2019 (7) TMI 1026 - AT - Income Tax

Revision u/s 263 - Not disallowing the deduction claimed by the assessee u/sec. 36(1)(iv) r.w.s. 43B of the Act, relating to the contribution to the Superannuation Fund paid to SBI Life Cap Superannuation Fund towards 80% of employer s contribution for the F.Y. 2013-14 - HELD THAT - The deduction u/sec. 36(1)(v) and the deduction u/sec. 36(1)(iv) both are for the benefit of the employees and pertained to the superannuation funds. Therefore the judgment of the Hon ble apex court squarely applies to section 36(1)(iv) also, since the Superannuation Fund is also for the benefit of the employees. Having made the payments to the SBI Life Cap Assured Gold Superannuation Scheme and the Superannuation Fund of the company was approved by CIT subsequently, we hold that the decision of this Tribunal in the case of The District Co-operative Central Bank (supra) and the decision of Hon ble apex court is equally applies to the assessee s case also and accordingly we hold that the assessee is entitled for deduction u/sec. 36(1)(iv) r.w.s. 43B of the Act. As during the course of assessment proceedings, the Assessing Officer had examined the issue and taken a conscience decision for allowing deduction. The assessee placed a copy of note filed before the Assessing Officer. DR did not place any evidence to support that note was not placed before the Assessing Officer during the course of assessment proceedings. The assessee duly certified in the paper book that the note was filed before the Assessing Officer. Since the issue has been examined and the deduction was allowed by the Assessing Officer, the assessment framed u/sec. 143(3) cannot be held to be erroneous, hence, order passed by the Pr.CIT is unsustainable. Accordingly, we set aside the order passed u/sec. 263 and restore the assessment order. Thus, this appeal filed by the assessee is allowed.

Summary

Issues:
Jurisdiction under section 263 of the Income Tax Act regarding deduction claimed by the assessee under section 36(1)(iv) read with section 43B for contribution to Superannuation Fund.

Analysis:
The appeal challenged the order of the Principal Commissioner of Income Tax, Vijayawada, for the Assessment Year 2014-15, focusing on the jurisdiction under section 263 of the Act. The Principal Commissioner revised the assessment order made under section 143(3) concerning the deduction claimed by the assessee for the contribution to the Superannuation Fund. The Commissioner found the deduction not allowable as the Superannuation Fund was recognized after the relevant period. The assessee contended that the Assessing Officer had examined the issue before allowing the deduction, and no error existed in the assessment order. The Commissioner's reliance on various decisions supported the revision under section 263.

The assessee argued that the Assessing Officer had already considered and allowed the deduction after due examination during the assessment proceedings. Additionally, the assessee claimed that the contribution to the Superannuation Fund was allowable under section 36(1)(iv) on a payment basis, citing relevant court decisions. The assessee emphasized that the Superannuation Fund was created for the employees' benefit, and the approval process was duly followed, ensuring no control over the fund by the company.

During the hearing, the Departmental Representative contended that the deduction was allowed without proper enquiry by the Assessing Officer. The Department argued that the case law cited by the assessee was not applicable as it pertained to a different fund category. The Tribunal examined the evidence presented, including the payment details and approval of the Superannuation Fund, concluding that the deduction was allowable under section 36(1)(iv) read with section 43B.

The Tribunal found that the Assessing Officer had examined the issue and made a conscious decision to allow the deduction, supported by the note filed by the assessee. As the deduction was rightfully allowed, the assessment order under section 143(3) was not erroneous. Consequently, the Tribunal set aside the revision order under section 263 and restored the assessment order, allowing the appeal filed by the assessee.

In conclusion, the Tribunal upheld the assessee's entitlement to the deduction for the contribution to the Superannuation Fund under section 36(1)(iv) read with section 43B, based on the proper approval process and lack of control over the fund. The Tribunal emphasized the Assessing Officer's prior examination and decision-making process, leading to the allowance of the deduction and rendering the revision order unsustainable.