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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the employer's contribution to the Employees' Pension Scheme, 1995 paid to the Employees Provident Fund Organisation was a contribution to an approved superannuation fund so as to attract fringe benefit tax under section 115WB(1)(c) of the Income-tax Act, 1961.
Analysis: Approved superannuation fund under section 2(6) of the Income-tax Act, 1961 requires approval by the prescribed income-tax authority in accordance with Part B of the Fourth Schedule. The Employees' Pension Scheme, 1995 was framed by the Central Government under section 6A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 as a statutory scheme for covered establishments. The contributions in question were made under that statutory scheme and were not shown to be contributions to a superannuation fund approved under the Income-tax Act. CBDT Circular No. 8/2005 also clarifies that contributions to approved provident fund or gratuity fund do not attract FBT.
Conclusion: The contribution was not a taxable fringe benefit under section 115WB(1)(c), and the addition made by the Assessing Officer was unsustainable.
Final Conclusion: The Revenue's challenge failed, and the deletion of the addition was upheld.
Ratio Decidendi: A statutory employer contribution made under the Employees' Pension Scheme, 1995 is not, by itself, a contribution to an approved superannuation fund under section 2(6) of the Income-tax Act, 1961 and therefore does not attract fringe benefit tax under section 115WB(1)(c).
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