TMI Blog2014 (1) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... e contribution made by the appellant as an employer towards the Karmachari Welfare Fund falls within the expression 'as required by or under any other law' for the purposes of section 40A(9) of the Act – Order of the AO and CIT(A) set aside ant the AO is directed to allow the claim of deduction made by the assessee – Decided in faovur of Assessee. - - - - - Dated:- 14-5-2013 - Order R. K. Panda (Accountant Member).- This appeal filed by the assessee is directed against the order dated September 2, 2011 of the Commissioner of Income-tax (Appeals)-I, Pune relating to the assessment year 2006-07. The only effective ground raised by the assessee reads as under : "On facts and circumstances prevailing in the case and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that it seeks to disallow sums paid by the assessee as an employer to the entities prescribed therein. In the present case, it is not in dispute that the assessee has incurred the expenditure of Rs.16,77,170 by way of contribution to the Karmachari Welfare Fund, as an employer, and therefore, its deductibility is governed by the provisions of section 40A(9) of the Act. The disallowance envisaged in section 40A(9) of the Act is subject to certain exceptions. As per the said exceptions, no disallowance would be made where such sum is paid : (i) for the purpose and to the extent provided under clauses (iv) or (v) of section 36(1) of the Act ; or, (ii) as required by or under any other law for the time being in force. The claim of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether the Regulations of such a statutory corporation, providing, inter alia, for the terms and conditions of employment and services of their employees carry a force of law or not. Another allied question was as to whether such statutory corporations are 'State' within the meaning of article 12 of the Constitution. Nevertheless, the pertinent question was whether the regulations providing for the terms and conditions of employment and conditions of service have the force of law or not ? In this connection, the following portion of the judgment of the hon'ble Supreme Court is worthy of notice : 'The statutory bodies in that case were : Oil and Natural Gas Commission, Industrial Finance Corporation and Life Insurance Corporation. All t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regulations are not only binding on the authority but also on the public. They give the employees a statutory status and impose obligations on the statutory authorities, who cannot deviate from the conditions of service.' 11. The hon'ble Supreme Court held that the regulations framed by the Corporations, being framed under the statutory provisions would have the force of law. The hon'ble Supreme Court further went on to hold that there was no distinction on principle between a person directly under the employment of the Government and a person under the employment of an agency or instrumentality of the Government or a Corporation, set up under a statute or incorporated but wholly owned by the Government. 12. In the background of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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