Pioneer Steels Employees Group Gratuity Fund, Coimbatore V. Additional/ Joint/ Deputy/ Assistant Commissioner of Income Tax - National E-Assessment Centre, Delhi, Delhi

ITA 457/CHNY/2023

AI Insights

The case involves M/s. Pioneer Steels Employees Group Gratuity Fund, which appealed against the order of the Commissioner of Income Tax (Appeals) that upheld the disallowance made by the Assessing Officer of Rs.3,81,095 claimed under section 10(25) of the Income Tax Act, 1961. The disallowance was due to the absence of approval from the competent authority for the group gratuity fund. The Tribunal noted that the assessee had repeatedly sought approval but received no response. The Tribunal decided to give the Revenue another opportunity to verify the status of the approval application and determine if the assessee's claim could be allowed based on deemed approval.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135089 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 09-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANDYAARTI
• Keywords: Competent authority; Set aside

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ (एस एम सी) ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ (SMC) BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT आयकर अपील सं./ITA No.: 457/CHNY/2023 िनधाᭅरण वषᭅ/Assessment Year: 2018-19 M/s. Pioneer Steels Employees Group Gratuity Fund, 358, Mettupalayam Road, Coimbatore – 641 043. PAN: AABTP 6567E Vs. The ACIT (Exemptions), Coimbatore (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Ms. Sandyaarti, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri G. Johnson, Addl.CIT सुनवाई कᳱ तारीख/Date of Hearing : 14.06.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 16.06.2023 आदेश /O R D E R This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 17.01.2023. The assessment was framed by the Addl./Joint/Deputy/Asst. Commissioner of Income Tax/Income Tax Officer, National e-Assessment Centre, Delhi for the assessment year 2018-19 u/s.143(3) r.w.s. 143(3A) & 143(3B) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 06.01.2021. - 2 - ITA No.457/Chny/2023 2. At the outset it is noticed that this appeal are barred by limitation by 23 days. The impugned appellate order of CIT(A) was communicated to the assessee on 17.01.2023 and appeal was to be filed within 60 days i.e., 18.03.2023 but actually the appeal was filed only on 10.04.2023 thereby there was a delay of 23 days. The assessee has filed condonation petition supported by affidavit stating that the assessee was based at Coimbatore and there was change in the authorized representative of the assessee. Therefore, in the process of collation of details and handing over documents to the newly appointed representative at Chennai, there was a delay. When the above reason was confronted to ld. Senior DR, he could not controvert the above fact situation. After going through the reasons given in the affidavit stating the reasons for delay of 20 days, I feel the cause as reasonable and hence, condone the delay and admit the appeal. 3. The only issue in this appeal of assessee is as regards to the order of CIT(A) upholding the disallowance made by AO of Rs.3,81,095/- claimed u/s.10(25) of the Act being contribution to gratuity fund without approval of group gratuity fund by CIT. 4. I have heard rival contentions and gone through facts and circumstances of the case. I noted that the assessee’s trust has filed an application for approval of gratuity fund under Part C of the fourth - 3 - ITA No.457/Chny/2023 schedule of the Act before ACIT, Circle XI, Coimbatore as claimed by it. This application is to be approved by the concerned CIT(Admin) / PCIT. The assessee time and again filed reminders and several reminder letters vide dated 05.01.2010, 01.02.2012 and 24.07.2015 were filed but remained unreplied. 5. The assessee filed return of income for the relevant assessment year 2018-19. The assessee is a gratuity fund trust of M/s. Pioneer Steels, a partnership firm and claimed exemption u/s.10(25) of the Act for an amount of Rs.3,81,095/- being contribution to group gratuity scheme. The AO simpliciter disallowed, for the reason that there is no approval from the competent authority i.e., PCIT for claim of deduction u/s.10(25) of the Act and hence, he made disallowance. The CIT(A) also confirmed the action of the AO but noted that the assessee’s application filed online seeking approval of PCIT, Coimbatore-1 on 29.04.2022 was accorded approval vide proceedings dated 27.10.2022 w.e.f., financial year 2022-23. It means, according to CIT(A), the assessee is eligible for claim of deduction u/s.10(25) of the Act from assessment year 2022-23 and hence, he rejected the claim of assessee. 6. I noted that the assessee has applied application for approval of group gratuity fund under Part C of the fourth schedule of the Act - 4 - ITA No.457/Chny/2023 before CIT/PCIT and has sent several reminders vide letters dated 05.01.2010, 01.02.2012 and 24.07.2015 but remains unanswered. It means that there is no fault on the part of the assessee for seeking approval of the group gratuity fund and there is no doubt about the genuineness of transaction. However, in entirety of facts, I’m of the view that let one more opportunity be given to the Revenue to enquire into the assessee’s trust application dated 15.04.2008 for approval of group gratuity fund, whether the same is rejected or not. In case, it is rejected prior to 01.04.2017, the assessee will have no case but if it is not decided, the deemed approval will come into play and AO has to allow the claim of assessee. In term of the above, the appeal of the assessee is set aside and remanded back to the file of the AO for fresh consideration in term of the above directions. 7. In the result, the appeal filed by the assessee is partly-allowed for statistical purposes. Order pronounced in the open court on 16 th June, 2023 at Chennai. Sd/- (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 16 th June, 2023 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ /CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF.