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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Before: MANISH AGARWAL
IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE BEFORE SHRI GEORGE MATHAN, JUDICIAL JUDICIAL MEMBER AND MANISH AGARWAL MANISH AGARWAL, ACCOUNTANT MEMBER , ACCOUNTANT MEMBER Assessment Year : 2015-16 CESCO Employees Gratuity CESCO Employees Gratuity Vs. CPC, Bengaluru CPC, Bengaluru 2nd nd Trust, floor, IDCO Tower, Tower, Janpath, Janpath, Bhubaneswar. Bhubaneswar. PAN/GIR No PAN/GIR No.AAATC 5953 G (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : None Revenue by : Shri Charan Dass, Sr : Shri Charan Dass, Sr DR Date of Hearing : 24/0 06/2024 Date of Pronouncement : 24/0 /06/2024 O R D E R Per Bench
This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld Addl/JCIT(A)-10, Mumbai dated 27.2.2024 10, Mumbai dated 27.2.2024 in Appeal No. in Appeal No.Addl/JCIT - 10,Mumbai/10001/2014 10,Mumbai/10001/2014-15 for the assessment year 2015 2015-16.
None represented None represented for the assessee and Shri Charan Dass, ld Sr. Charan Dass, ld Sr. DR appeared for the revenue. appeared for the revenue.
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A perusal of the order of ld Addl/JCIT(A)-10 shows that the appeal of the assessee has been dismissed on account of delay of 2413 days in filing the appeal. Also perusal of the order of ld Addl/JCIT(A)-10 shows that the assessee has given the reasons for the delay, as follows:
“Central Electricity Supply Company of Odisha Ltd (CESCO) was formed and became functional on 1.4.1999 for distribution of electricity in the Central part of Odisha as per the “Orissa Electricity Reform (Transfer of Undertakings, Assets, Liabilities, proceedings and personnel of Grid Corporation of Orissa Limited (GRIDCO) to Distribution companies) Rules, 1998”. Accordingly, the Govt. of Odisha transferred the distribution assets and properties alongwith personnel of Grid Corporation of Odisha Limited (GRIDCO) IN THE Central part of Odisha to Central Electricity Supply company of Odisha Ltd (CESCO). Grid Corporation of Odissa Limited (GRIDCO) disinvested 51% of its equity held in Central Electricity Supply company of Odisha Ltd (CESCVO) in favour of the consortium led by AES Corporation, USA after obtaining approval of State Government. The management of Central Electricity Supply Company of Odisha Ltd. (CESCO) was handed over to AES from 1.9.1999. AES unilaterally withdrew from CESCO’s management in 2001 after it was unable to pay power dues to Grid Corporation of Odisha Limited (GRIDCO).Subsequently, Electricity Regulatory Commission (OERC) too charge of the management of the utility and renamed it CESU in 2006. The assessee took place under the Central Electricity Supply Utility of Odisha Limited (Operation and Management Scheme, 2006). Then in the year 2020, Govt. of Odisha (GOO) formed a joint venture company namely TPCODL for distribution of electricity in central part of Odisha alongwith transferring all the assets, liabilities and personnel of CESO to Tata Power Central Odisha Distribution Limited (TPCODL). TPCODL holds 51% of shareholding in TPCODL and GOO held 49% shareholding through GRIDCO. The founder of the CESCO employees gratuity Trust (i.e. CEO of CESCO/CESu/tpcodl) vest the management of Trust with Board of Trustee, nominated by him in the official capacity and one employees
P a g e 2 | 6 representative to operate, maintain and transfer the fund in accordance with regulation framed. Management can change the trustee at any time if the post if abolished, or the incumbent is absent from duty or for transfer or superannuation. As mentioned above, there has been a change of hands of the management of employees gratuity trust frequently thereby being change in employees representatives to look after the statutory measures. In the present case, the order u/s.143(1) being passed on 30.3.2017, the appeal was supposed to be filed by 30.4.2017 i.e. maximum within thirty days. But the demand so raised was not noticed by anybody mainly due to changes as narrated above. The same could only be noticed by the officials upon attachment of the bank account by the taxation authorities on 27th November, 2023 and on studying the details, it was clear that the auditors of the Trust who were entrusted with the task of filing the income tax return had committed the mistake by filing it in ITR-7 instead of ITR-5, the Trust being approved by the Hon’ble Commissioner OF Income Tax under Rujle-4 of the Schedule-4 to the Income tax act, 1961 and not having section 12A registration. For compliance with Income tax rules, the assignment of filing Annual Income Tax return was entrusted to professional. They carryout the work and accordingly the provisions are complied with. But for the year under review, they filed wrong ITR and since the Pass word was not shared by them, the defective notices forwarded by the CPC could not be complied. Further, there being devastated cyclones in between the period where the principal distribution company had to remain engaged in reinstalling the damaged infrastructure this also added to the reason of not giving through to rectify the defects. Now, on being aware of such fact, the appellant rushed to the consultants and as per their suggestions, the present appeal is being filed which has been delayed by 2381 days and for this the request for delay condo nation is being made. Sir, the CESCO Employees Gratuity Trust was formed on 8.6.2000 for managing the corpus amount by investment and paying gratuity to 8279 employees after retirement/cessation of service as per OCS (Pension) Rules, 1992. CESCO employees Gratuity Trust is being managed by a Board of Trustee headed by chairman of Trust for investment of corpus P a g e 3 | 6 amount received from Grid Corporation of Orissa Limited and subsequently received from Central Electricity Supply Company of Orissa/Central Electricity Services Utility/Tata Power Central Odisha Distribution Limited and paying gratuity to all the pensioners as well as non-pensioners as per their eligibility. Any expenditure towards gratuity payment over and above the interest earned is to be borne by the employee. Trust is investing the above amount in different instruments as per the investment pattern prescribed by the Ministry of Finance, Govt. of Odisha and the trust is paying gratuity every month. Status of the entity is Association of Persons (AOP) since inception and it is not a charitable trust but a trust for employees benefits only, its income is exempt under rule-4 of part-C of Forth Schedule of the Income tax Act, 1961 with effect from dt.1.4.2010 by virtue of an order by the Commissioner of Income Tax, Bhubaneswar vide No.Tech/Sch/IV/GT-16/09-10/2010-11/8389-91 dtd 11th January, 2011. Demand raised by CP0C for an amount of Rs.1,18,80,090.00 by treating the same as Charitable Trust instead of an employee welfare trust and subsequently attachment of bank account by Income tax authorities has created uncertainty in the minds of various employees who are about to retire. Since funds of retired and about to retire employees’ are there in the trust and there being government participation with distribution company, the attachment has led to chaos and public may come to road. Any demand and its subsequent recovery will leave the retiring employees to live without any retirement corpus. This being an employee trust and being for their welfare, your honour is requested to condone the delay filing the appeal and allow for adjudication of the appeal in employees interest.”
The assessee is an employee gratuity trust of CESCO, a Government Organisation. The assessee has categorically mentioned that the reasons given by the assessee was on account of various changes in the management. The reasons given by the assessee expressly in regard to various electricity distribution Companies in Orissa are substantially similar
P a g e 4 | 6 because of the various changes in the shareholding pattern and taking over and disinvestment of the electricity companies. This being so, ld Sr DR was requested to show why the delay should not be condoned. Ld Sr DR agreed that the issue could be restored to the file of the ld Addl/JCIT(A)-10 for adjudication on merits.
We have considered the submissions of ld Sr DR. As it is noticed that the delay in filing of appeal before the ld ld Addl/JCIT(A)-10 was on account of changes in the management of the Board of Trustee in respect of the assessee, which is employee gratuity trust of the Electricity supply company in respect of Odisha and they are also looking after the gratuity fund of mostly 8279 employees of the CESCO. In the interest of justice, the delay in filing of appeal before the ld Addl/JCIT(A)-10 is condoned and the issues are restored to the file of the ld Addl/JCIT(A)-10 for adjudication on merits.
In the result, appeal of the assessee stands partly allowed for statistical purposes.
Order dictated and pronounced in the open court on 24/06/2024.