Section 10(23AAA) of the Income-tax Act, 1961, read with Rule 16C(5) of the Income-tax Rules

IT : Where commissioner had wrongly interpreted rule 16C and held that employer could not made any payment for corpus of employees welfare fund, order of Commissioner to reject registration under section 10(23AAA) was to be set aside

■■■

[2015] 55 taxmann.com 184 (Gujarat)

HIGH COURT OF GUJARAT

KPT Employees Welfare Trust

v.

Commissioner of Income-tax, Rajkot-I*

K.S. JHAVERI AND K.J. THAKER, JJ.

SPECIAL CIVIL APPLICATION NO. 12659 OF 2014

DECEMBER  22, 2014

Section 10(23AAA) of the Income-tax Act, 1961, read with Rule 16C(5) of the Income-tax Rules, 1962 - Employees' welfare fund, exemption to (Employer's contribution) - Assessee-trust was constituted for benefit of employees of a port trust - It filed application for registration under section 10(23AAA) - Commissioner invoked rule 16C of rules and rejected said application holding that employer could not made any payment for corpus and, therefore, one of conditions laid down in section 10(23AAA) was not fulfilled - Whether since as per CBDT guideline, employer contribution in corpus was acceptable, impugned order passed by Commissioner was to be quashed and set aside - Held, yes [Para 13] [In favour of assessee]

Circulars and Notifications : Notification Nos. 9830 SO 672(E), dated 27-7-1995 and 33/11, dated 3-6-2011