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Facts
The assessee, an approved provident fund, claimed exemption under Section 10(25) for its interest income for AY 2020-21. However, the Assessing Officer (AO) treated this income as taxable in the intimation under Section 143(1). The assessee's appeal to the Addl/JCIT(A) was dismissed solely due to a delay in filing, without addressing the merits of the exemption claim.
Held
The Tribunal found sufficient cause for the delay in filing the appeal and condoned it. Consequently, the Tribunal set aside the Addl/JCIT(A)'s order and remitted the matter back to the AO. The AO is directed to examine the evidence, consider the assessee's past history where exemption under Section 10(25) was granted in subsequent assessment years, and grant the exemption if conditions for a provident fund's income are met.
Key Issues
1. Whether the delay in filing an appeal before the Addl/JCIT(A) should be condoned. 2. Whether the interest income of an approved provident fund is exempt under Section 10(25) of the Income Tax Act.
Sections Cited
143(1), 250, 10(25), 234B, 234C, 249
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the ADDL/JCIT(A)-13, Mumbai. [hereinafter referred to as Ld. ‘Addl/JCIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2020-21 dated 30.10.2024, which has been passed against the intimation order u/s 143(1) of the Act, dated 31.12.2021. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. That on the facts and circumstances of the case intimation u/s 143(1) issued is bad and in law and on facts.
That on the facts and in the circumstances of the case the Ld. Assistant Director of Income Tax, CPC was not justified in computing the total income at Rs. 5,21,64,354/- and raising a tax Demand of Rs. 2,25,01,090/- I.T.A. No.: 2434/KOL/2024 Assessment Year: 2020-21 Ludlow Jute Company Limited Provident Fund.
That on the facts and in the circumstances of the case the Ld. Assistant Director of Income Tax should have appreciate that since the assessee is an approved Provident Fund under the Income Tax Act its income was exempted u/s 10(25) of the IT Act, 1961. 4. That on the facts and in the circumstances of the case, on the disposal of the appeal there will be reduction and/or deletion of interest u/s 234B of Rs. 37,48,689/-, hence necessary direction may please be given to the A.O. to modify the computation of interest u/s 234B.
That on the facts and in the circumstances of the case, on the disposal of the appeal there will be reduction and/or deletion of interest u/s 234C of Rs. 9,01,470/-, hence necessary direction may please be given to the A.O. to modify the computation of interest u/s 234C.
That the appellant craves leave to submit additional evidence as per Rule 46A, either before or at the time of hearing of this appeal. 7 That on the facts and in the circumstances of the case, on disposal of this appeal, material adjustments would be required in computing total income, and tax (including interest, if any, payable by and/or to the appellant) for the assessment year under reference and necessary direction may be given to the AO on this front.
That the assessee craves leave to add or modify, delete or alter all or any of the grounds of appeal.
0 The assessee is an approved Provident Fund under the Income Tax Act its income was exempted u/s 10(25) of the IT Act, 1961. 3.1 During the relevant assessment year under consideration, the assessee had earned interest on investments amounting to Rs. 5,21,64,350/-. In the computation of total income, entire income received was claimed exempt, in view of the provisions of section 10(25) of the Income-tax Act, 1961. 3.2 In the order u/s 143(1), the A.O. has considered the entire income earned by the appellant during the Assessment year under consideration as Total Income as regards to the contention of the assessee that, the said income was exempt in view of the provisions of section 10(25) of the Income Tax Act, 1961 and raised a Tax demand of Rs. 2,25,01,090 though it/-.”
Brief facts of the case are that the assessee is a registered provident fund Trust running its operations under the name of "Ludlow Jute Company Limited Provident Fund" (in short ‘LJCLPF’). LJCLPF maintained provident fund contribution. The source of income of the said Trust was interest income. The return of Income for the AY 2020- 21 was filed on 23.11.2020 showing total income at ₹ ‘NIL’ under the normal provisions of the Act. The said return was processed u/s 143(1) I.T.A. No.: 2434/KOL/2024 Assessment Year: 2020-21 Ludlow Jute Company Limited Provident Fund. of the Act dated 31.12.2021 wherein the entire interest income earned by the Trust was made taxable determining total income under the normal provisions of the Act at ₹ 5,21,64,350/-. In the said order, the Assessing Officer (hereinafter referred to as Ld. 'AO') made various disallowances and denied claim in computing total income of the assessee. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. Addl/JCIT(A) who did not condone the delay and dismissed the appeal without discussing the merits of the case. Before us, it was submitted that the Ld. Addl/JCIT(A) was not justified in not condoning the delay and if the delay is not condoned the assessee would suffer as the income of the assessee is exempt under the Act.
We have considered the submissions made. The assessee submitted that for the reasons for the delay in filing appeal before the Ld. Addl/JCIT(A), the delay ought to have been condoned by him and the appeal should have been decided on merits as there was sufficient cause. The assessee in the course of appeal before the Ld. Addl/JCIT(A) had submitted as under: “1.0 This is to bring to your notice that order u/s 143(1) of the Income Tax Act, 1961 dated 31-12-2021 for the above captioned Assessment Year was passed by the Assistant Director of Income Tax, CPC Bangalore.
0 In this regard, we would like to humbly submit before your goodself that the order us/ 143(1) of the Income Tax Act, 1961 was passed on 31-12- 2021. The concerned person who entrusted with the above-captioned matter had retired from the company and the new person who had joined in his post was not aware of the concerned order had been passed. As when he came to know about the same, the said matter was referred to a consultant and the matter was drafted and filed accordingly.
0 Therefore, we would like to humbly submit before your goodself that we are highly apologetic about the said delay and humbly request before your goodself kindly condone the same. The new employee who had joined the organisation was not aware of the said order. Under these circumstances, the appellant was unable to file the appeal within the statutory time prescribed u/s 249. I.T.A. No.: 2434/KOL/2024 Assessment Year: 2020-21 Ludlow Jute Company Limited Provident Fund.
0 It is submitted that the delay in filing of appeal is not due to the oblivion of the appellant and there has been no negligence or inaction or want of bonafide on the part of the appellant in not submitting the appeal within the stipulated time prescribed in Section 249 of the L.T. Act.
0 In this context, reference is made to the decision of the Hon’ble Madras High Court in the case of Sreenivas Charitable Trust-vs-DCIT (2006) 280 ITR 357 (Mad), The brief facts of the case are that aggrieved by the order of CIT(Appeals), the assessee preferred”
The Bench was of the view that as the assessee had sufficient cause, the delay ought to have been condoned by the Ld. Addl./Joint CIT(A). Since in the assessee’s own case for AYs 2021-22, 2022-23, 2023-24 and 2024-25, the Ld. AO has himself allowed the deduction u/s 10(25) of the Act as per the evidence filed before us, therefore, the order of the Ld. Addl/JCIT(A) is hereby set aside and the issue is remitted to the Ld. AO who shall examine the evidence filed by the assessee and also the past history of the case and grant the exemption u/s 10(25) of the Act as per law as the assessee is a provident fund whose income is exempt u/s 10(25) of the Act as per the conditions described. Hence, the grounds of appeal raised by the assessee are partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 25th August, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 25.08.2025 Bidhan (Sr. P.S.) I.T.A. No.: 2434/KOL/2024 Assessment Year: 2020-21 Ludlow Jute Company Limited Provident Fund. Copy of the order forwarded to:
Ludlow Jute Company Limited Provident Fund, 6, Little Russel Street, Kankaria Estate, Kolkata, West Bengal, 700071. 2. A.D.I.T., CPC, Bengaluru.
ADDL/JCIT(A)-13, Mumbai.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order