2016 (6) TMI 1455 - AT - Income Tax

Rectification of mistake - deduction on account of additional contribution - applicability of limitations placed under Rule 87 to the payment of additional contribution - HELD THAT - As rightly pointed out by the assessee in the present Miscellaneous Application the direction given by the Tribunal of its order to the Assessing Officer to verify as to whether the amount in question paid by the assessee to Donation Fund is within the limits specified in the relevant Rules is not in consonance with the conclusion drawn by the Tribunal that the issue under consideration is squarely covered in favour of the assessee by the decision in Glaxo Smithkline Pharmaceuticals 2011 (1) TMI 1530 - ITAT MUMBAI wherein it was held that the limitations placed under Rule 87 are not applicable to the payment of additional contribution necessitated due to shortfall discovered in the course of actual valuation of the fund as the same is in the nature of one time exceptional payment to ensure that the superannuation fund is able to discharge its obligation. There is thus a mistake in the order of the Tribunal in giving such direction to the Assessing Officer while deciding this issue vide paragraph no 44 and the same being apparent from record we rectify the same by deleting last eight lines of the said para and substituting the same with the following - We are unable to accept this contention of the ld. D.R. In our opinion the issue involved in Ground No. 8 of the assessee s appeal is squarely covered in favour of the assessee by the decision of the Coordinate Bench of this Tribunal in the case of Glaxo Smithkline Pharmaceuticals (supra) and respectfully following the same we delete the addition made by the Assessing Officer and confirmed by the ld. CIT(Appeals) on this issue. Ground No 8 of the assessee s appeal for A.Y. 200405 is accordingly allowed . Miscellaneous Application of the assessee is allowed.

Summary

Issues: Rectification of mistakes in the order of the Tribunal regarding the deduction on account of additional contribution in the case of the assessee.

The judgment pertains to a Miscellaneous Application seeking rectification of mistakes in the Tribunal's order dated January 20, 2016. The assessee contended that the Tribunal had directed the Assessing Officer to verify if the amount paid as additional contribution was within the limits specified in relevant Rules, despite concluding in favor of the assessee based on a decision by the Coordinate Bench in a similar case. The Tribunal acknowledged the mistake in its order and rectified it by deleting the direction to verify the amount and substituting it with a statement affirming the decision in favor of the assessee based on the Coordinate Bench's ruling. The Tribunal clarified that the limitations under Rule 87 do not apply to additional contributions made to cover fund deficits discovered during actuarial valuation, as they are one-time exceptional payments to ensure fund obligations are met. Consequently, the Tribunal allowed the Miscellaneous Application of the assessee, thereby rectifying the mistake in the order. The judgment was pronounced on June 15, 2016, in an open court session.