TMI Blog2017 (8) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... L BHARAT, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P.C.Parwal (CA) For The Revenue : Shri R.A. Verma (Addl. CIT) 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 appeal :- 1. The Ld. Commissioner of Income Tax (Appeals) has erred on facts an in law in confirming the disallowance of contribution made to LIC Group Gratuity Scheme of ₹ 1,66,96,379/- u/s 36(1)(va) 40A(7). 2. The assessee craves right to add, alter or amend 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 the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act) was framed vide order dated 29/03/2016. While framing the assessment the Assessing Officer disallowed the claim related to PF Contribution and Contribution to LIC Group Gratuity Scheme and also made addition on disallowance of Prior Period Expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT, Jaipur dated 23.12.1992 (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 and fixed the case for hearing on 11.01.1993. However, till 2015 no communication was received. Therefore, the assessee again on 04.08.2015 (PB 12) filed an application for approval mentioning the reference of earlier application filed 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 Gratuity 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 formation of trust, i.e. 14-08-1992. The application u/s 154 is still pending. Thus, from the 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 approval in time. This application is still not rejected but kept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench. It is also an admitted position that the 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 the revenue to grant approval to the fund created for the benefit of the employees in the form of approval of gratuity fund then the revenue cannot dispute that the assessee has not filed application for grant of approval of the gratuity fund. Moreover, in our view, once the revenue is accepting the status of the assessee being approved gratuity fund and has been extended the benefit of the approved gratuity fund after the application was initially 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 premium of group gratuity scheme. The AO asked to submit the copy of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er for inaction of the Revenue, admittedly the respondent-assessee is a Government 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 well 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 allowed 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 employees, 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 strictly 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 reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the identical facts are held as under:- 8. Insofar as disallowance of claim of ₹ 19282605/- 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 application for approval of the scheme, it was for the Commissioner 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 31.03.1981. Even the Assessing Officer admits that the application for approval was submitted on 31st March, 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 then the claim could not have been disallowed or the claim could not have been rejected merely because the Commissioner did not accord approval of the same. The assessee cannot be made to suffer for inaction of the revenue, admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed. 4.7 The Ld. Counsel for the assessee has placed on record. The assessment order pertaining to the assessment year 2012-13 passed u/s 143(3) of the Income Tax Act by the Ld. Additional Commissioner of Income Tax and also the assessment order passed in respect of the assessment order 2011-12. In both the assessment orders no disallowance is made with regard to the contribution to LIC Group Gratuity Scheme. The assessee has claimed the expenses related the contribution of gratuity funds in the AYs 2011-12 and 2012-13. 4.8 Under these facts, in view of the judgment of the Hon ble Jurisdictional High Court in the case of Pr. CIT vs. Rajasthan State Seeds Corporation Ltd. (Supra). We are of the considered view, that the authorities below were not justified in disallowing the claim of the assessee. Therefore, we direct the Assessing Officer to delete the disallowance made on account of contribution to LIC Group Gratuity Scheme. This ground of the assessee s appeal is allowed. 5. Ground no. 2 , is general in nature and needs no separate adjudication. 6. Ground no. 3 , is prayer for cost, no specific submissions are made in respect of the awarding of cost. Under t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
