2019 (9) TMI 1272 - HC - Income Tax

Insurance Employees Pension Fund granted tax exemption by Tribunal despite procedural errors; emphasizes substance over technicalities.

The Tribunal confirmed the exemption for M/s. United India Insurance Company Employees Pension Fund under Section 10(25)(iii) of the Income Tax Act, 1961, ... Exemption claimed u/s 10(25)(iii) - approved superannuation fund - Approval and withdrawal of approval - the assessee is registered u/s 10(23AAA) as well as under Section 12A - HELD THAT:- Requirement of renewal of such approval granted by the concerned authority to the said Trust Fund, which is entitled to exemption under Section 10(25)(iii) of the Act. Therefore, this contention of the learned counsel for the Revenue is absolutely misplaced. There is no dispute that the assessee held this approval for the assessment period in question, viz., assessment years 2001-02 and 2003-04. The Tribunal has found that the assessee had already obtained approval under Section 10 (23AAA) of the year 1996 and registration under Section 12(A) of the Act subsequently and therefore the entire income would be exempted under Section 10(25)(iii) of the Act. The learned Tribunal, in our opinion, was justified in upholding the exemption in favour of the assessee irrespective of the fact that the provision of the law, under which exemption was quoted, was not correctly mentioned by the assessee. No justification for referring to the provisions under Section 10(23AAA) of the Act in this case. The provisions of Section 10(25)(iii) of the Act, under which the assessee claimed exemption in question, is clearly applicable to the approved superannuation fund and the assessee's Trust fund was duly approved by the competent authority in the present case. - Decided in favour of assessee. Issues:1. Dispute over exemption claimed by the assessee under Income Tax Act, 1961.2. Requirement of renewal of approval for exemption under Section 10(25)(iii) of the Act.3. Interpretation of provisions under Section 10(23AAA) in relation to exemption claimed.Analysis:1. The Revenue filed appeals against the order dismissing their appeals against the assessee, M/s. United India Insurance Company Employees Pension Fund, Chennai, regarding exemption of income from tax under the Income Tax Act, 1961. The Tribunal found that the assessee was entitled to exemption under Section 10(25)(iii) of the Act, even though no specific section was mentioned in the claim for exemption. The Tribunal held that if an assessee is eligible for any specific exemption, it should not be deprived of it due to technicalities in mentioning the correct section. The Tribunal confirmed the exemption for the assessee, leading to the dismissal of the Revenue's appeals.2. The Revenue argued that since the approval obtained by the respondent assessee Trust fund did not mention a specific provision and required renewal every three years, the assessee was not entitled to the exemption. However, the assessee contended that Rule 2 of Part-B of Schedule IV of the Act did not mandate renewal every three years. The Tribunal found no requirement for renewal of approval for the Trust Fund entitled to exemption under Section 10(25)(iii) of the Act. The Tribunal upheld the exemption for the assessee for the relevant assessment years, emphasizing that the approval obtained in 1996 remained valid.3. The coordinate Bench admitted the appeals based on substantial questions of law regarding the interpretation of provisions under Section 10(23AAA) in relation to the exemption claimed under Section 10(25)(iii) of the Act. The Tribunal clarified that the provisions of Section 10(25)(iii) applied to the approved superannuation fund, and since the assessee's Trust fund had valid approval, there was no error in granting the exemption. The Tribunal ruled in favor of the assessee, dismissing the appeals filed by the Revenue and finding no substantial question of law arising from the case.This judgment clarifies the entitlement of the assessee to exemption under Section 10(25)(iii) of the Income Tax Act, 1961, despite technicalities in mentioning specific sections and the absence of renewal requirements for the approval obtained by the Trust Fund. The Tribunal's decision emphasizes the importance of assessing eligibility for specific exemptions based on the substance of the claim rather than procedural technicalities.