TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 10
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....e proceedings initiated & order passed by commissioner of Income Tax (LTU), Mumbai u/s 263 is unwarranted & needs to be quashed. The Ld. Commissioner of Income Tax, LTU, Mumbai erred in giving direction to disallow Rs. 273.60 lacs u/s 43B being provision made for liability on account of pension scheme. " 2. The assessment was completed u/s 143(3) on 16.12.2010 whereby, the Assessing Officer assessed the total income of the assessee at Rs. 490.59 crores. Subsequently, on perusal of records, the Commissioner found that the assessee has charged a sum of Rs. 273.60 lacs to P&L account, being the liability towards Pension Scheme whereas the tax audit report does not indicate whether the same was actually paid or not before due date of filing....
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....r with the Asian Paints Ltd. direction to modify the order by disallowing the provision of Rs. 273.60 lacs u/s 43B. 3. Before us, the Ld. Authorized Representative of the assessee has submitted that the assessee provided Rs. 273.60 lacs as liability for the pension scheme as per the accounting standards (AS 15) and, therefore, the liability was ascertained on the basis of actuarial valuation report. He has further submitted that the assessee made the necessary disclosure and furnished all the requisite details before the Assessing Officer including the note to return of income as item no. 12, Schedule -M of audited balance sheet and profit & loss account and tax audit report which shows that the assessee has made all these provisions based....
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....he Assessing Officer has conducted any enquiry on the issue . The assessment order is completely silent on the issue of liability of provision made by the assessee on account of pension scheme, therefore, the assessment order passed by the Assessing Officer is erroneous for want of application of mind and lack of enquiry on the part of Assessing Officer. 5. We have heard the Ld. AR as well as Ld. DR and considered the relevant material on record. On careful perusal of the assessment order passed u/s 143(3) on 16.12.2010, we find that the Assessing Officer has not discussed anything about the claim of Rs. 273.60 lacs provided in the Books of Accounts as liability towards pension scheme. We are conscious that if the Assessing Officer has rai....
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....renders the assessment order erroneous so far as prejudicial to the interest of revenue as held by the Hon'ble Supreme Court in the case of Malabar Ind. Co. Ltd. Vs. CIT (supra). Thus we are of the view that the Commissioner was justified in invoking the provisions of section 263 as there was a lack of enquiry and non application of mind on the part of the Assessing Officer while framing the assessment u/s 143(3) dated 16.12.2010. However, when the assessee in the revision proceedings has brought to the notice of Commissioner that the said claim is an allowable claim being ascertained liability based on actuarial valuation report and as per Accounting Standard 15 then the Commissioner was supposed to examine the claim on its own or ough....
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....dding this clause, the Legislature made it clear that any such provision for leave encashment would ipso facto not be eligible for deduction unless the actual payment is made. For disqualifying a provision for leave encashment, a specific clause had to be inserted by the Legislature as the Legislature was conscious of the fact that this clause would not be covered by the existing clause (b) of section 43B of the Act. 8. We are in agreement with the view of the Commissioner of Income-tax (Appeals) that the pension scheme of the assessee does not envisage any regular contribution to any fund or trust or any other entity. The pension scheme provides that pension would be paid by the appellant to its employees on their attaining the retiremen....