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TMI Blog2025 (1) TMI 1468X X X X Extracts X X X X X X X X Extracts X X X X ..... to part fund the gap in actuarial valuation and actual contribution - As decided in Eastern Equipment and Sales [1990 (11) TMI 27 - CALCUTTA HIGH COURT] as relying on Gestetner Duplicators (P) Ltd. [1978 (12) TMI 1 - SUPREME COURT] where the Supreme Court while considering the approved provident fund held that if the provident fund contravenes any of the conditions to be satisfied for its recognition, the taxing authority may refer the question of withdrawal of recognition to the Commissioner, but until the Commissioner acting under the powers reserved to him withdraws such recognition, the taxing authority must proceed on the basis that the provident fund has satisfied all the conditions for its recognition in that year, any other course is bound to result in chaos and uncertainty which has to be avoided. Decided against the Revenue. Addition u/s 143(1) being sustained at the level of Ld. AO - As the concerned Kolkata Port Trust (Non-contributory Provident Fund) Regulations 1988 notified under the Major Port Trust Act does not specify any 'due date for this purpose, no disallowance u/s 36(1)(va) is warranted on account of the delay in deposit of the contribution. It is not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. With lot of effects, the physical folders were found in the end of February. Time barring orders u/s. 148A (d) was to be passed by this office in large number of cases and the issue being complicated involving bigger additions took substantial time to give appeal effects. 8. Thereafter, ASR was submitted on 22.03.2024 to the Range Head. 9. The Range Head took 23 days to prepare and forward his comments and finally the ASR was submitted in the office of the PCIT-5, Kolkata on 23.04.2024. 10. The PCIT-5, Kolkata directed that facts of the present case with the case of Excide industries relied by CIT (A) for allowing relief is to be re-examined and the judicial notings of filing further appeal or not filing to be ascertained from the JAO of Excide Industries. 11. Thereafter, the JAO of Excide Industries was contacted who took time to give any clarification and finally stated that he is not able to find the folder of Excide Industries. 12. It was also found the facts of the present case are different from Excide Industries case on a/c of Superannuation Fund and hence revised ASR was submitted on 19.04.2024. 13. The office of the PCIT-5 took 5 days' time to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowable quantum u/s 36(1)(v) of the Act. Regarding the third disallowance (which pertains to AY 2018-19 only) u/s 36(1)(va) of the Act, the Ld. DR averred that the Ld. AO was merely confirming the disallowance already made u/s 143(1) of the Act. 2.2 The Ld. AR, on the other hand supported the finding of the Ld. CIT(A), especially his reliance on the case of Exide Industries reported in 146 taxmann.com 21 (Cal) for the addition u/s 36(1)(iv), read with Rule 8D and the case of Easter Equipments and Sales Ltd. reported in 71 Taxman 226 (Cal) for the addition u/s 36(1)(v) read with Rule 103 of the I.T. Rules. The Ld. AR read out extensively from the Ld. CIT(A)'s order regarding the addition made u/s 36(1)(va) of the Act. 3. We have carefully considered the rival submissions and gone through the orders of authorities below. It is clear that regarding the first issue of contribution made to approved superannuation fund to bridge the gap between actual contribution and actuarial valuations, the order of the Hon'ble Calcutta High Court in the case of Exide Industries (supra) will need to prevail, considering the similarity of facts between that case and the present matter. Relevant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which have decided otherwise. Therefore, we do not wish to trade into the said territory. We are satisfied that the amount which was remitted by the respondent assessee is neither towards an initial contribution nor towards an ordinary annual contribution and, therefore, the ceiling fixed under the rules will not apply to such a contribution. That apart, this contribution had to be made considering the peculiar circumstances and it was a one-time payment, therefore we are of the view that the learned Tribunal rightly allowed the appeal filed by the assessee. That apart the decision in the case of Glaxo Smithkline Pharmaceuticals (supra) has been affirmed by the High Court of Judicature at Bombay." Respectfully, following this judgment, this ground is decided in favour of the assessee and against the Revenue. 3.1 Regarding the issue of alleged excess contribution to approved gratuity fund to part fund the gap in actuarial valuation and actual contribution, the case of Eastern Equipment and Sales (supra) comes to the Appellant's rescue as under: 2. Section 36(1)(v) of the Act provides that any sum paid by the assessee as an employer by way of contribution towards an approved g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority or the AAC and the authorities administering the provisions of the Act, have no power to go behind the approval granted by the Commissioner. Once the Commissioner accords approval, it is binding on the assessing authority and the assessing authority is devoid of power and jurisdiction to go behind the permission to find out whether the contribution made by the assessee is in conformity with the rules or in excess thereof. The Andhra Pradesh High Court relied on the decision of the Supreme Court in Gestetner Duplicators (P) Ltd. v. CIT (1979) 117 ITRI, where the Supreme Court while considering the approved provident fund held that if the provident fund contravenes any of the conditions to be satisfied for its recognition, the taxing authority may refer the question of withdrawal of recognition to the Commissioner, but until the Commissioner acting under the powers reserved to him withdraws such recognition, the taxing authority must proceed on the basis that the provident fund has satisfied all the conditions for its recognition in that year, any other course is bound to result in chaos and uncertainty which has to be avoided." Following this order, we have no hesitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue date for this purpose, no disallowance u/s 36(1)(va) is warranted on account of the delay in deposit of the contribution. It is not disputed by the A.O. that the deposit was actually made within a couple of days from the artificial 'due date'. Perusal of the column 20(b) of Form 3CD reflects that for most of the months the contribution as deposited well before the artificial 'due date' itself. Therefore, in my considered opinion, in the absence of any specified due date, deduction u/s 36(1)(va) cannot be denied when the contribution has actually been credited in the concerned fund within the following month of contribution. Consequently, the disallowance of Rs. 8,38,35,219 made by the A.O. u/s 36(1)(va) is hereby deleted. Ground of Appeal no. 5 is, thus, allowed." In result, this issue is also decided in favour of the assessee. 4. In the result, all the grounds filed by the Revenue in all the four years are hereby dismissed. 5. Regarding the Cross Objections filed by the appellant, it is noticed that they were merely in support of the action of Ld. CIT(A) and did not call for any separate adjudication. Accordingly, all CO's in the 4 years under consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X
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