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TMI Blog2021 (8) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... ATA SERVICES INDIA PVT. LTD [ 2015 (10) TMI 316 - ITAT CHENNAI] , JAIPUR THAR GRAMIN BANK [ 2016 (11) TMI 794 - RAJASTHAN HIGH COURT] and JAIPUR THAR GRAMIN BANK [ 2016 (11) TMI 794 - RAJASTHAN HIGH COURT] No disallowance of deduction claimed towards provision made for gratuity fund can be made even during the pendency of assessee s application for approval of the gratuity scheme. In the facts of the present appeal, as earlier discussed, there has been inordinate and unacceptable delay in disposing of assessee s application seeking approval of the gratuity scheme. Pertinently, while completing the assessment for assessment years 2011-12 and 2014-15 in assessee s own case, the AO himself has allowed deduction claimed towards provision crea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer (AO) while verifying the tax audit report noticed that the auditor has stated that the assessee has made provision for payment of gratuity of ₹ 13,14,859/-, which is not allowable under section 40(a)(ia) of the Act. Whereas, the assessee had not added back the amount while computing its income. Accordingly, the AO disallowed the amount in dispute and added back to the income of the assessee. Contesting the aforesaid addition, assessee preferred appeal before learned Commissioner (Appeals). However, the addition was sustained. 4. Learned counsel for the assessee submitted, the assessee has created a gratuity fund for the benefit of its employees named Tata Securities Limited Employees Gratuity Scheme . He submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ib.). 4. Capital IQ Information Systems (India) (P) Ltd. v. Additional Commissioner of Income Tax, Circle 1(2), Hyderabad (2014) 49 taxmann.com 313 (Hyderabad-Trib). 5. CIT v. Jaipur Thar Gramin Bank, (2016) 388 ITR 228 (Rajasthan) 6. Rajasthan Financial Corpn. V. Deputy Commissioner of Income Tax (1998) 66 ITD 1936 (Jaipur) 7. M/s Rajasthan Co-operative Dairy Federation Ltd. v. The ACIT, Circle 6, Jaipur (ITA No. 352/JP/2017). 8. Commissioner of Income Tax, Meerut v. Electra (Jaipur) (P) Ltd. (2006) 282 ITR 598 (Allahabad) 9. Peerless General Finance and Investment Company Ltd. v. Commissioner of Income Tax (416 ITR 1) (S.C) 10.Pr. Commissioner of Income Tax v. Rajasthan State Seed Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employees. The aforesaid factual position has not been disputed either by AO or learned Commissioner (Appeals). The only reason for disallowance of assessee s claim of deduction is due to non approval of the gratuity scheme. When, it is fact on record that assessee has applied for approval of the gratuity scheme in the year 2007, non approval of the said scheme even after more than 14 years is undesirable and has resulted in undue harassment to the assessee. Due to no fault of the assessee the deduction otherwise allowable has been denied. 8. In case of CIT vs. Textool Company Ltd. (supra), the Hon ble Supreme Court while dealing with identical issue of disallowance arising out of non approval of gratuity fund has observed, though, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (1998) 66 ITD 1936 (Jaipur) 5. Pr. Commissioner of Income Tax v. Rajasthan State Seed Corporation Ltd. (386 ITR 267) (Raj) 10. Thus, the legal principle which emerges from the aforesaid judicial precedents is, no disallowance of deduction claimed towards provision made for gratuity fund can be made even during the pendency of assessee s application for approval of the gratuity scheme. In the facts of the present appeal, as earlier discussed, there has been inordinate and unacceptable delay in disposing of assessee s application seeking approval of the gratuity scheme. Pertinently, while completing the assessment for assessment years 2011-12 and 2014-15 in assessee s own case, the AO himself has allowed deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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