1. An establishment has less than 10 employees; one of the employees quits his employment after serving for a period of 7 years. Will he be entitled to receive gratuity? 

No. The employee is not entitled to receive gratuity under the Payment of Gratuity Act, as the establishment is not covered under the Act. The Payment of Gratuity Act is applicable only to shops and establishments in which 10 or more persons are employed or were employed on any day of the preceding twelve months. 

2. Whether the Payment of Gratuity Act is applicable to educational institution?

Yes. An educational institute will be covered under the Payment of Gratuity Act. The Act has been amended with effect from 3.4.1997 to cover the educational institutes. [Shri GurudevAyurvedMahavidyala Gurukul Ashram Vs Madhav 1994 LLR 894 Bom HC] 

Read more: FAQs under Payment of Gratuity Act

Issue: - Provisions of Sec 40(a)(ia) and it’s retrospective application 

CIT vs Calcutta Export Compan ¹ - Supreme Court 

Facts: - Assessee is a partnership firm and claimed export commission charges on which TDS was deducted but paid the same after the end of previous year 2004-05i.e. beyond the time limit mentioned in sec 201(1) of the Act. 

The AO has disallowed the export commission as TDS should have paid before the end of the previous year 2004-05 as per the provisions of Sec 40(a)(ia) as stood then. 

Assessee has filed an appeal against order of AO and CIT(A) has allowed appeal as result the export commission was allowed as deduction. 

Revenue filed appeal against order of CIT(A) before Tribunal, which was dismissed. Revenue further appealed before High Court. The honorable High Court dismissed appeal. Finally, an appeal was filed before the honorable Supreme Court. 

Read more: Important Recent Judgments

Key Topics Covered:

• GST
• INTERNATIONAL TAXATION

This article is contributed by Partners of SBS and Company LLP - Chartered Accountant Company. You can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

Key Topics Covered:

• DIRECT TAX
• INTERNATIONAL TAXATION
• SEBI

This article is contributed by Partners of SBS and Company LLP - Chartered Accountant Company. You can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.