The Commissioner Of Income-Tax, Tamil Nadu-Viii, Madras v. United India Insurance Company Employees Pension Fund

IN THE HIGH COURT OF JUDICATURE AT MADRASDated: 19.09.2019 The Commissioner of Income-tax,Tamil Nadu-VIII, Madras. ... Appellant in both appealsvs. United India Insurance CompanyEmployees Pension FundNo.2A Whites Road, Royapettah,Chennai-14 .. Respondent in both appeals(PAN. ) Tax Case Appeals filed under Section 260A of the Income TaxAct, 1961 against the order of the Income-Tax Appellate Tribunal'C' Bench, Chennai, dated 28.08.2009, in I.T.A.No.768/Mds/2009and I.T.A.No.769/Mds/2009, respectively against the order dated19.02.2009 and made in I.T.A.No.167 & 168/2008-2009 on the fileof the Commissioner of Income Tax (Appeals)IX, Chennai andagainst the order dated 30.12.2008 and made in PAN. No.AATU0145Q respectively on the file of Income Tax Officer, WardIX(2) Chennai 6. For Appellant : M/s.S.Premalatha for Standing counsel Mr.G.M.Swaminathan in both appeals For Respondent: M/s.Pushya Sitaraman,Sr.Counsel for Ms.J.Sreevidhya in both appeals The Revenue has filed these appeals under Section 260-A ofthe Income Tax Act, 1961, aggrieved by the order dated28.08.2009, dismissing the Revenue's appeals against theassessee M/s.United India Insurance Company Employees PensionFund, Chennai. The relevant portion of the order of the learnedTribunal is quoted below for ready reference: https://hcservices.ecourts.gov.in/hcservices/ "5. Now the Revenue has disputed this findingof the ld.CIT(A). The main crux of thearguments as advanced by the ld.CIT(DR) isthat the assessee has not claimed exemption ofits entire income from tax under any specificsection of the Act. The other argument of theDepartment is that the assessee trust hassought registration under Section 12A despitehaving obtained approval of the requiredauthority under Part-B of Schedule IV of theAct, which was obtained way back in the year1996. The objection of the ld.CIT(DR) is thatu/s.10(23AAA) renewal of approval once inthree years is required to be obtained, whichhas not been done, hence no exemption iseligible to the assessee-trust. 6.After hearing the rival versions, it wasfound for a fact that the assessee has alreadyobtained approval u/s 10(23AAA) as back as in1996. the assessee was also registered u/s12A of the Act, subsequently. Now the mootquestion arises for our adjudication is if theassessee is registered u/s 10(23AAA) as wellas under Section 12A of the Act, but itsentire income is not taxable u/s 10(25)(iii),according to which entire income received bythe trustee on behalf of an approvedSuperannuation Fund is exempt, would thefactum of such registration throw theassessee-trust out of the legislative benefit.According to us, it is not correct propositionand construction of law. If an assessee iseligible for any specific exemption, even ifit has not mentioned any specific Section orhas mentioned a wrong section, it would notdebar it from the benefit of a specificexemption. Rather, it is the duty of theAssessing Officer to apply correct provisionsof the law. It is found that in so far as thefacts of the case are concerned, there is nodispute at all. In our opinion also, theassessee is entitled to the exemption u/s 10(25)(iii) of the Act. Hence, we confirm theimpugned finding of the ld.CIT(A) and cannotallow these appeals of the Revenue. 7.In the result, both the appeals of theRevenue are dismissed. 8.The order pronounced in the open Court on 28.08.09." 2. The learned counsel for the Revenue urged before usthat since no specific provision, under which the approval wasobtained in respect of the respondent assessee Trust fund, wasmentioned at the time of filing of the return and the approvalgranted under Part-B of Schedule-IV of the Act requires renewalafter three years and since the said approval was not renewed,the assessee was not entitled to the exemption. 7.In the result, both the appeals of theRevenue are dismissed. 8.The order pronounced in the open Court on 28.08.09." 2. The learned counsel for the Revenue urged before usthat since no specific provision, under which the approval wasobtained in respect of the respondent assessee Trust fund, wasmentioned at the time of filing of the return and the approvalgranted under Part-B of Schedule-IV of the Act requires renewalafter three years and since the said approval was not renewed,the assessee was not entitled to the exemption. 3. The learned for the assessee, however, submittedthat Rule 2 of part-B of Schedule IV of the Act does not requireany such renewal every three years and since the said Trust Fundof the respondent assessee was duly approved under Part-BSchedule-IV of the Act, the exemption claimed by the assesseeunder Section 10(25)(iii) of the Act could not have been deniedby the respondent Revenue authorities. 4. The appeals were admitted on the followingSubstantial Questions of Law by the coordinate Bench of thisCourt, on 14.06.2010, and the said questions are quoted below:T.C.A.No.442 of 2010: "(i)Whether on the facts and in thecircumstances of the case the Income TaxAppellate Tribunal was right in law inholding that the assessee is entitled toexemption under Section 10(25(iii)) of theIncome Tax Act 1961 to the tune ofRs.29,73,80,620/- is valid? (ii)Whether on the facts and in thecircumstances of the case, the Income-taxAppellate Tribunal was right in law inholding that the assessee is entitled toexemption under Section 10(25)(iii) of theIncome Tax Act, 1961, even though theassessee claim for exemption under Section 10(23AAB) of the Act cannot be acceded becausethe provision came into effect from01.04.1997 only and whereas the assessee wasgranted original approval by the Commissionerof Income-Tax in 1996 itself? (iii)Whether on the facts and in thecircumstances of the case, the Income-taxAppellate Tribunal was right in law ingranting exemption under Section 10(25(iii))of the Income-tax Act, 1961, even though theassessee should have followed the procedurelaid down in Section 10(23AAA) of the Income-tax Act, 1961 to get exemption?" T.C.A.No.443 of 2010: "(i)Whether on the facts and in thecircumstances of the case the Income TaxAppellate Tribunal was right in law in holdingthat the assessee is entitled to exemption underSection 10(25(iii)) of the Income Tax Act 1961 tothe tune of Rs.34,61,51,010/- is valid? (ii)Whether on the facts and in thecircumstances of the case, the Income-taxAppellate Tribunal was right in law in holdingthat the assessee is entitled to exemption underSection 10(25)(iii) of the Income Tax Act, 1961,even though the assessee claim for exemptionunder Section 10(23AAB) of the Act cannot beacceded because the provision came into effectfrom 01.04.1997 only and whereas the assessee wasgranted original approval by the Commissioner ofIncome-Tax in 1996 itself? (iii)Whether on the facts and in thecircumstances of the case, the Income-taxAppellate Tribunal was right in law in grantingexemption under Section 10(25(iii)) of theIncome-tax Act, 1961, even though the assesseeshould have followed the procedure laid down inSection 10(23AAA) of the Income-tax Act, 1961 toget exemption?" 5.We have heard the learned counsel for the parties. 6.The said Ruling 2 of Part-B of Schedule IV of theAct is quoted below for ready reference: (iii)Whether on the facts and in thecircumstances of the case, the Income-taxAppellate Tribunal was right in law in grantingexemption under Section 10(25(iii)) of theIncome-tax Act, 1961, even though the assesseeshould have followed the procedure laid down inSection 10(23AAA) of the Income-tax Act, 1961 toget exemption?" 5.We have heard the learned counsel for the parties. 6.The said Ruling 2 of Part-B of Schedule IV of theAct is quoted below for ready reference: "Approval and withdrawal of approval2(1) The Principal Chief Commissioner orChief Commissioner or superannuation fund or anypart of a superannuation fund which, in hisopinion, complies with the requirements of rule33, and may at any time withdraw such approval,if, in his opinion, the circumstances of the fundor part cease to warrant the continuance of theapproval.(2)The Principal Chief Commissioner or ChiefCommissioner or Principal Commissioner orCommissioner shall communicate in writing to thetrustees of the fund the grant of approval withthe date on which the approval is to take effect,and, where the approval is granted subject toconditions, those conditions. (3)The Principal Chief Commissioner or ChiefCommissioner or Principal Commissioner orCommissioner shall neither refuse nor withdrawapproval to any superannuation fund or any partof a superannuation fund unless he has given thetrustees of that fund a reasonable opportunity ofbeing heard in the matter. 7. We do not find any such requirement of renewal ofsuch approval granted by the concerned authority to the saidTrust Fund, which is entitled to exemption under Section 10(25)(iii) of the Act. Therefore, this contention of the learnedcounsel for the Revenue is absolutely misplaced. There is nodispute that the assessee held this approval for the assessmentperiod in question, viz., assessment years 2001-02 and 2003-04.The Tribunal has found that the assessee had already obtainedapproval under Section 10 (23AAA) of the year 1996 andregistration under Section 12(A) of the Act subsequently andtherefore the entire income would be exempted under Section 10(25)(iii) of the Act. The learned Tribunal, in our opinion, wasjustified in upholding the exemption in favour of the assesseeirrespective of the fact that the provision of the law, underwhich exemption was quoted, was not correctly mentioned by theassessee. 8. We do not find any justification for referring to theprovisions under Section 10(23AAA) of the Act in this case. Theprovisions of Section 10(25)(iii) of the Act, under which theassessee claimed exemption in question, is clearly applicable tothe approved superannuation fund and the assessee's Trust fundwas duly approved by the competent authority in the presentcase. Therefore, we do not find any error in the order passedby the learned Tribunal or any Substantial Question of Law to bearising in the present appeals filed by the Revenue. 9. In view of the aforesaid discussion, we answer theSubstantial Questions of Law in favour of the assessee and asagainst the Revenue. Accordingly, the appeals are liable to bedismissed and the same are dismissed. No costs. To 1.The Income-Tax Appellate Tribunal 'C' Bench, Chennai.Chennai. 2.The Commissioner of Income TaxTamil Nadu VIII, ChennaiTamil Nadu VIII, Chennai 3.The Commissioner of Income Tax (Appeals)IXChennaiChennai 4.The Income Tax Officer Ward IX(2), Chennai +1 CC to M/s.J. Sreevidya, Advocate sr 87410.+1 CC to M/s. S.Premalatha, Advocate sr 81315. T.C.A.Nos.442 and 443 of2010VD(CO)SP(06/11/2019)