAIM RELATED TO PF CONTRIBUTION AND CONTRIBUTION TO LIC GROUP GRATUITY SCHEME AND ALSO MADE ADDITION ON DISALLOWANCE OF PRIOR PERIOD EXPENSES TO RS. 2,9 9,213/- AND DISALLOWED THE WRONGLY CLAIMED DEPRECIATION OF RS. 11,23,123/-. A GAINST THIS ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CO NSIDERING THE SUBMISSIONS, PARTLY ALLOWED THE APPEAL. THEREBY CONFIRMED THE ADDITION MADE ON ACCOUNT OF LIC GROUP GRATUITY SCHEME DELETED THE DISALLOWANCE MADE ON AC COUNT OF DELAY IN DEPOSIT OF PF CONTRIBUTION OF EMPLOYEES. 3. FURTHER, AGGRIEVED BY THIS ORDER, THE PRESENT AP PEAL HAS BEEN FILED. 4. GROUND NO. 1 IS AGAINST CONFIRMING THE DISALLOWANCE OF CONTRIBU TION MADE TO LIC GROUP GRATUITY SCHEME OF RS. 1,66,96,379/-. 4.1 LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLOWED THE CLAIM OF THE ASSESS EE. HE SUBMITTED THAT IT IS THE FIRST TIME, WHEN THE CLAIM HAS BEEN DISALLOWED IN EARLIER YEARS, SUCH CLAIM WAS NOT DISALLOWED. HE SUBMITTED THAT THE APPLICATION FOR APPROVAL OF GRATUITY HAD BEEN FILED 14.08.1992, NO COMMUNICATION HAD BEEN RECEIVED. UND ER THESE FACTS, THE ASSESSEE AGAIN ON 04/08/2015 FILED AN APPLICATION FOR APPROV AL MENTIONING THE REFERENCE OF EARLIER APPLICATION FILED IN 1992. REMINDER LETTER WAS ALSO SENT ON 11/04/2016 AND 10/05/2016. 4.2 LD. COUNSEL SUBMITTED THAT THE FACTS ARE IDENTI CAL AS WERE IN THE CASE OF M/S MAN STRUCTURE PVT. LTD. VS. ACIT WHEREIN THE COORDI NATE-BENCH OF THIS TRIBUNAL IN ITA NO. 63 TO 65/JP/2016 DECIDED THE ISSUED IN FAVO UR OF THE ASSESSEE. 3 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. HE FURTHER PLACED RELIANCE ON THE JUDGMENT OF THE H ONBLE HIGH COURT IN THE CASE OF ACIT VS. RAJASTHAN STATE SEEDS CORPORATION LTD. 386 ITR 267. 4.3 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATIV ES SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT CASE LAWS AS R ELIED BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE ON THE FACTS OF THE PRE SENT CASE. HE OPPOSED THE SUBMISSIONS OF LD. COUNSEL FOR THE ASSESSEE. 4.4 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. LD. COUNSEL FOR THE ASSESSEE AS MADE A WRI TTEN SUBMISSIONS. THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE ARE REPRODUCED AS UNDER:- SUBMISSION:- 1. IT IS SUBMITTED THAT THERE IS NO DISPUTE AS TO THE FACT THAT THE ASSESSEE FILED AN APPLICATION FOR APPROVAL OF RCDF EMPLOYEES LIC GRO UP GRATUITY SCHEME TRUST U/R 4 OF PART C OF THE FOURTH SCHEDULE OF IT ACT, 1961 ON 14-08-1992. IN RESPONSE TO SAME, CORRESPONDENCE FROM THE CIT, JAIPUR DATED 23.12.199 2 (PB 10) WAS RECEIVED THAT DECISION WILL BE COMMUNICATED IN DUE COURSE OF TIME . THEREAFTER, AO VIDE LETTER DT. 06.01.1993 (PB 11) REQUIRED THE ASSESSEE TO FURNISH THE INFORMATION A ND FIXED THE CASE FOR HEARING ON 11.01.1993. HOWEVER, TILL 2015 NO CO MMUNICATION WAS RECEIVED. THEREFORE, THE ASSESSEE AGAIN ON 04.08.2015 (PB 12) FILED AN APPLICATION FOR APPROVAL MENTIONING THE REFERENCE OF EARLIER APPLICATION FIL ED IN 1992. REMINDER LETTER WAS SENT ON 11.04.2016 (PB 13) AND 10.05.2016 (PB 14) . THEREAFTER, PCIT, JAIPUR VIDE ORDER DT. 27.05.2016 (PB 15) GRANTED THE APPROVAL TO THE EMPLOYEES GROUP GRATUI TY ASSURANCE SCHEME U/R 2 OF PART C OF FOURTH SCHEDULE OF IT ACT , 1961 WITH EFFECTIVE FROM 05-08- 2015. AFTER RECEIPT OF THE ORDER, ASSESSEE FILED AN APPLICATION U/S 154 ON 14.06.2016 ( PB 1 ) REQUESTING TO GRANT THE APPROVAL SINCE DATE OF FO RMATION OF TRUST, I.E. 14-08-1992. THE APPLICATION U/S 154 IS STILL PENDING. THUS, FROM TH E ABOVE FACTS IT CAN BE NOTED THAT THE ASSESSEE HAS FILED THE APPLICATION FOR APPROVAL IN TIME. 2. IT IS SUBMITTED THAT THE ASSESSEE HAS APPLIED FOR A PPROVAL IN TIME. THIS APPLICATION IS STILL NOT REJECTED BUT KEPT PENDING FOR A LONG TIME. THER EFORE, ASSESSEE CANT BE MADE SUFFER 4 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. FOR THE MISTAKE OR INACTION ON THE PART OF DEPARTME NT. IN THESE CIRCUMSTANCES, EVEN WHEN APPROVAL TO THE SAID TRUST IS GRANTED BY THE COMMIS SIONER W.E.F. 05.08.2015 IN VIEW OF THE SUBSEQUENT APPLICATION DT. 04.08.2015 MADE IN C ONTINUATION TO EARLIER APPLICATION DT. 14.08.1992, THE CLAIM OF THE ASSESSEE CANNOT BE DIS ALLOWED AS SUCH APPROVAL WOULD RELATE BACK TO THE DATE OF APPLICATION. 3. IT IS SUBMITTED THAT IN THE FOLLOWING CASES, WHERE APPLICATION FOR APPROVAL IS MADE IN TIME BUT NO ACTION IS TAKEN ON SUCH APPLICATION, THE CON TRIBUTION MADE TO LIC TOWARDS THE GROUP GRATUITY SCHEME HAS BEEN ALLOWED. M/S MAN STRUCTURAL PVT. LTD. VS. ACIT ITA NO.63 TO 65/JP/2016 ORDER DT. 16.08.2016 THE FACTS OF THE CASE ARE THAT ASSESSEE FILED AN AP PLICATION FOR APPROVAL OF THE GROUP GRATUITY TRUST TO THE CIT ON 13.05.1996. SUBSEQUENT THERETO, THE LIFE INSURANCE CORPORATION OF INDIA (LIC) VIDE ITS LETTER DATED 16 .05.1996 ASKED THE LD. CIT TO GRANT APPROVAL OF THE GROUP GRATUITY SCHEME. IN PURSUANCE OF THE SCHEME, ASSESSEE HAS BEEN CONTRIBUTING TOWARDS THE GROUP GRATUITY FUND AND CL AIMING THE DEDUCTION IN TERMS OF SECTION 40A(7) OF THE INCOME TAX ACT, 1961. THE AO OBSERVED THAT THE GRATUITY FUND IS NOT RECOGNIZED BY THE LD. CIT AND THEREFORE, THE CO NTRIBUTION MADE BY THE ASSESSEE WAS DISALLOWED. THE RESPONDENT REVENUE VIDE LETTER DATE D 11.12.2014 INFORMED THAT THE RECORD RELATING TO MAY, 1996 IS NOT AVAILABLE IN THE OFFIC E OF THE REVENUE, THEREFORE, THE ASSESSEE FILED ANOTHER APPLICATION FOR THE GRANT OF APPROVAL UNDER RULE 2 PART C OF THE FOURTH SCHEDULE TO THE ACT. THE SAID APPROVAL WAS GRANTED BY THE REVENUE W.E.F. 23.06.2015 VIDE LETTER DATED 10.12.2015. THE SOLE BASIS OF DEN IAL IS THAT THE GRATUITY FUND IS NOT RECOGNIZED BY THE LD. CIT, HENCE, THE CONTRIBUTION MADE BY THE ASSESSEE IS NOT ALLOWABLE. THE LD. CIT(A) CONFIRMED THE ACTION OF AO. ON THESE FACTS, THE HONBLE ITAT AT PARA 7 OF ITS ORDER HELD AS UNDER:- 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS, THOUGH, DISPUTED TH AT THE APPLICATION OF THE ASSESSEE FOR GRANT OF APPROVAL, WAS NOT TRACEABLE IN THE OFFICE OF THE REVENUE BUT THE ASSESSEE WAS ABLE TO PRODUCE THE STAMPED COPY OF THE APPLICATION AND THE LETTER SUPPORTING THE APPLICATION DATED 13/5/1996 BEFORE THE BENCH. IT IS ALSO AN ADMITTED POSITION THAT THE 5 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. LIC VIDE LETTER DATED 16TH MAY, 1996 HAS REQUESTED THE REVENUE TO GRANT APPROVAL. IN OUR VIEW, ONCE THE THIRD PARTY I.E. LIC IS REQUESTING T HE REVENUE TO GRANT APPROVAL TO THE FUND CREATED FOR THE BENEFIT OF THE EMPLOYEES IN THE FOR M OF APPROVAL OF GRATUITY FUND THEN THE REVENUE CANNOT DISPUTE THAT THE ASSESSEE HAS NOT FI LED APPLICATION FOR GRANT OF APPROVAL OF THE GRATUITY FUND. MOREOVER, IN OUR VIEW, ONCE T HE REVENUE IS ACCEPTING THE STATUS OF THE ASSESSEE BEING APPROVED GRATUITY FUND AND HAS B EEN EXTENDED THE BENEFIT OF THE APPROVED GRATUITY FUND AFTER THE APPLICATION WAS IN ITIALLY FILED ON 13/5/1996, NOW THE REVENUE CANNOT DENY THE BENEFIT MERELY ON THE BASIS OF NON-GRANT OF THE APPROVAL BY THE AUTHORITIES. FOR THE NON ACTION OF THE REVENUE, THE ASSESSEE CANNOT BE DENIED WITH THE BENEFIT OF THE PENDENCY OF THE DEDUCTION ON ACCOUNT OF THE ABOVE CONTRIBUTION MADE TO THE GRATUITY FUND. ACIT VS. RAJASTHAN STATE SEEDS CORPORATION LTD. ITA NO. 893/JP/2012 ORDER DT. 17.07.2015 (JAIPUR) (TRIBUNAL) (PB 17-27) THE ASSESSEE PAID CERTAIN AMOUNT TO LIC TOWARDS PRE MIUM OF GROUP GRATUITY SCHEME. THE AO ASKED TO SUBMIT THE COPY OF APPROVAL OF THE GROU P GRATUITY SCHEME IN SUPPORT OF THEIR CLAIM OF DEDUCTION. THE ASSESSEE REPLIED THAT IT HA S MOVED APPLICATION FOR ITS APPROVAL IN TIME BUT FORMAL APPROVAL LETTER WAS NOT YET BEEN RE CEIVED. HOWEVER, THE DEPARTMENT HAD NOT REJECTED THE SCHEME. THE ASSESSING OFFICER AFTE R RELYING ON THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ELECTRA (JAIPUR) P. LTD. (2006) 282 ITR 598, DISALLOWED THE EXPENSES. CIT(A) DELETED THE DISALLO WANCE MADE BY THE AO. THE HONBLE TRIBUNAL UPHELD THE ACTION OF AO BY GIVING THE FOLL OWING FINDINGS AT PARA 9 OF ITS ORDER:- 9. THE ISSUE IS IDENTICAL TO AY 2006-07, WHICH HAS BEEN CONSIDERED BY THE COORDINATE BENCH IN ITA NO. 307/JP/2009 IN ASSESSEES OWN CASE . AS THE ASSESSEE HAS APPLIED FOR ITS APPROVAL IN TIME BUT FORMAL APPROVAL HAD NOT BEEN I SSUED BY THE DEPARTMENT, THEREFORE, THERE IS NO FAULT ON THE ASSESSEE. THE IDENTICAL IS SUE HAS BEEN DECIDED BY THE COORDINATE BENCH, WHICH IS SQUARELY APPLICATION ON THIS YEAR A LSO. THEREFORE, WE UPHOLD THE ORDER OF LD CIT(A). AGAINST THE ORDER OF HONBLE TRIBUNAL, DEPARTMENT F ILED AN APPEAL BEFORE HIGH COURT. THE HONBLE RAJASTHAN HIGH COURT VIDE ITS ORDER DT. 29. 04.2016 REPORTED AT 386 ITR 267 , DISMISSED THE APPEAL OF THE REVENUE BY GIVING THE FOLLOWING FINDINGS AT PARA 8 OF ITS ORDER:- 8. INSOFAR AS DISALLOWANCE OF CLAIM OF RS. 1,92,82 ,605 IS CONCERNED, ADMITTEDLY, THE ASSESSEE-RESPONDENT HAS CLAIMED TO HAVE APPLIED FOR ACCORDING APPROVAL OF GROUP 6 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. GRATUITY SCHEME TO THE CONCERNED CIT ON 31ST MARCH, 1981. ONCE THE ASSESSEE FILES AN APPLICATION FOR APPROVAL OF THE SCHEME, IT WAS FOR THE CIT TO HAVE TAKEN RECOURSE OF DISPOSING OF THE SAID APPLICATION EITHER TO APPROVE OR TO REJECT THE SAME. THE SAME HAVING NOT BEEN DONE FOR THE LAST MORE THAN ALMOST 25 YEARS, THE ASSESSEE COULD NOT HAVE BEEN BLAMED FOR THE SAME. THERE IS NO DENIAL BY THE AO THAT APPLICATION FOR APPROVAL HAS NOT BEEN FILED BY THE ASSESSEE ON 31ST MARCH, 1981. EVEN THE AO ADMITS THAT THE APPLICATION FOR APPROVAL WAS SUBMITTED ON 31ST MARC H, 1981 AND BOTH THE APPELLATE AUTHORITIES HAVE COME TO A DEFINITE FINDING OF FACT THAT ONCE AN APPLICATION HAS BEEN MOVED FOR APPROVAL AND HAVING NOT BEEN REJECTED THE N THE CLAIM COULD NOT HAVE BEEN DISALLOWED OR THE CLAIM COULD NOT HAVE BEEN REJECTE D MERELY BECAUSE THE CIT DID NOT ACCORD APPROVAL OF THE SAME. THE ASSESSEE CANNOT BE MADE TO SUFFER FOR INACTION OF THE REVENUE, ADMITTEDLY THE RESPONDENT-ASSESSEE IS A GO VERNMENT OF RAJASTHAN UNDERTAKING OR EVEN OTHERWISE THE CIT OUGHT NOT HAVE SLEPT OVER THE APPLICATION FOR APPROVAL FOR MORE THAN 25 YEARS. THE APPELLATE AUTHORITIES ARE W ELL JUSTIFIED IN COMING TO THE SAID CONCLUSION. NEEDLESS TO MENTION THAT A FINDING HAS BEEN GIVEN BY THE TRIBUNAL THAT THE AMOUNTS ARE BEING DISALLOWED BY THE LEARNED AO FROM YEAR TO YEAR AT LEAST FROM THE ASST. YR. 1996-97 I.E. ALMOST 20 YEARS BUT IS BEING ALLOW ED REGULARLY IN APPEAL THEREFORE, FOR THIS REASON ALSO WE REJECT THE CLAIM OF THE REVENUE . 4. WITHOUT PREJUDICE TO ABOVE, IT IS TO SUBMIT THAT IF THE ASSESSEE HAS NO CONTROL OVER THE FUND CREATED BY THE LIC FOR THE BENEFIT OF ITS EMPL OYEES, THEN EVEN IF GRATUITY FUND IS NOT APPROVED, NO DISALLOWANCE U/S 36(1)(V) CAN BE MADE. FOR THIS PURPOSE, RELIANCE IS PLACED ON THE FOLLOWING CASES:- CIT VS. TEXTOOL CO. LTD. (2013) 216 TAXMAN 327 (SC) THOUGH THE FISCAL STATUTE IS TO BE CONSTRUED STRICT LY AND NOTHING SHOULD BE ADDED OR SUBTRACTED TO THE LANGUAGE EMPLOYED IN THE SECTION, YET A STRICT CONSTRUCTION OF A PROVISION DOES NOT RULE OUT THE APPLICATION OF THE PRINCIPLES OF REASONABLE CONSTRUCTION TO GIVE EFFECT TO THE PURPOSE AND INTENTION OF ANY PAR TICULAR PROVISION OF THE ACT. FROM A BARE READING OF SEC. 36(1)(V) OF THE ACT, IT IS MAN IFEST THAT THE REAL INTENTION BEHIND THE PROVISION IS THAT THE EMPLOYER SHOULD NOT HAVE ANY CONTROL OVER THE FUNDS OF THE IRREVOCABLE TRUST CREATED EXCLUSIVELY FOR THE BENEF IT OF THE EMPLOYEES. IN THE INSTANT CASE, IT IS EVIDENT THAT THE ASSESSEE HAD ABSOLUTELY NO C ONTROL OVER THE FUND CREATED BY THE LIC FOR THE BENEFIT OF THE EMPLOYEES OF THE ASSESSEE AN D FURTHER ALL THE CONTRIBUTION MADE BY THE ASSESSEE IN THE SAID FUND ULTIMATELY CAME BACK TO THE TEXTOOL EMPLOYEES GRATUITY FUND APPROVED BY THE COMMISSIONER WITH EFFECT FROM THE FOLLOWING PREVIOUS YEAR. THUS, THE CONDITIONS STIPULATED IN SECTION 36(1)(V) OF TH E ACT WERE SATISFIED. NARASUS SPINNING MILLS VS. ACIT (2016) 157 ITD 512 (CHENNAI) (TRIB.) 7 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. WHERE ASSESSEE PAID AMOUNT TOWARDS EMPLOYEES GROUP GRATUITY FUND TO LIC AND APPLICATION MADE BY ASSESSEE WAS STILL PENDING BEFO RE COMMISSIONER FOR APPROVAL AND ASSESSEE HAD NO CONTROL OVER FUND CREATED BY LIC FO R BENEFIT OF ITS EMPLOYEES, DISALLOWANCE U/S 36(1)(V) WAS NOT BE MADE. JAISALMER CENTRAL CO-OPERATIVE BANK LTD. VS. JCIT ( 2013) 158 TTJ 0001 (JODH.) (TRIB.) THE HONBLE TRIBUNAL AFTER RELYING ON THE DECISION OF APEX COURT IN CASE OF CIT VS. TEXTOOL CO. LTD. HELD THAT PAYMENT MADE BY ASSESSEE COMPANY DIRECTLY TO LIC TOWARDS GROUP GRATUITY FUND IS ALLOWABLE EVEN THOUGH THE SA ME IS NOT APPROVED BY THE CIT 5. THE AO HAS RELIED ON THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ELECTRA (JAIPUR) P. LTD. (2006) 282 ITR 598 . IT IS DISTINGUISHABLE ON FACTS AS IN THIS CASE THE ASSESSEE HAS NOT APPLIED FOR THE APPROVAL OF THE GRATUITY SCHEME WHEREAS IN THE PRESENT CASE THE ASSESSEE HAS DULY APPLIED FOR APPR OVAL OF THE SCHEME AND THE SCHEME WAS NOT REJECTED. 4.5 THE FACTS ARE THAT THE ASSESSEE HAD MADE AN APP LICATION SEEKING APPROVAL FOR THE EMPLOYEES GROUP GRATUITY SCHEME WAY BACK IN 199 2 IS NOT DISPUTED BY THE REVENUE. IT IS ALSO NOT DISPUTED THAT THIS IS THE FIRST TIME, WHEN THE CLAIM IS DISALLOWED BY THE REVENUE. THERE IS NOTHING PLACED ON RECORD THAT DELAY IN APPROVAL WAS ATTRIBUTABLE TO THE ASSESSEE FOR WANT OF ANY IN FORMATION. THE HONBEL RAJASTHAN HIGH COURT RENDERED IN THE CASE OF PR. COMMISSIONER OF INCOME TAX VS. RAJASTHAN STATE SEEDS CORPORATION LTD., UNDER THE IDENTICAL F ACTS ARE HELD AS UNDER:- 8. INSOFAR AS DISALLOWANCE OF CLAIM OF RS. 1928260 5/- IS CONCERNED, ADMITTEDLY, THE ASSESSEE RESPONDENT HAS CLAIMED TO HAVE APPLIED FOR ACCORDING APPROVAL OF GROUP GRATUITY SCHEME TO THE CONCERNED COMMISSIONER ON 31ST MARCH, 1981. ONCE THE ASSESSEE FILED AN AP PLICATION FOR APPROVAL OF 8 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. THE SCHEME, IT WAS FOR THE COMMISSIONER TO HAVE TAK EN RECOURSE OF DISPOSING OF THE SAID APPLICATION EITHER TO APPROVE OR TO REJ ECT THE SAME. THE SAME HAVING NOT BEEN DONE FOR THE LAST MORE THAN ALMOST 25 YEARS, THE ASSESSEE COULD NOT HAVE BEEN BLAMED FOR THE SAME. THERE IS NO DENIAL BY THE AO THAT APPLICATION FOR APPROVAL HAS NOT BEEN FILED BY THE ASSESSEE ON 31.03.1981. EVEN THE ASSESSING OFFICER ADMITS THAT THE APPLICAT ION FOR APPROVAL WAS SUBMITTED ON 31ST MARCH, 1981 AND BOTH THE APPELLAT E AUTHORITIES HAVE COME TO A DEFINITE FINDING OF FACT THAT ONCE AN APPLICAT ION HAS BEEN MOVED FOR APPROVAL AND HAVING NOT BEEN REJECTED THEN THE CLAI M COULD NOT HAVE BEEN DISALLOWED OR THE CLAIM COULD NOT HAVE BEEN REJECTE D MERELY BECAUSE THE COMMISSIONER DID NOT ACCORD APPROVAL OF THE SAME. THE ASSESSEE CANNOT BE MADE TO SUFFER FOR INACTION OF THE REVENUE, ADMITTE DLY THE RESPONDENT ASSESSEE IS A GOVERNMENT OF RAJASTHAN UNDERTAKING O R EVEN OTHERWISE THE COMMISSIONER OUGHT NOT HAVE SLEPT OVER THE APPLICAT ION FOR APPROVAL FOR MORE THAN 25 YEARS. THE APPELLATE AUTHORITIES ARE WELL JUSTIFIED IN COMING TO THE SAID CONCLUSION. NEEDLESS TO MENTION THAT A FINDIN G HAS BEEN GIVEN BY THE TRIBUNAL THAT THE AMOUNTS ARE BEING DISALLOWED BY T HE LEARNED AO FROM YEAR TO YEAR AT LEAST FROM THE ASSESSMENT YEAR 1996-1997 I.E ALMOST 20 YEARS BUT IS BEING ALLOWED REGULARLY IN APPEAL THEREFORE, FOR THIS REASON ALSO WE REJECT THE CLAIM OF THE REVENUE. THE ASSESSING OFFICER OU GHT NOT HAVE MADE A REPEATED ADDITION MERELY FOR THIS PURPOSE AND A LIT IGATION OF THIS NATURE OUGHT NOT TO HAVE COME BEFORE THIS COURT AS APPEALS ALL T HROUGHOUT IS BEING ALLOWED YEAR AFTER YEAR. ON THE ONE HAND THE REVENUE DOES NOT DECIDE THE APPLICATION FOR APPROVAL AND THE AMOUNT IS BEING DISALLOWED BY THE ASSESSING OFFICER FROM YEAR TO YEAR WHICH IS NOT AT ALL JUSTIFIED. THE RE VENUE IS WELL ADVISED NOT TO MAKE REPETITIVE ADDITIONS/DISALLOWANCE FOR THIS PUR POSE AND EXPOSE ITS WEAKNESS BEFORE THE COURTS AS ON THE ONE HAND APPLI CATION FOR ACCORDING APPROVAL HAS NOT BEEN GRANTED AND FOR INACTION OF C OMMISSIONER AMOUNTS ARE DISALLOWED AND TO INCUR WASTEFUL PUBLIC MONEY EITHE R WAY AS AT LEAST THE RESPONDENT HAS ALSO TO INCUR PUBLIC MONEY TO DEFEND ITS CASE BEING A GOVERNMENT OF RAJASTHAN UNDERTAKING IN FILING REPET ITIVE APPEALS THOUGH 9 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. SUCCEEDING YEAR AFTER YEAR. MERELY BECAUSE THE TAX EFFECT IS MORE THAN WHAT IS PRESCRIBED IN THE CIRCULARS BE IT OLD OR THE LAT EST BEING IN DECEMBER 2015 IS NO GROUND TO FILE SUCH APPEALS, WE THOUGH WERE INCL INED TO LEVY COST ON THE REVENUE BUT STOP OURSELVES IN DOING THE SAME TO MAK E IT CLEAR TO THE REVENUE TO BE MORE CAREFUL IN FUTURE THAT SUCH KIND OF LITIGATION DESERVES TO BE AVOIDED AS THE COURTS ARE CHOKED WITH SUCH FRIVO LOUS LITIGATION AND IS NOT ABLE TO CONCENTRATE ON OTHER IMPORTANT ISSUES. 4.6 IN THE PRESENT CASE ALSO THE ASSESSEE HAD FILED AN APPLICATION SEEKING APPROVAL FOR EMPLOYEES GROUP GRATUITY SCHEME IN THE YEAR 1992 AND WHEN NO ACTION WAS TAKEN, ASSESSEE AGAIN FILED AN APPLICATION ON 4 /8/2015 ON THIS APPLICATION THE APPROVAL WAS GRANTED. THE REVENUE HAS NOT PLACED A NY MATERIAL ON RECORD DEMONSTRATING THE REASONS FOR NON-GRANTING OF APPRO VAL. IT IS ALSO NOT IN DISPUTE THAT, THIS IS THE FIRST TIME WHEN THE CLAIM HAS BEE N DISALLOWED. 4.7 THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD. THE ASSESSMENT ORDER PERTAINING TO THE ASSESSMENT YEAR 2012-13 PAS SED U/S 143(3) OF THE INCOME TAX ACT BY THE LD. ADDITIONAL COMMISSIONER OF INCOM E TAX AND ALSO THE ASSESSMENT ORDER PASSED IN RESPECT OF THE ASSESSMENT ORDER 201 1-12. IN BOTH THE ASSESSMENT ORDERS NO DISALLOWANCE IS MADE WITH REGARD TO THE C ONTRIBUTION TO LIC GROUP GRATUITY SCHEME. THE ASSESSEE HAS CLAIMED THE EXPENSES RELA TED THE CONTRIBUTION OF GRATUITY FUNDS IN THE AYS 2011-12 AND 2012-13. 4.8 UNDER THESE FACTS, IN VIEW OF THE JUDGMENT OF T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS. RAJASTHAN STATE SE EDS CORPORATION LTD. (SUPRA). WE ARE OF THE CONSIDERED VIEW, THAT THE AUTHORITIES BE LOW WERE NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO 10 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR. DELETE THE DISALLOWANCE MADE ON ACCOUNT OF CONTRIBU TION TO LIC GROUP GRATUITY SCHEME. THIS GROUND OF THE ASSESSEES APPEAL IS AL LOWED. 5. GROUND NO. 2, IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 6. GROUND NO. 3 , IS PRAYER FOR COST, NO SPECIFIC SUBMISSIONS ARE M ADE IN RESPECT OF THE AWARDING OF COST. UNDER THESE FACTS, THE PA RTY BEARS THEIR OWN COST. THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 352/JP/2017 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 10 TH DAY OF AUGUST 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 10/08/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JAIPUR. 2. THE RESPONDENT- THE ACIT, CIRCLE-6, JAIPUR. 3. THE CIT, 4. THE CIT (A) 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 352/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 11 ITA NO. 352/JP/2017. M/S RAJASTHAN COOPERATIVE DAIRY FEDERATION LTD., JA IPUR.