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of <h1>EPF contribution adjustment deleted when no prior 80C deduction claimed under Rule 9 Fourth Schedule</h1> <h3>Shri Sahil Jain Versus ITO Ward- 7 (1), Ludhiana.</h3> Shri Sahil Jain Versus ITO Ward- 7 (1), Ludhiana. - TMI The ITAT Chandigarh, in appeal for AY 2017-18, addressed the rectification order under section 154 passed by CPC adjusting Rs. 8.27 Lacs related to EPF withdrawal. The assessee had withdrawn Rs. 8,34,372 comprising employees' contribution (Rs. 6,69,000), employer's contribution, and respective interest components. Since the qualifying period of 5 years was not met, the withdrawal was taxable. The interest amounts and employer's contribution were undisputedly taxable and correctly adjusted. The primary dispute concerned the employees' contribution of Rs. 6.69 Lacs. The assessee contended that these contributions were made in earlier years without claiming deduction under section 80C. As per Rule 9 of Part A of the Fourth Schedule, if no deduction under section 80C was claimed previously, the income tax is to be computed by adding the contribution to the respective earlier years, effectively disallowing the deduction retrospectively. Since the assessee never claimed such deduction, the adjustment on this amount was unjustified. The Tribunal held: 'Since the assessee never claimed the deduction u/s 80C on these contributions, the adjustment to that extent deserves to be deleted.' Consequently, the adjustment of Rs. 6.69 Lacs was deleted, and the AO was directed to recompute income accordingly. The appeal was partly allowed.
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