Recognised provident fund exemption applies to EPF scheme funds without separate income-tax recognition.

A provident fund established under a scheme framed under the Employees' Provident Fund Act, 1952 falls within the inclusive definition of "recognised provident fund" in section 2(38) of the Income-tax Act, so separate recognition by the Chief CIT or CIT is not a condition precedent. On that basis, income received by trustees on behalf of such a fund is exempt under section 10(25), and the addition was deleted.

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Issues: Whether a provident fund established under a scheme framed under the Employees' Provident Fund Act, 1952 is a "recognised provident fund" for the purposes of exemption under section 10(25) of the Income-tax Act, 1961, even without separate recognition by the Chief CIT or CIT under section 2(38).

Analysis: Section 2(38) contains an inclusive definition of "recognised provident fund". The first limb covers funds recognised by the Chief CIT or CIT in accordance with Part A of the Fourth Schedule, while the second limb separately includes a provident fund established under a scheme framed under the Employees' Provident Fund Act, 1952. The statutory language shows that separate recognition by the income-tax authorities is not a condition precedent for funds falling within the second limb. Once the fund is established under the Employees' Provident Fund Act scheme, income received by trustees on its behalf falls within the exemption contemplated by section 10(25).

Conclusion: The provident fund of the assessee was a recognised provident fund within section 2(38) and its income was exempt under section 10(25); the addition was rightly deleted.

Ratio Decidendi: A provident fund established under a scheme framed under the Employees' Provident Fund Act, 1952 is a recognised provident fund by virtue of the inclusive definition in section 2(38) of the Income-tax Act, 1961, and no separate recognition by the Chief CIT or CIT is required for exemption under section 10(25).

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