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Facts
The assessee's return was processed under Section 143(1), with an addition of Rs.1,99,992/- for delayed payment of employees' contribution to the Superannuation Fund under Section 36(1)(va). The CIT(A) deleted the disallowance for National Pension Scheme contributions but directed the Assessing Officer to verify the approval status of the Superannuation Fund for the remaining disallowance.
Held
The Tribunal affirmed the CIT(A)'s decision, holding that if the Superannuation Fund is found to be approved and the payment was made before the due date of filing the return under Section 139(1), the disallowance should be deleted. The appeal was allowed for statistical purposes, remanding the matter to the AO for verification of the fund's approval.
Key Issues
Whether employees' contribution to a Superannuation Fund, paid after the scheme's due date but before the income tax return filing due date under Section 139(1), qualifies for deduction, contingent on the fund's approval status.
Sections Cited
250, 36(1)(va), 143(1), 139(1)
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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-SHRI T.R. SENTHIL KUMAR
PER DR. B.R.R. KUMAR, VICE-PRESIDENT :
This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income-tax (Appeals), ADDL/JCIT(A)-6, Delhi (hereinafter referred to as "CIT(A)" for short) dated 20.01.2025 passed under Section 250 of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for Assessment Year (AY) 2020-21.
The ground of appeal raised by the Assessee is as follows:-
In law and in the facts and circumstances of the case of appellant, the Ld. CIT(A) has erred in not deleting addition of Rs.1,99,992/- on account of payment of Employees' Contribution to Superannuation fund u/s 36(i) (va) of the Act.
3. The brief facts of the case are that the assessee filed its return of income for the year under consideration on 27.01.2021 declaring total income of Rs.30,59,51,250/-. The return was subsequently processed u/s 143(1) of the Act at an income of Rs.30,72,55,070/- by making an addition of Rs.13,03,820/-, by invoking the provisions of Section 36(1)(va) of the Act. The addition was made on the following accounts:-
(a) Disallowance of Rs.11,03,830/- related to employee’s contribution to the National Pension Scheme, and (b) Disallowance of Rs.1,99,992/- on account of employees’ contribution to the superannuation fund.
3.1 Aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the Ld. CIT(A) who deleted the disallowance of Rs.11,03,830/- pertaining to the employees’ contribution to the National Pension Scheme; however, in respect of the disallowance of Rs.1,99,992/- relating to the Employees’ Superannuation Fund, the Ld. CIT(A) directed the Assessing Officer to verify the nature and status of the fund before granting the deduction. His observations in this regard are as follows :-
“The appellant, as part of its obligations, contributed Rs. 1,99,992/- towards the Employees' Superannuation Fund for its employees. This amount was paid after the due date specified under the respective scheme but before the due date of filing the income tax return under Section 139(1) of the Income Tax Act, 1961. The payment details were duly disclosed in the Tax Audit Report filed with the return of income.
The Centralized Processing Center (CPC), while processing the return under Section 143(1), disallowed the contribution by invoking Section 36(1 )(va) of the Act, treating the payment as delayed. The CPC considered this amount as not allowable for deduction as per the provisions relating to employees' contributions to specified funds.
During appellate proceedings the appellant argued that the contribution to the Employees' Superannuation Fund was voluntary and not mandatory. It further contended that the payment was made well before the due date of filing the return of income under Section 139(1). The appellant relied on judicial precedents where it was held that payments made before the due date of filing the return were allowable, regardless of the specific due date under the respective scheme. The appellant also contended that there is no due date prescribed as to when the payment is required to be made to the superannuation fund. Hence, the impugned adjustment made by AO- CPC is not justified as there is no due date prescribed in the respective Act and the payment has been duly made before filing of the Return of Income as per section 139(1) of the Act, for the year under consideration. The appellant has also relied upon decision U/S 250 on similar ground in case of its sister concern M/S Adani Township & Real Estate Company P Ltd for AY 2019-20.
I have perused the facts of the case and submissions made by the appellant. In this regard, it is pertinent to mention here that as per the provisions of the Income Tax Act, for a contribution to the Employees' Superannuation Fund to qualify for deduction, the fund must be an "approved Superannuation Fund". However, the details regarding whether the fund in question was an "approved" fund were not available on records.
Verification of whether the fund in question is approved is a critical factor in determining the eligibility for deduction. Therefore, the Assessing Officer (AO) is directed to verify the status of the fund. If the fund is found to be approved, the disallowance of Rs. 1,99,992/- should be deleted. It is also clarified that if the payment was made before the due date of filing the return under Section 139(1), it should be allowed, subject to the fund's approval status. This ground of appeal is allowed for statistical purposes.”
3.2 Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.
We have heard the rival contentions and perused the material available on record. The primary issue in dispute is whether the contribution made by the assessee to the Employees’ Superannuation Fund qualifies for deduction, having been paid after the due date prescribed under the scheme but before the due date under Section 139(1).
We find from the record that the assessee had made the payment of Rs.1,99,992/- towards employees’ contribution to the Superannuation Fund before the due date for filing the return of income u/s 139(1). The fact of such payment and its timing is not disputed. The Ld. CIT(A) has rightly noted that the critical requirement for allowing the deduction is whether the Superannuation Fund is an “approved” fund under the provisions of the Act.
It is settled law, including by several decisions of various High Courts, that where employees’ contributions are deposited before the due date of filing the return under section 139(1), such payments are allowable as deduction, provided the underlying fund is duly approved. In the instant case, the Ld. CIT(A) has already issued directions to the Assessing Officer to verify the approval status of the Superannuation Fund and allow the claim accordingly. We, therefore, find no infirmity in the order of the Ld. CIT(A) and the directions given by the Ld. CIT(A) are fair and reasonable.
In the result, the appeal of the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 26.06.2025