Statutory provident fund recognition is unnecessary for deduction when the fund is created under a valid statutory scheme.

A provident fund established under a statutory scheme framed under the Employees' Provident Funds Act, 1952 did not require separate recognition under Part A of the Fourth Schedule to the Income-tax Act, 1961 or rule 75 of the Income-tax Rules for deduction under section 40A(5). The statutory origin of the fund was treated as sufficient, so the Commissioner's further recognition under the Income-tax framework was unnecessary where the scheme's legal requirements were otherwise met. The issue was answered in favour of the assessee and against the Revenue.

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Issues: Whether contributions made to a provident fund established under a statutory scheme framed under the Employees' Provident Funds Act, 1952 require further recognition under Part A of the Fourth Schedule of the Income-tax Act, 1961 and rule 75 of the Income-tax Rules for allowance of deduction under section 40A(5) of the Income-tax Act, 1961.

Analysis: The provident fund in question was established under a statutory scheme. Since the fund already had its origin in a statute, the Tribunal held that no further recognition by the Commissioner under the Income-tax Act was necessary for the purpose of deduction. The statutory character of the scheme removed the need to treat the fund as requiring separate recognition under the relevant provisions of the Income-tax Act and the Income-tax Rules.

Conclusion: Further recognition under the Income-tax Act was not required, and the question was answered in the affirmative, in favour of the assessee and against the Revenue.

Ratio Decidendi: Where a provident fund is created under a statutory scheme, separate recognition under the Income-tax Act is unnecessary for allowing deduction if the statutory requirements are otherwise satisfied.

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