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Assessee has raised the groundthat the order passed U/s 263 is not sustainable being change of opinion and passed without application of mind since, the appellant has formed a trust on 29.01.1999 to look after independently the Gratuity Fund of all the employees and made a Group Gratuity Scheme through Life Insurance Corporation of India. Every year whatever sum of premium calculated by LIC at the beginning of the year considering present employees and their current emoluments, the appellant deposited the amount in Group Gratuity Scheme and consider it in the Profit & Loss account for the relevant year and the employees left are being paid gratuity by the Trust having no impact in the Profit & Loss Account. Hence, the same may kindly be allowed in the interest of justice.

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Sec. 263 of Income Tax Act, 1961— Revision — Payment made to LIC of India is not a provision but it is actual expenditure claimed under the gratuity contribution, which needs to be allowed as deduction, therefore, the order passed by the AO u/s.143(3) was not erroneous and prejudicial to the interest of Revenue, thus, Pr.CIT is not justified in directing the AO to disallow the payment made to gratuity fund u/s.40A(7), hence, the order passed by the Pr.CIT u/s.263 of the Act is hereby quashed. - ORICLEAN PRIVATE LIMITED V/s PR. CIT - [2020] 28 ITCD Online 027 (ITAT-CUTTACK)