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Facts
The assessee, Airports Authority of India Employees Provident Fund Trust, claimed interest income of Rs. 1,14,70,598/- as exempt. The CPC disallowed this claim, leading to a tax demand. The assessee's appeal was dismissed by the CIT(A) for not substantiating the claim and failing to appear during proceedings.
Held
The Tribunal noted that the assessee is an approved Provident Fund Trust and placed on record a letter of recognition from the CIT. In view of this approval, which was not disputed by the Revenue, the interest income was held to be not taxable.
Key Issues
Whether the interest income earned by an approved Provident Fund Trust is taxable or exempt.
Sections Cited
10, 139(9), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, C: NEW DELHI
Before: SHRI VIKAS AWASTHY & SHRI BRAJESH KUMAR SINGH
This appeal by the Revenue is directed against the order dated 05.03.2025 of the Commissioner of Income Tax, Appeal, ADDL/JCIT (A), Kochi, [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the intimation u/s 143(1) of the Income ITA No.- 2992/Del/2025 Airports Authority of India Employees Provident Fund Tax Act, 1961 (hereinafter referred to as the ‘the Act’) passed by the CPC, Bengaluru on 14.03.2016.
The assessee is an approved Provident Fund Trust under Rule 3(1) of part A of the Income Tax Act, 1961 vide order no. F. No. CIT-1/150/(HQ-1)/ PF/2010- 11/505 dated 01.06.2010. The assessee had claimed a sum of Rs. 1,14,70,598/- as exempt income u/s 10 of the Act which was disallowed by the ACIT, CPC, Bengaluru, raising a tax demand of Rs. 36,00,080/-.
Aggrieved with the said order, the assessee preferred an appeal before the Ld. CIT(A).
During the appellate proceedings, the Ld. CIT(A) noted that the assessee had not substantiated its claim in response to the defective notice issued by CPC, Bangaluru, u/s 139(9) of the Act on 04.06.2015 fixing the response due date on 02.09.2015. Further, before the Ld. CIT(A), the assessee did not appear on various occasions as noted by the Ld. CIT(A) out in para number 6.2 of the appellate order and taking note of the fact that the assessee failed to substantiate the said claim for exemption held that no relief could be granted to the assessee. Accordingly, the Ld. CIT(A) dismissed the appeal of the assessee.
In the appellate proceedings before us, the assessee once again submitted that it is an approved Provident Fund Trust under Rule 3(1) of part A of the Income Tax Act, 1961, and that the interest income amounting to Rs. 1,14,70,598/- earned by the ITA No.- 2992/Del/2025 Airports Authority of India Employees Provident Fund assessee Trust was an exempt income. In this regard, the assessee placed before us, a letter issued by the then CIT, Delhi-1, New Delhi, granting the above recognition, which is reproduced as under:
“ 3 ITA No.- 2992/Del/2025 Airports Authority of India Employees Provident Fund 5.1 In view of the above approval granted to the assessee, which was not disputed by the Ld. Sr. DR, we hold that the said interest amount of Rs. 1,14,70,598/- will not be taxable. Accordingly, the addition of Rs. 1,14,70,598/- is deleted. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 10th February, 2026.