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Facts
The assessee, a Trust managing a Group Gratuity Scheme, claimed exemption under Section 10(23AAA) of the Income Tax Act, 1961 for AY 2021-22. The lower authorities denied the exemption, stating that Form 10B was not filed. The assessee contended that exemption should have been claimed under Section 10(25)(iv) and that Form 10B is not required for this section.
Held
The Tribunal noted that the assessee had valid approval for claiming exemption under Section 10(25)(iv) and had received this benefit in previous assessment years. The Tribunal found that the assessee incorrectly claimed exemption under Section 10(23AAA) instead of Section 10(25)(iv).
Key Issues
Whether the assessee is entitled to exemption under Section 10(25)(iv) of the Income Tax Act, 1961, despite claiming it under the wrong section and not filing Form 10B.
Sections Cited
10, 250, 143(1), 10(25)(iv), 10(23AAA)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2023-24 is directed against the order dated 16.06.2025 of Addl/JCIT (A), Mysore passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Intimation Order dated 23.08.2024 passed u/s.143(1) of the Act.
Assessee has raised following grounds of appeal :
“1. The ADDL/JCIT(A), Mysore erred in law and on facts in confirming disallowance of exemption u/s 10 of ITA, 1961, amounting to Rs. 6,51,82,342 against the nil return of income.
Ultra Corpotech P L Employee Group Gratuity Cum Life Assurance Scheme 2. The learned ADDL/JCIT(A), Mysore erred in law and facts in denying exemption u/s 10(25)(iv) of the ITA, 1961 due to non-filing of Form 10B. The learned ADDL/JCIT(A) ought to have appreciated that filing of Form 108 is not a requirement to claim exemption u/s 10(25)(iv).
3. Appellant contends that exemption u/s section 10(25)(iv) of the ITA, 1961 should be granted for AY 2023-24, considering the provision of section 10(25) (iv) of the ITA, 1961 and registration granted by PCIT(Central), Pune.
4. Appellant craves leave to add/ alter/delete/ modify, all/ any of the above grounds of appeal.”
Brief facts of the case are that the assessee is a Trust which has set up a Group Gratuity Scheme for providing Gratuity benefits and the fund is duly approved vide order of ld.CIT-5, Pune on 20.09.2013 and further renewed by ld. PCIT(Central), Pune on 14.10.2022 effective from 23.03.2022. Income-tax return for A.Y. 2021-22 furnished on 31.12.2021 and in the said return exemption u/s.10(23AAA) of the Act at Rs.6,51,82,342/- is claimed. However, in the intimation u/s.143(1)(a) dated 23.08.2024, the said claim of the assessee has been denied and income has been calculated at Rs.6,51,82,342/-. Thereafter, assessee preferred appeal before ld.CIT(A). However, ld.CIT(A) dismissed the appeal by observing that the assessee has not filed Form 10B. Aggrieved assessee is now in appeal before this Tribunal.
Ld. Counsel for the assessee submitted that income of the assessee is exempt u/s.10(25)(iv) of the Act which provides that any income received by the trustees on behalf of an approved gratuity fund is exempt. He also submitted that there is no requirement for the assessee to furnish any Tax Report on Form 10B. He also submitted that on the basis of the intimation order there is no refund or no tax liability due is mentioned.
Ultra Corpotech P L Employee Group Gratuity Cum Life Assurance Scheme However, in the body of the order, income has been determined at Rs.6,51,82,342/-. He submitted that no demand notice is received for this calculation. Ld. Counsel for the assessee fairly accepted that assessee failed to appear before ld.CIT(A) and considering the facts of the case and that the assessee’s income is exempt u/s.10(25(iv) of the Act, matter may please be restored to the file of ld. Jurisdictional Assessing officer for necessary verification.
On the other hand, ld. Departmental Representative supported the orders of the lower authorities.
We have considered the rival contentions and perused the record placed before us. We note that the assessee a Group Gratuity Trust approved by ld.CIT vide order dated 14.10.2022 effective from 23.03.2022 and the Trust is managing the Gratuity payable to Employees of Ultra Corpotech Private Limited Employee Group Gratuity cum Life Assurance Scheme and accordingly receives amount towards contribution for Gratuity and makes the payment to LIC for Group Gratuity Scheme and it is claimed by ld. Counsel for the assessee that assessee is entitled to exemption u/s.10(25(iv) of the Act. In the past also, the funds have been approved by ld.CIT-5, Pune on 20.09.2013 effective from 24.03.2008 and further the approval has been granted from 23.03.2022 by ld. PCIT (Central), Pune. Therefore, the case of the assessee clearly falls in the provisions of section 10(25(iv) of the Act which provides that “any income received by the trustees on behalf of an approved gratuity fund” is exempt from tax.
However, on perusal of the income tax return filed by the assessee, we notice that in Part –A column A19 assessee has mentioned section 10(23AAA) of the Act as the section under which income is claimed to be exempt and registration details and the approval granted by ld.CIT-5, Pune on 20.09.2013. Due to the selection of wrong section, the alleged adjustment by CPC has been made.
Before us, ld. Counsel for the assessee fairly admitted that wrong section has been mentioned in the income tax return by claiming the exemption u/s.10(23AAA) of the Act in place of section 10(25)(iv) of the Act. For the sake of brevity, section 10(23AAA) and section 10(25)(iv) are reproduced below :
“Section 10(23AAA) : Any income received by any person on behalf of a fund established, for such purposes as may be notified by the Board in the Official Gazette, for the welfare of employees or their dependants and of which fund such employees are members if such fund fulfils the following conditions, namely :— (a) the fund— (i) applies its income or accumulates it for application, wholly and exclusively to the objects for which it is established; and (ii) invests its funds and contributions and other sums received by it in the forms or modes specified in sub- section (5) of section 11; (b) the fund is approved by the Principal Commissioner or Commissioner in accordance with the rules made in this behalf: Provided that any such approval shall at any one time have effect for such assessment year or years not exceeding three assessment years as may be specified in the order of approval;
Section 10(25)(iv) : “Any income received by the trustees on behalf of an approved gratuity fund.”
On considering the facts and circumstances of the case that the assessee was having valid approval from the authority provided under the Income Tax Act for claiming exemption u/s.10(25(iv) of the Act and also the assessee has been allowed the benefit of exemption u/s.10(25(iv) for A.Y. 2021-22 and 2022-23 and for A.Y. 2024-25, we deem it proper to remit the issue raised in the instant appeal to the file of ld. Jurisdictional Assessing Officer to verify the details to be filed by the assessee for the claim of exemption u/s.10(25)(iv) of the Act and if found correct then decide in accordance with law. Grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 18th day of September, 2025.