Appeal details
Counselvise Citation
[2018] 118 COUNSELVISE.COM (IT) 6978 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 13 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-12-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2014-2015
Appeal Filed On
17-09-2018
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 1082/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. SHRI RAJENDRA KUMAR SANCHETI, 263-264, JOHARI BAZAAR, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 1(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AGWPS 7304 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) & SHRI GULSHAN AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI P.P. MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 31.12.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 31/12/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27 TH JULY, 2018 OF LD. CIT (A)-1, JAIPUR FOR THE ASSESSMENT YEAR 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. [78,827+15,827+95,392+18,076]= EA. 2,08,122/- MADE BY AO BY APPLYING THE PROVISIONS OF SECTION 36(1)(VA) OF INCOME TAX ACT, 1961 IN RESPECT TO THE EMPLOYEES CONTRIBUTION OF P.F AND ESI WHICH WAS DEPOSITED BY THE ASSESSEE AFTER THE D UE DATE BUT BEFORE FILING INCOME TAX RETURN IN ASSESSEES PROPR IETARY FIRMS M/S. FOUR SEASON RESTAURANT AND M/S. FOUR SEASON (I NDIA) TOURS. 2 ITA NO. 1082/JP/2018 SHRI RAJENDRA KUMAR SANCHETI, JAIPUR. 2. THE ASSESSEE PRAYS FOR LEAVE TO ADD, TO AMEND, T O DELETE, TO MODIFY THE ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE THE H EARING OF APPEAL. 2. THE ONLY ISSUE ARISES IN THIS CASE OF THE ASSESS EE IS REGARDING DISALLOWANCE/ADDITION MADE BY THE AO ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF AND ESI DEPOSITED BY THE ASSESSEE BEFORE THE DUE DA TE OF FILING OF THE RETURN UNDER SECTION 139(1) BUT AFTER THE DUE DATE AS PER THE RE SPECTIVE ACTS. 3. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT TH IS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF HONBLE JURISDICTI ONAL HIGH COURT INCLUDING DECISION IN CASE OF CIT VS. SBBJ, 363 ITR 70 (RAJ.) AS WELL AS CIT VS. JVVNL, 99 DTR 131 (RAJ.). SUBSEQUENTLY, THE HONBLE JURISDICTIONAL H IGH COURT IN CASE OF CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD., 366 ITR 163 (RAJ.) ALSO DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE IN PARA 6 TO 10 AS UNDER :- 6. IT WAS CONTENDED BY LEARNED COUNSEL FOR THE REVENU E THAT THE CIT(A) AND ITAT FELL IN ERROR IN DELETING THE ADDITION MADE UN DER SECTION 36(1)(VA) READ WITH SECTION 2(24)(X) OF THE ACT WITHOUT CONSIDERIN G THE FACTS AND LEGAL ASPECT INVOLVED THEREIN. IT WAS SUBMITTED WITH REFERENCE T O SECTION 43B OF THE ACT THAT THE DELETION OF SECOND PROVISO THEREIN, AFTER THE AMENDMENT BY THE FINANCE ACT, 2003; THE CONTRIBUTION OF THE EMPLOYER IS GOVERNED BY PROVISIONS OF SECTION 43B, WHEREAS, EMPLOYEES' CONTRIBUTION CO NTINUES TO BE GOVERNED BY PROVISION OF SECTION 36 (1)(VA) READ WITH SECTION 2 (24)(X) OF THE ACT AND, THEREFORE, THE ITAT FELL IN ERROR IN UPHOLDING THE ORDER PASSED BY THE CIT(A). 7. THE EFFECT OF DELETION OF SECOND PROVISO TO SECTIO N 43B OF THE ACT WAS CONSIDERED BY HON'BLE SUPREME COURT IN CIT V. ALOM EXTRUSIONS LTD . [2009] 319 ITR 306/185 TAXMAN 416 AND IT WAS OBSERVED AT PAGE 314 OF THE REPORT AS UNDER:- '.....SECTION 43B (MAIN SECTION), WHICH STOOD INSER TED BY THE FINANCE ACT, 1983, WITH EFFECT FROM APRIL 1, 1984, EXPRESSL Y COMMENCES WITH A NON OBSTANTE CLAUSE, THE UNDERLYING OBJECT BEING TO DISALLOW DEDUCTIONS CLAIMED MERELY BY MAKING A BOOK ENTRY BASED ON THE MERCANTILE SYSTEM OF ACCOUNTING. AT THE SAME TIME, SECTION 43B (MAIN SECTION) 3 ITA NO. 1082/JP/2018 SHRI RAJENDRA KUMAR SANCHETI, JAIPUR. MADE IT MANDATORY FOR THE DEPARTMENT TO GRANT DEDUC TION IN COMPUTING THE INCOME UNDER SECTION 28 IN THE YEAR IN WHICH TA X, DUTY, CESS, ETC., IS ACTUALLY PAID. HOWEVER, PARLIAMENT TOOK COGNIZANCE OF THE FACT THAT THE ACCOUNTING YEAR OF A COMPANY DID NOT ALWAYS TALLY W ITH THE DUE DATES UNDER THE PROVIDENT FUND ACT, MUNICIPAL CORPORATION ACT (OCTROI) AND OTHER TAX LAWS. THEREFORE, BY WAY OF THE FIRST PROV ISO, AN INCENTIVE/RELAXATION WAS SOUGHT TO BE GIVEN IN RESP ECT OF TAX, DUTY, CESS OR FEE BY EXPLICITLY STATING THAT IF SUCH TAX, DUTY , CESS OR FEE IS PAID BEFORE THE DATE OF FILING OF THE RETURN UNDER THE I NCOME-TAX ACT (DUE DATE), THE ASSESSEE(S) THEN WOULD BE ENTITLED TO DE DUCTION. HOWEVER, THIS RELAXATION/INCENTIVE WAS RESTRICTED ONLY TO TA X, DUTY, CESS AND FEE. IT DID NOT APPLY TO CONTRIBUTIONS TO LABOUR WELFARE FUNDS. THE REASON APPEARS TO BE THAT THE EMPLOYER(S) SHOULD NOT SIT O N THE COLLECTED CONTRIBUTIONS AND DEPRIVE THE WORKMEN OF THE RIGHTF UL BENEFITS UNDER SOCIAL WELFARE LEGISLATIONS BY DELAYING PAYMENT OF CONTRIBUTIONS TO THE WELFARE FUNDS. HOWEVER, AS STATED ABOVE, THE SECOND PROVISO RESULTED IN IMPLEMENTATION PROBLEMS, WHICH HAVE BEEN MENTION ED HEREINABOVE, AND WHICH RESULTED IN THE ENACTMENT OF THE FINANCE ACT, 2003, DELETING THE SECOND PROVISO AND BRINING ABOUT UNIFORMITY IN THE FIRST PROVISO BY EQUATING TAX, DUTY, CESS, AND FEE WITH CONTRIBUTION S TO WELFARE FUNDS.' 8. FURTHER THE HON'BLE SUPREME COURT IN CIT V. VINAY CEMENT LTD . [2009] 313 ITR (ST.) 1 WHILE DISMISSING THE SPECIAL LEAVE PETI TION PREFERRED BY THE REVENUE AGAINST THE JUDGMENT OF THE GUWAHATI HIGH C OURT OBSERVED AS UNDER:- 'IN THE PRESENT CASE WE ARE CONCERNED WITH THE LAW AS IT STOOD PRIOR TO THE AMENDMENT OF SECTION 43B. IN THE CIRCUMSTANCES THE ASSESSEE WAS ENTITLED TO CLAIM THE BENEFIT IN SECTION 43B FOR TH AT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT HE HAS CONTRIBUTED TO PROV IDENT FUND BEFORE FILING OF THE RETURN.' 9. FOLLOWING THE OBSERVATIONS OF HON'BLE SUPREME COUR T IN VINAY CEMENT ( SUPRA ), THE DELHI HIGH COURT IN CIT V. AIMIL LTD . [2010] 321 ITR 508/188 TAXMAN 265 HELD AT PAGE 518 AS UNDER:- 'WE MAY ONLY ADD THAT IF THE EMPLOYEES' CONTRIBUTIO N IS NOT DEPOSITED BY THE DUE DATE PRESCRIBED UNDER THE RELEVANT ACTS AND IS DEPOSITED LATE, THE EMPLOYER NOT ONLY PAYS INTEREST ON DELAYE D PAYMENT BUT CAN INCUR PENALTIES ALSO, FOR WHICH SPECIFIC PROVISIONS ARE MADE IN THE PROVIDENT FUND ACT AS WELL AS THE ESI ACT. THEREFOR E, THE ACT PERMITS THE EMPLOYER TO MAKE THE DEPOSIT WITH SOME DELAYS, SUBJECT TO THE AFORESAID CONSEQUENCES. IN SO FAR AS THE INCOME-TAX ACT IS CONCERNED, THE ASSESSEE CAN GET THE BENEFIT IF THE ACTUAL PAYM ENT IS MADE BEFORE THE RETURN IS FILED, AS PER THE PRINCIPLE LAID DOWN BY THE SUPREME COURT IN VINAY CEMENT (2009) 313 ITR (ST.) 1.' 10. IN VIEW OF THE SETTLED LEGAL POSITION, THE APPEAL PREFERRED BY THE REVENUE HAS NO SUBSTANCE AND THE SAME IS, THEREFORE, DISMIS SED. NO COSTS. 4 ITA NO. 1082/JP/2018 SHRI RAJENDRA KUMAR SANCHETI, JAIPUR. WE FURTHER NOTE THAT THE LD. CIT (A) THOUGH ACCEPTE D THE BINDING PRECEDENTS OF HONBLE JURISDICTIONAL HIGH COURT, HOWEVER, DUE TO SOME TYPOGRAPHICAL MISTAKE THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CA SE OF PRINCIPAL CIT VS. RAJASTHAN RENEWAL ENERGY CORPORATION IN DBIT APPEAL NOS. 10 T O 12/2018 HAS MISUNDERSTOOD THE SAID DECISION AND CONSEQUENTLY SUSTAINED THE AD DITION MADE BY THE AO. HENCE IN VIEW OF THE BINDING PRECEDENTS OF HONBLE JURISD ICTIONAL HIGH COURT AS WELL AS THE FACT THAT THE ASSESSEE ALREADY DEPOSITED THE AMOUNT OF PF AND ESI BEFORE THE DUE DATE OF FILING OF RETURN UNDER SECTION 139(1) OF TH E IT ACT, THE ADDITION MADE BY THE AO IS DELETED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 31/12/20 18. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 31/12/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI RAJENDRA KUMAR SANCHETI, JAI PUR. 2. THE RESPONDENT THE ITO WARD 1(1), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1082/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 5 ITA NO. 1082/JP/2018 SHRI RAJENDRA KUMAR SANCHETI, JAIPUR.
