BALMER LAWRIE & CO. LTD. STAFF PROVIDENT FUND,KOLKATA vs. ITO, WARD - 34(1), , KOLKATA

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ITA 2464/KOL/2024Status: DisposedITAT Kolkata21 April 2025AY 2018-19Bench: SHRI RAJESH KUMAR (Accountant Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Income Tax Appellate Tribunal held that the assessee's income is entirely exempt due to its registration as a Provident Fund trust. It found that the misreporting of dividend income was a factual mistake, and the disallowance by the AO and affirmation by the CIT(A) were incorrect and contrary to the Act. The Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

What were the facts?

The assessee, Balmer Lawrie & Co. Ltd. Staff Provident Fund trust, is tax-exempt. For AY 2018-19, it mistakenly reported dividend income of ₹10 lacs under Section 10(35) instead of the exempt Section 10(25). The AO (CPC) disallowed this amount under Section 115BBDA and levied tax under Section 143(1), an order affirmed by the CIT(A) based on an incorrect finding regarding non-payment of employee contributions.

What were the issues?

Whether dividend income received by a tax-exempt Staff Provident Fund trust, mistakenly reported under Section 10(35) instead of Section 10(25), can be disallowed by invoking Section 115BBDA of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 10(25),Section 10(35),Section 115BBDA,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM Shri AkkalDudhewala, AR

For Appellant: Shri AkkalDudhewala, AR
For Respondent: Shri Madhumita Das, DR
Hearing: 16.04.2025Pronounced: 21.04.2025

(Assessment Year:2018-19) Balmer Lawrie & Co. Ltd. Staff ITO, Ward - 34(1), Provident Fund Aaykar Bhawan, 110, Bammer Lawrie House, 21, N.S. Shantipally, EM Bypass, Kolkata, Vs. Road, BBD Bag, Kolkata, West Bengal, 700107 West Bengal, 700001 (Appellant) (Respondent) PAN No. AAATB8655N Assessee by : Shri AkkalDudhewala, AR Revenue by : Shri Madhumita Das, DR Date of hearing: 16.04.2025 Date of pronouncement : 21.04.2025 O R D E R Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 09.11.2022 for the AY 2018-19.

2.

The only issue raised by the assessee is against the confirmation of addition of ₹10 lacs by the ld. CIT (A) as made by the ld. AO (CPC) Bangalore by disallowing ₹ 10 lacs out of the dividend received of ₹21,83,402/- by invoking provisions of Section 115BBDA of Income-tax Act, 1961 (the Act) .

3.

The facts in brief are that the assessee is a Staff provident Fund trust and is duly registered with the Chief Commissioner of Income Tax, Kolkata vide order dated M. No. Itotech/BLS/PF/2007-08/85 dated 31st January, 2008. Therefore, the income of the assessee is fully exempt from tax. The assessee filed the return of income, however, while filing the return of income, the income from dividend was wrongly reported u/s 10(35) of the Act. The ld. AO (CPC) while processing the return disallowed the dividend to the tune of ₹10 lacs which was reported u/s 10(35) instead of 10(25) of the

4.

In the appellate proceeding, the ld. CIT (A) affirmed the said order by totally mis-understanding and mis-construing the facts by recording wrong finding in the appellate order that there was a failure on the part of the assessee to pay the employees contribution to PF and ESI within the prescribed time under the respective Acts.

5.

After hearing the rival contentions and perusing the materials available on record, I find that the assessee is a Staff provident fund trust, which is duly registered with Chief Commissioner of Income Tax, Kolkata-1 and copy of the same was extracted below:-

7.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 21.04.2025.

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