DCIT, CHENNAI V. Prostar Hospitality Services Pvt Ltd., CHENNAI

ITA 1129/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8158 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 26-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: K G RAGUNATH
• Keywords: Reasonable cause
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . . !' , # $% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.1129/MDS/2016 & '& /ASSESSMENT YEAR : 2011-12 ( () /APPELLANT) ( *+() /RESPONDENT) () , - /APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT *+(),- /RESPONDENT BY : SHRI K.G.RAGUNATH, ADVOCATE ,.# /DATE OF HEARING : 22.09.2016 /0' ,.# /DATE OF PRONOUNCEMENT : 28.10.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 15, CHENNAI DATED 19.01.2016 AND PERTAINS TO ASSESS MENT YEAR 2011-12. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), AAYAKAR BHAVAN, NEW BLOCK, 7 TH FLOOR, 121, M.G.ROAD, CHENNAI 600 034. V. M/S.PROSTAR HOSPITALITY SERVICES PVT.LTD., (FORMERLY KNOWN AS M/S.SINAR JENIH (INDIA) P. LTD.), NO.33, (OLD NO.14), 48 TH STREET, 9 TH AVENUE, ASHOK NAGAR, CHENNAI 600 083. PAN: AAGCS 9195R 2 I.T.A. NO.1129/MDS/2016 2. THERE IS A DELAY OF 10 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. AFTER HEARING BOTH THE PARTIES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE WAS A REASONABLE CAUSE FOR NOT FILING THE APP EAL BEFORE THE TIME PRESCRIBED. ACCORDINGLY, THE DELAY OF 10 DAYS CONDO NED AND APPEAL IS ADMITTED. 3. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. SHRI SHIVA SRINIVAS , THE LEARNED DEPARTMENT REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED THE CONTRIBUTION OF THE EMPLOYEES TOWARDS EMPLOYEES STATE INSURANCE AND PROVIDENT FUND TO THE EXTENT OF RS.1,57,55,042/- ON THE GROUND THAT THE S AME WAS NOT PAID WITHIN THE DUE DATE PROVIDED UNDER THE PROVIDENT FUND ACT AND EMPLOYEES STATE INSURANCE CORPORATION ACT. THE CIT(A) HOWEVER, DIRE CTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE IN CASE THE PAYM ENTS WERE MADE WITHIN THE GRACE PERIOD GRANTED UNDER THE RESPECTIVE ENACTMENT . ACCORDING TO THE LEARNED REPRESENTATIVE WHEN THE ASSESSEE RECOVERS EMPLOYEES CONTRIBUTION FROM THE RESPECTIVE EMPLOYEES IT IS EXPECTED TO PAY THE SAME TO THE RESPECTIVE AUTHORITIES IMMEDIATELY WITHIN THE PERIOD PROVIDED UNDER THE RESPECTIVE ENACTMENT. SINCE THE ASSESSEE HAS NOT PAID THE AMOU NT, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. T HEREFORE, THE CIT(A) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. WE HEARD SHRIK.G.RAGHUNATH, THE LEARNED COUNSEL FOR THE ASSESSEE ALSO. ACCORDIN G TO THE LEARNED COUNSEL, THE PAYMENT WAS MADE WITHIN THE DUE DATE PROVIDED U NDER SECTION 139(1) OF 3 I.T.A. NO.1129/MDS/2016 THE ACT FOR FILING OF THE RETURN OF INCOME. THEREFO RE, THE CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE PAYMENT TOWARDS EMPLOYEES CONTRIBUTION TO EMPLOYEES STATE INSURANCE AND PROVIDENT FUND WAS MADE BY THE ASSESEE WITHIN THE DUE DATE FO R FILING THE RETURN OF INCOME UNDER SECTION 139(1). THE ONLY OBJECTION OF THE DEPARTMENT REPRESENTATIVE IS THAT THE PAYMENT WAS NOT MADE WIT HIN THE DUE DATE PROVIDED UNDER THE EMPLOYEES STATE INSURANCE CORPORATION ACT AND PROVIDENT FUND ACT. THE GRACE PERIOD GRANTED UNDER THE RELEVANT PROVISI ONS OF THE RESPECTIVE ACT CANNOT BE IGNORED AT ALL. THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE INCOME TAX ACT IS A SPECIAL ENACTMENT FOR THE COMPU TATION OF ASSESSABLE INCOME. SECTION 43B OF THE INCOME TAX ACT PROVIDES FOR DEDUCTION OF CERTAIN AMOUNT ON ACTUAL PAYMENT ONLY. THE MADRAS HIGH COUR T IN INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD. IN TC(APPEAL) NOS.585 & 586 OF 2015 DATED 24.7.2015 ALLOWED THE SIMILAR CLAIM IN CASE THE SAM E WAS PAID WITHIN THE DUE DATE FOR FILING OF THE RETURN OF INCOME UNDER SECTI ON 139(1) OF THE ACT. IN VIEW OF THIS JUDGMENT OF MADRAS HIGH COURT, THIS TRIBUNA L DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY, THE SAME IS CONFIRMED. 4 I.T.A. NO.1129/MDS/2016 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 28 TH OCTOBER, 2016 AT CHENNAI. SD/- SD/- ( . . !' ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) # /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 1 /DATED, THE 28 TH OCTOBER, 2016. SP. , *.!2 32'. /COPY TO: 1. () /APPELLANT 2. *+() /RESPONDENT 3. 4. ( )/CIT(A) 4. 4. /CIT, 5. 25 *. /DR 6. & 6 /GF.