PIONEER STEELS EMPLOYEES GROUP GRATUITY FUND,,COIMBATORE vs. ADDITIONAL/ JOINT/ DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX - NATIONAL E-ASSESSMENT CENTRE, DELHI, DELHI

At the outset it is noticed that this appeal are barred by limitation by 23 days. The impugned appellate order of CIT(A) was communicated to the assessee on 17.01.2023 and appeal was to be filed within 60 days i.e., 18.03.2023 but actually the appeal was filed only on 10.04.2023 thereby there was a delay of 23 days. The assessee has filed condonation petition supported by affidavit stating that the assessee was based at Coimbatore and there was change in the authorized representative of the assessee. Therefore, in the process of collation of details and handing over documents to the newly appointed representative at Chennai, there was a delay. When the above reason was confronted to ld. Senior DR, he could not controvert the above fact situation. After going through the reasons given in the affidavit stating the reasons for delay of 20 days, I feel the cause as reasonable and hence, condone the delay and admit the appeal.

The only issue in this appeal of assessee is as regards to the order of CIT(A) upholding the disallowance made by AO of Rs.3,81,095/- claimed u/s.10(25) of the Act being contribution to gratuity fund without approval of group gratuity fund by CIT.

I have heard rival contentions and gone through facts and circumstances of the case. I noted that the assessee’s trust has filed an application for approval of gratuity fund under Part C of the fourth

- 3 - Act before ACIT, Circle XI, Coimbatore as claimed by it. This application is to be approved by the concerned CIT(Admin) / PCIT. The assessee time and again filed reminders and several reminder letters vide dated 05.01.2010, 01.02.2012 and 24.07.2015 were filed but remained unreplied.

The assessee filed return of income for the relevant assessment year 2018-19. The assessee is a gratuity fund trust of M/s. Pioneer Steels, a partnership firm and claimed exemption u/s.10(25) of the Act for an amount of Rs.3,81,095/- being contribution to group gratuity scheme. The AO simpliciter disallowed, for the reason that there is no approval from the competent authority i.e., PCIT for claim of deduction u/s.10(25) of the Act and hence, he made disallowance. The CIT(A) also confirmed the action of the AO but noted that the assessee’s application filed online seeking approval of PCIT, Coimbatore-1 on 29.04.2022 was accorded approval vide proceedings dated 27.10.2022 w.e.f., financial year 2022-23. It means, according to CIT(A), the assessee is eligible for claim of deduction u/s.10(25) of the Act from assessment year 2022-23 and hence, he rejected the claim of assessee.

I noted that the assessee has applied application for approval of group gratuity fund under Part C of the fourth schedule of the Act

In the result, the appeal filed by the assessee is partly-allowed for statistical purposes.