GINZA INDUSTRIES LIMITED,MUMBAI V. DCIT, CIRCLE -5(1), KOLKATA

ITA 364/KOL/2024

AI Insights

Ginza Industries Ltd. appealed against the order of the Ld. Commissioner of Income Tax (Appeals) concerning the assessment year 2018-19. The primary issues were the addition of Rs. 90,24,952 for PF & ESI contributions and a penalty of Rs. 37,963 for violations of law. The Tribunal found merit in the appellant's arguments regarding the timing of the PF payments, which were made on the next working day after a public holiday, and acknowledged a typographical error in the penalty assessment. Consequently, the Tribunal modified the CIT(A)'s order, allowing the deduction for the PF contributions and removing the penalty.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 36018 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 21-02-2024
• Other Referred Cases: M/s G.D. Foods and Manufacturing (India) Pvt. Ltd. vs. Assistant Director of Income Tax Central Circle- 26, New Delhi
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Rectification of order
• Section: 143(1)

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “सी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 364/Kol/2024 Assessment Year: 2018-19 Ginza Industries Ltd. (PAN: AABCG 0675 P) Vs. DCIT, Circle-5(1), Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 24.09.2024 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 09.10.2024 For the Appellant/ Ǔनधा[ǐरती कȧ ओर से Shri Jay Bhansali, A.R For the Respondent/ राजèव कȧ ओर से Smt. Ranu Biswas, Addl. CIT, Sr. DR ORDER / आदेश Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)- Addl./JCIT(A)-2, Lucknow (hereinafter referred to as the “Ld. CIT(A)”] dated 28.12.2023 for the AY 2018-19. 2. Issue raised in ground no. 1 is against the confirmation of addition of Rs. 90,24,952/- by the Ld. CIT(A) as made by the AO, CPC, Bangalore on account of PF & ESI in the order passed u/s 143(1) of the Act. 2 I.T.A. No.364/Kol/2024 Assessment Year: 2018-19 Ginza Industries Ltd. 3. Facts in brief are that the assessee filed return of income on 17.10.2018 which was processed u/s 143(1) of the Act vide order dated 12.11.2019. In the said order, the two additions were made ,one on account of PF & ESI of Rs. 91,24,951/- and second one of Rs. 37,963/- on account of penalty or fine paid by the assessee during the year. The order was challenged before the Ld. CIT(A) who dismissed the appeal of the assessee, however, in a rectification order JCIT(A)-2, Lucknow vide order dated 01.04.2024 allowed EPF to the tune of Rs. 27,24,986/- which was paid due on 15.09.2017 i.e. paid on the same day. 4. The ld. A.R submitted before us that by referring to page no. 144, the details of payments shown in the tax audit report. The Ld. A.R referred to item no. 82 of Rs. 2,86,167/- which became due on 15.08.2017 and was paid on 16.08.2017. The Ld. A.R submitted that the amount could not be deposited on 15.08.2017 as it was a public holiday and therefore it was paid on the next working day on 16.08.2017. The ld. A.R therefore prayed that this amount may kindly be allowed to the assessee in view of the decision of Co-ordinate Bench of Delhi in the case of M/s G.D. Foods and Manufacturing (India) Pvt. Ltd. vs. Assistant Director of Income Tax Central Circle- 26 , New Delhi in ITA No. 221/Del/2023 for AY 2019-20 dated 10.07.2023 wherein it has been held that where the last date when the payment is due to the Govt. Exchequer is a public holiday then the payment on the next working day is treated as paid within the due date. 5. The Ld. D.R relied on the order of authorities below. 6. After hearing the rival contentions and perusing the material on record, we find that the provident fund of Rs. 2,86,167/- which was due paid on 15.08.2017 but could not be deposited due to being public holiday on that day and deposited on the next date i.e. 16.08.2017. In our opinion, there is no delay in deposit of PF as the last due date of deposit was a public holiday and therefore it is presumed to be paid within the due date. The case of the assesse finds support from the decision of Co-ordinate Bench in the case of M/s G.D. Foods and Manufacturing (India) Pvt. Ltd. vs. Assistant Director of 3 I.T.A. No.364/Kol/2024 Assessment Year: 2018-19 Ginza Industries Ltd. Income Tax Central Circle-26 , New Delhi (supra). Accordingly, we modify the order of Ld. CIT(A) on this issue and direct the AO to allow the deduction of Rs. 2,86,167/-. The ground no. 1 is partly allowed. 7. Issue raised in ground no. 2 is against the confirmation of penalty of Rs. 37,963/- by the Ld. CIT(A) as made by the AO on account of expenditure by way of penalty or fine for violation of any law for the time being force during the year. After perusing the tax audit report in para 21(a), we note that the tax auditor wrongly reported under the column penalty Rs. 37,963/- which was stated to be wrongly reported by the tax auditor. Thereafter a certificate dated 24.11.2011 was issued by the tax auditor certifying that it was a typographical mistake and there is no such penalty paid during the year a copy of which is placed at Pg. no. 183 of PB. The assessee has made submission before the Ld. CIT(A) which was overlooked by the Ld. CIT(A). In view of the above facts and circumstances, we set aside the order of Ld. CIT(A) and direct the AO to delete this disallowance. 8. In the result, the appeal of the assessee is partly allowed. Order is pronounced in the open court on 9th October, 2024 Sd/- Sd/- (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) (Rajesh Kumar/राजेश क ुमार) Judicial Member/ÛयाǓयक सदèय Accountant Member/लेखा सदèय Dated: 9th October, 2024 SM, Sr. PS 4 I.T.A. No.364/Kol/2024 Assessment Year: 2018-19 Ginza Industries Ltd. Copy of the order forwarded to: 1. Appellant- Ginza Industries Ltd., A 501 and 502 Lotus Corporate Park, Off Western Express Highway, Jay Coach Lane, Goregaon East, Maharasthra- 400063 2. Respondent – DCIT, Circle-5(1), Kolkata 3. Ld. CIT(A)- Addl./JCIT(A)-2, Lucknow 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "