Jovees’ Trovidenc cf abou. Head C Suniec:: = While processing the proposais for exemption under Section 17 of he Act or pare 27.4.7 Me-schemes nas been novea with concern by this office as well as by the Ministry that in severat cases relaxations were issued years 300 while the nroposals =re fonvarded for notifications after extreme delay, AS = result @ number of relaxed establishments function virtually as ex pies establishments Tor ycars together without any notification of exemption udder Section 17. z 2am 22 of ne Scheme contemptates -ctaxation ‘penoing she disposal of the application for exemption’ only. The operation of para 79 is Deretore-:neant (3 be-vemporary at best co as to provide :or only © 1eesecabie periog'of tire taken tor processing cf tne anntication leaaine to notification. 3. The provisions of para 79 for relaxation have to be read with para 79-8 which states that the Central Board shall furnish its views on exemption to the appropriate Government within @ period of thiee months from the date on which such proposai is receivec by it. Thus , if grant of relaxation on receipt of application for exemption is not followed by recommendations cf the CentralBoard to the appropriate government within three months the same amounts to a violation of para 79-8 of the Scheme. 4 Further, the amendment brought in by Clause 56, Finance Act, 2006 has necessitated grant of exemption under Section 17 to establishments desirous of obtaining/retaining Income Tax recognitions in respect of their private provident funds. Thus, grant of final exemption as opposed to relaxation gets emphasized by the said amendment. The gap of several years, even decades between grant of relgsation and. exemption by appoopriate Goverment is violative of the prowstens-of para-79B-of the Scheme as well as-of the spirit behind: parg:79-ofF the Scheme. Such delay has even led to relaxation being treated as de-facto Guerantion. Again, in many cases; during ihtetong delay the-establishment:staxts: defaulting with its Trust Rules as well as the Act provisions and the safety of tte: contributions of the workers is seriously compromised. In several cases the establishments close dawn or undergo. liquidation process exposing their PF ‘Thasts’ and the- workers’ montes: to serious risks and industrial relations. complications. & In Wew of the-aleve, (he-follewing instructions are laid down for strict compliance ~ >. Eimenption. pcoposais..in respect of: att suche establishments: thmt= are renetvedttit?15:1.2009-shetl-be-forwardedby-the concemed RPFEIDIC TO. this office with appropriate recommendations in accordance with the existing guidelines latest by 31.1.2009 with an explanation for not forwarding the exemption proposals in accordance with the deadiines fixed through several earlier letters of this office on this subject.v g 8 PRNAMEe PE In all other cases too where exemption has been applied for, the RPFC/OIC shall expeditiously process and forward the proposals to this office within 15 days of their receipt with appropriate recommendations. In case any exemption proposal received on 15.1.2009 or earlier is not forwarded to this office by 31.1.2009 for any reason, the RPFC/OIC of the concemed SRO as well as the RPFC in charge of the concemed region shall be held personally accountable for violation of instructions of this Office, (This issues with CPFC’s approval.) Your} faithful, PS toCPRe FA CAEL All Addl. CPFCs (Zones/Head Office) All Zonal Audit Offices Director (1S) - with a request to webcast the above circular. PFC (NOCYRAFC_(N&PO) , Al Offiters of Hess Ottice ‘Guard File. G ) Regional P.F. Cammissioner-I1 (Exemption)