VGN Infra India Private Limited, CHENNAI V. DCIT, CHENNAI

ITA 1082/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8761 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 21-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Assessee Lawyers: K M MOHANDASS
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , ! . ' , # $ BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBE R AND SHRI. G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO.1082/MDS/2016 # % &% / ASSESSMENT YEAR : 2012-2013. VGN INFRA INDIA PRIVATE LIMITED, NO.15, WALLACE GARDEN 2 ND STREET, NUNGAMBAKKAM, CHENNAI 600 006. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(2) CHENNAI 600 034. [PAN AADCV 1283E] ( / APPELLANT) ( /RESPONDENT) DEPARTMENT BY : SHRI.K.M. MOHANDASS, C.A. '()* + , /RESPONDENT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT. ' + - /DATE OF HEARING : 28-06-2016 .& + - /DATE OF PRONOUNCEMENT : 21-07-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-11, CHENN AI FOR THE ASSESSMENT YEAR 2012-13 IN ITA NO.432/2014-15-CIT( A)-11, DATED 29.12.2015 PASSED U/S.143(3) AND 250 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). ITA NO.1082/MDS/2016 :- 2 -: 2. THERE IS A DELAY OF 51 DAYS IN FILING THE APPEAL B Y THE ASSESSEE. AT THE TIME OF HEARING THE LD. COUNSEL HAS FILED AN AFFIDAVIT EXPLAINING THAT THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) W AS SERVED ON THE ASSESSEE COMPANY ON 2.01.2016 WAS RECEIVED BY CHIE F FINANCIAL OFFICER. FURTHER, THE CHIEF FINANCIAL OFFICER HAS UNDERGONE BYE PASS SURGERY FOR GASTRO ULCER AND WAS ON LEAVE AND RESUMED THE OFFIC E AGAIN ON 07.04.2016 AND IMMEDIATELY FILED THE APPEAL ON 21.0 4.2016 WITH DELAY OF 51 DAYS. THE DELAY IN FILING THE APPEAL WAS NOT INT ENTIONAL BUT DUE TO HOSPITALIZATION OF CHIEF FINANCIAL OFFICER SHRI. RA MESH BABU. THE LD. DR HAS NO SERIOUS OBJECTIONS FOR CONDONATION OF DELAY. AFTER HEARING THE SUBMISSIONS, WE ARE SATISFIED WITH SUFFICIENT AND R EASONABLE CAUSE FOR FILING THE APPEAL BELATEDLY AND WE THEREFORE CONDO NE THE DELAY AND ADMIT THE APPEAL. 3. THE ASSESSEE HAS RAISED ONLY ONE SUBSTANTIVE GROUND THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDI NG EMPLOYEES CONTRIBUTION ARE NOT COVERED UNDER PROVISIONS U/S.4 3B OF THE ACT AND DEPOSITS OF PF AND ESI EMPLOYEES CONTRIBUTION BEYO ND DUE DATE SPECIFIED UNDER THE RESPECTIVE ACT BUT BEFORE THE DUE DATE OF FILING THE RETURN U/S.139(1) OF THE ACT ARE NOT ALLOWABLE EXPENDITU RE AND DISTINGUISHED THE JUDICIAL DECISIONS. ITA NO.1082/MDS/2016 :- 3 -: 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S IN BUSINESS OF CONSTRUCTION OF RESIDENTIAL BUILDING AND INFRAST RUCTURE WORKS AND FILED RETURN OF INCOME ON 01.10.2012 WITH TOTAL INCOME OF D3,45,90,030/- AND THE RETURN OF INCOME WAS PROCESSED U/S.143(1) OF TH E ACT. SUBSEQUENTLY UNDER CASS THE CASE WAS SELECTED AND LD. ASSESSING OFFICER ISSUED QUESTIONNAIRE AND THE LD. AUTHORISED REPRESENTATIV E OF ASSESSEE APPEARED FROM TIME TO TIME AND COMPLIED WITH THE DETAILS. T HE LD. ASSESSING OFFICER ON VERIFICATION OF BOOKS OF ACCOUNT, FOUND THE ASSE SSEE COMPANY PAID EMPLOYEES CONTRIBUTION OF ESI AND EPF BEYOND THE DU E DATE SPECIFIED UNDER THE RESPECTIVE ACT. THE LD. AUTHORISED REPRE SENTATIVE EXPLAINED THAT THOUGH THE ASSESSEE COMPANY COULD NOT MAKE PA YMENTS FOR VARIOUS REASONS WITHIN DUE DATE OF THE STATUTORY ACTS BUT P AID ENTIRE CONTRIBUTION BEFORE DUE DATE OF RETURN OF INCOME U/S.139(1) OF T HE ACT. BUT THE LD. ASSESSING OFFICER OVERLOOKED THE DETAILED EXPLANATI ON AND RELIED ON THE JUDICIAL DECISION AND DISALLOWED THE CLAIM. AGGRIE VED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INC OME TAX (APPEALS). 5. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED RE PRESENTATIVE OF ASSESSEE APPEARED AND ARGUED THE GROUNDS AND EXP LAINED THAT THE LD. ASSESSING OFFICER HAS DISALLOWED ESI AND EPF PAYMEN TS PAID AFTER DUE DATE SPECIFIED BY THE ACT AND THE SAID PAYMENTS ARE TO BE ALLOWED U/S.36(1)(VA) OF THE ACT AN WERE PAID BEFORE DUE DA TE U/S.139(1) OF THE ITA NO.1082/MDS/2016 :- 4 -: ACT AND RELIED ON THE HONBLE DELHI HIGH COURT DECI SION IN THE CASE OF CIT VS. AIMIL LTD (2010) 299 TAXMANN 265 WERE IT WAS HELD THAT THE EMPLOYEES CONTRIBUTION TOWARDS ESI AND EPF WOULD QU ALIFY FOR DEDUCTION EVEN IF PAID AFTER DUE DATE PRESCRIBED UNDER PROVID ENT FUND /ESI ACT BUT BEFORE DUE DATE OF FILING OF RETURN. THE LD. COMMI SSIONER OF INCOME TAX (APPEALS) CONSIDERED THE FINDINGS OF THE LD. ASSESS ING OFFICER, SUBMISSIONS, DISTINGUISHED THE JUDICIAL DECISIONS RELIED BY THE ASSESSEE AND THE PROVISIONS OF SEC. 36(1)(VA) OF THE ACT AND RELIED ON THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPORATION (2014) 41 AND UPHELD THE ACTION OF THE LD ASSESSING OFFICER AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. AGGR IEVED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ORDER, THE ASS ESSEE ASSAILED AN APPEAL BEFORE TRIBUNAL. 6. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE ASSESSING OF FICER, APPELLATE PROCEEDINGS AND RELIED ON JUDICIAL DECISIONS. TH E LD. AUTHORISED REPRESENTATIVE EXPLAINED BEING THAT THE ASSESSEE HA S DEPOSITED EMPLOYEES CONTRIBUTION UNDER ESI AND PF WITHIN DUE DATE OF FILING OF RETURN OF INCOME SPECIFIED U/S.139(1) OF THE ACT A ND PAYMENTS ARE CONSIDERED UNDER PROVISIONS OF SEC. 43B OF THE ACT AND RELIED ON JURISDICTIONAL HIGH COURT DECISION AND PRAYED FOR ALLOWING THE APPEAL. ITA NO.1082/MDS/2016 :- 5 -: 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE RELIED ON THE ORDERS OF LOWER AUTHORITIES AND VEHEMENTLY O PPOSED TO THE GROUNDS. 8. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD AND JUDICIAL DECISIONS CITED. THE SOLE GROUND ENVI SAGED BY THE LD. AUTHORISED REPRESENTATIVE THAT THE ASSESSEE COMPANY HAS COMPLIED THE CONDITIONS OF PAYMENT OF PF/ESI UNDER THE RESPECTIV E STATUES BUT THERE WAS A DELAY IN PAYMENTS AND ASSESSEE IS LIABLE FOR PAYMENT OF INTEREST ALSO. BUT UNDER THE PROVISIONS OF INCOME TAX ACT T HE ASSESSEE COMPANY HAS DEPOSITED EMPLOYEES CONTRIBUTION OF ESI AND EP F BEFORE TIME LIMIT SPECIFIED U/S.139(1) OF THE ACT AND COVERED BY THE PROVISIONS OF SEC. 43B OF THE ACT. WE FOUND ON SIMILAR ISSUE JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS. M/S. INDUSTRIAL SECURITY & INTELLIGENCE IND IA PVT . LTD WERE IT HAS HELD AS UNDER:- 5. WE FIND THAT THE TRIBUNAL HAS RIGHTLY RELIED O N THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT V. ALOM EX TRUSIONS LTD. REPORTED IN 319 ITR 306, WHEREBY, THE SUPREME COURT HELD THAT OMISSION OF SECOND PROVISO TO SECTION 43B AND AMENDMENT TO FIRST PROVISO BY FINANCE ACT, 2003 ARE CURATIVE IN NATURE AND ARE EFFECTIVE RETROSPECTIVEL Y, I.E., WITH EFFECT FROM 1.4.1988 I.E., THE DATE OF INSERTION OF FIRST PROVISO. THE DELHI HIGH COURT IN THE CASE OF CIT V. AMIL LT D. REPORTED IN 321 ITR 508 HELD THAT IF THE ASSESSEE H AD DEPOSITED EMPLOYEE'S CONTRIBUTION TOWARDS PROVIDENT FUND ITA NO.1082/MDS/2016 :- 6 -: AND ESI AFTER DUE DATE AS PRESCRIBED UNDER THE RELE VANT ACT, BUT BEFORE THE DUE DATE OF FILING OF RETURN UNDER T HE INCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VIEW OF T HE PROVISIONS OF SECTION 43B AS AMENDED BY FINANCE ACT , 2003. WE RESPECTFULLY FOLLOWING THE JUDICIAL HIGH COURT D ECISION DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION AND ALLOW THE GROUND OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.1082/MDS/2016 IS ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 21ST DAY OF JUL Y, 2016 AT CHENNAI. SD/- SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . ) (G. PAVAN KUMAR) ! ' / JUDICIAL MEMBER / CHENNAI / / DATED: 21ST JULY, 2016. KV 0 + '#-12 32&- / COPY TO: 1 . )* / APPELLANT 2. '()* / RESPONDENT 3. ' 4- () / CIT(A) 4. ' 4- / CIT 5. 2 78 '#-# / DR 6. 89% : / GF