2019 (8) TMI 1488 - AT - Income Tax

Contribution made by the employer towards the superannuation fund - excess claim u/s.10 - addition made on account of excess amount of PRBS - assessee had not shown the amount of the contribution made by his employer towards the superannuation fund as his income in the income tax return - Double addition - HELD THAT - Assessee can claim the deduction on account of the contribution made by the employer to the tune of 1 lakh under the provisions of section 17(2)(vii) of the Act. Thus the amount contributed by the employer over and above 1 lakh is subject to tax in the hands of the assessee. On perusal of the form 16 issued by the employer we note that the amount of 4, 32, 094.00 has already been shown as income therein which has suffered the tax liability. Assessee in the revised return of income claimed the relief under section 89 of the Act on account of the contribution made by the employer towards the superannuation fund as it was representing the arrears for the financial years beginning from 2009-10 to 2012-13. But the revised return was not processed as the original return was belatedly filed which cannot be revised. Thus it is clear that the assessee was not given the benefit of the provisions of section 89 of the Act. Accordingly the apprehension of the Ld. DR is also answered in affirmative that the revised return was not processed being belated original return. Remains no doubt that the amount contributed by the employer of the assessee towards the superannuation fund has already been included to the total income of the assessee. Therefore we hold that further addition would lead to double addition which is prohibited under the provisions of law. - Decided in favour of assessee.

Summary

Issues:
1. Addition made on account of excess claim u/s.10 of the Income Tax Act 1961
2. Addition made on account of excess amount of PRBS claimed

Analysis:

Issue 1:
The primary issue in this case revolves around the addition made on account of excess claim under section 10 of the Income Tax Act 1961. The assessee had initially filed a revised return claiming a deduction for the contribution made by the employer towards the superannuation fund. However, the Assessing Officer (AO) disallowed the claim, leading to an addition of ?4,32,094 to the total income of the assessee. The learned Commissioner of Income Tax (Appeals) upheld the AO's decision, stating that the assessee wrongly claimed the amount received from the employer under PRBS and that the claim was in violation of the provisions of the Act. The CIT (A) observed that the assessee attempted to take undue advantage by making a wrong claim, resulting in the confirmation of the addition as an excess claim under section 10 of the IT Act.

Issue 2:
The second issue pertains to the addition made on account of the excess amount of PRBS claimed. The AO noted discrepancies in the amount claimed by the assessee in the pay slip and the certificate issued by the employer. The difference in the amounts led to an addition of ?5,849 to the total income of the assessee. The CIT (A) upheld the AO's decision on this issue as well, confirming the excess amount of PRBS claimed by the appellant. The appellate tribunal, after considering the arguments presented by both parties, reversed the orders of the authorities below. It was concluded that the amount contributed by the employer towards the superannuation fund had already been included in the total income of the assessee, and any further addition would result in double taxation, which is prohibited by law. Consequently, the tribunal directed the AO to delete the addition made, thereby allowing the appeal of the assessee.

In conclusion, the appellate tribunal ruled in favor of the assessee, directing the deletion of the additions made by the AO. The judgment highlighted the importance of adhering to the provisions of the Income Tax Act and avoiding double taxation.