Rule 297 — Order of recognition.
Sub-rule (1) fixes the date from which an order according recognition to a provident fund takes effect: the first day of the month immediately following the month in which the application for recognition is received by the income-tax authority concerned, unless, at the request of the employer, the first day of any later month in the same financial year is specified.
Sub-rule (2) provides that, in accordance with sub-rule (1), if the approving authority is satisfied that there was sufficient reason for the delay in submitting the application, he may accord recognition to the fund from a date not earlier than the 1st April of the financial year in which the application is made.
Recognition of a provident fund carries consequences for both employer and employees from the date it operates, and the Act does not say what that date is. The rule supplies a default tied to the month of receipt of the application, a forward option for an employer who wants a later start within the same financial year, and a backward relaxation where the delay in applying is explained. The outer backstop of 1st April of the financial year of application keeps recognition from reaching into an earlier year.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Default effective date of the order of recognition | The first day of the month immediately following the month in which the application is received | Unless a later month in the same financial year is specified at the employer's request | Sub-rule (1) |
| Earliest date from which recognition may be accorded where the delay is excused | Not earlier than the 1st April of the financial year in which the application is made | Where the approving authority is satisfied that there was sufficient reason for the delay in submitting the application | Sub-rule (2) |
The default date is not the date of the order and not the date of the application; it is the first day of the month after the month of receipt, so an application received on any day in a month produces the same effective date. Moving the date is possible in both directions but on different footings: forward, only at the request of the employer and only to the first day of a later month in the same financial year; backward, only where the approving authority is satisfied there was sufficient reason for the delay in submitting the application, and never earlier than the 1st April of the financial year of the application. The backward relaxation is discretionary — the rule says he may accord recognition from such a date — so a satisfactory explanation does not by itself fix an earlier date.
An employer's application is received on 20 August. Recognition takes effect from 1 September unless the employer asks for a later month in the same financial year, say 1 December. If the employer explains that the application was delayed for sufficient reason, the approving authority may instead accord recognition from a date not earlier than 1 April of that financial year — it cannot reach back into the previous financial year.
An employer meets it in the order according recognition to its provident fund, which states the date from which recognition operates, and in any request made with the application for a later or an earlier date.
shall take effect from the first day of the month immediately following the month in which the application for recognition is received by the income-tax authority concerned
he may accord recognition to the fund from a date not earlier than the 1st April of the financial year in which the application is made