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TMI Blog1996 (9) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Rules was not applicable in the case of the assessee-company ? " R. C. No. 31 of 1990 pertains to the assessment year 1982-83, R. C. No. 38 of 1988 pertains to the assessment year 1983-84 and R. C. No. 102 of 1989 relates to the assessment year 1984-85. The assessee is a private limited company. In respect of the aforesaid three assessment years, the assessee claimed deduction of Rs. 12,000 being the contribution of the company at the rate of Rs. 3,000 per each of the four directors. The Income-tax Officer following rule 75 of the Income-tax Rules disallowed a sum of Rs. 12,000 on the ground that the total contribution both from the employee and the employer should not exceed Rs. 250 per month. On appeal, the Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (38) of section 2 of the Income-tax Act in the following terms : " 'recognised provident fund' means a provident fund which has been and continues to be recognised by the Chief Commissioner or Commissioner in accordance with the rules contained in Part A of the Fourth Schedule, and includes a provident fund established under a scheme framed under the Employees' Provident Funds Act, 1952. " Part A of the Fourth Schedule contains the rules for recognised provident funds. Rule 1 specifically lays down that Part A has no application "to any provident fund to which the Provident Funds Act, 1925 applies". As contemplated in section 36(1)(iv) of the Income-tax Act concerning the limits to the contributions to provident funds deductible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 2(38) of the Income-tax Act contemplates two categories of provident funds--(i) a provident fund which has been recognised by the Chief Commissioner or Commissioner by applying the rules contained in Part A of the Fourth Schedule ; and (ii) a provident fund established under the scheme framed under the Employees' Provident Funds Act, 1952. The restriction of Rs. 250 specified in rule 75(1) of the Income-tax Rules applies to the first category, but not to the second category for the reason that the second category contributions are not in respect of a provident fund "maintained by the company" (emphasis supplied). However, Sri S. R. Ashok, the learned senior advocate for the Revenue, has invited our attention to a decision of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing deduction to Rs. 250 only in respect of contributions made by an employer "to the recognised provident fund maintained by the company" and these crucial words were not noticed by the Division Bench in the aforesaid case. We, therefore, with great respect to the learned judges, are inclined to hold that the view expressed by the Division Bench is per incuriam, in that, the crucial part of the rule has not been noticed. For the above reasons, we are unable to accept the argument of Sri S. R. Ashok, the learned senior advocate appearing for the Revenue, that the assessee is not entitled to deduction in excess of Rs. 6,000. In the result, we answer the question in the affirmative, in favour of the assessee and against the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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