M/s Bihar State Warehousing Corpn. Ltd., V. ACIT,

ITA 113/PAT/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1023 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 21-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARCHANA SINHA SR S C
• Assessee Lawyers: MANISH RASTOGI
• Keywords: Question of law
• Section: 43B

Judgement Text

, PATNA IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA . . . , , BEFORE SHRI A.D. JAIN (JM) AND SHRI SANJAY ARORA (AM) ./ I.T.A. NO. 113/PAT/2011 ( / ASSESSMENT YEAR: 2008 - 09) BIHAR STA TE WAREHOUSING CORP. LTD. PATNA / VS. ACIT, CIRCLE - 2, PATNA ./ ./ PAN/GIR NO. AACCB 1034 G ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI MANISH RASTOGI, ADV. / RESPONDENT BY : SMT. ARCHANA SINHA, SR. S.C / DATE OF HEARING : 15.04.2015 / DATE OF PRONOUNCEMENT : 28 .05.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - DHANBAD (CIT(A) FOR SHORT) DATED 09.09.2011 , DISMISSING THE A SSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX A CT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2008 - 09 VIDE ORDER DATED 06.12.2010. 2. THE ISSUE ARISING IN THIS APPEAL IS THE MAINTAINABILITY IN LAW OF THE ADDITION U/S.2(24)(X) R/W S . 36(1)(V A) OF THE ACT IN - AS - MUCH AS THE EMPLOYEES CO NTRIBU TION TO THE E MPLOYE E S PROVIDENT F UND (EPF) HAD BEEN , TO THE EXTENT OF THE IMPUGNED SUM, I.E., RS.14,71,794/ - , ADMITTEDLY PAID BEYOND THE DUE DATE FOR DEPOSIT OF THE SAME WITH THE RELEVANT F UND , AS DEFINED U/S.36(1)(VA), AS RECKONED AFTER INCLUDING E VEN THE GR ACE PERIOD, 2 ITA NO. 113/PAT/2011 (A.Y. 2008 - 09) BIHAR STATE WAREHOUSING CORP. LTD. VS. ACIT THOUGH PAID BY THE DUE DATE FOR FILING THE RETURN FOR THE RELEVANT YEAR. THE REVENUE, HOWEVER, HAS DENIED DEDUCTION ON THE GROUND THAT SECTION 43B IS NOT APPLICABLE, O USTING THE ASSESSEES RELIANCE ON THE DECISION IN THE CASE OF VINAY CEMENT LIMITED VS. CIT [2009] 313 ITR (STAT) 1 (SC) (COPY ON RECORD) ON THAT GROUND, SO THAT THE REVENUES RELIANCE ON THE DECISION BY THE TRIBUNAL IN THE A SSESSEES OWN CASE FOR A.Y. 2005 - 0 6 (IN ITA NO. 62/PAT/2009 DATED 31.08.2009 /PB PGS.62 - 65 ) WAS APPO SITE. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. 3.1 WITHOUT DOUBT, THE DECISION BY THE APEX COURT L A YS DOWN THE LAW OF THE LAND UNDER ARTICLE 141 OF THE CONSTITUTION OF INDIA (COI) , AND IS ACCORDINGLY BINDING ON ALL THE COURTS OF INDIA. THE ASSESSEES RELIANCE ON DECISIONS, AS IN THE CASE OF CIT VS. ABHAY KUMAR JAIN [2006] 281 ITR 431 (MP) , TOWARD THE SAME , IS THUS VALID. THE DECISION IN VINAY CEMENT LIMITED (SUPRA) IS , FIRSTLY , BY WAY OF DISMISSAL OF SLP BY THE REVENUE PER AN IN LIMINE ORDER AND , SECONDLY , IN RESPECT OF SECTION 43B, AS STOOD PRIOR TO ITS AMENDMENT. IN FACT, SUBSEQUENT THERETO, THE APEX COURT IN CIT VS. ALOM EXTRUSIONS LTD . [2009] 319 ITR 306 (SC) HAS HELD THE AMENDMENT BY WAY OF OMISSION OF REFE RENCE TO CLAUSES (A ) TO (F) , SAVE CLAUSE (B) , IN E XPLANATION TO SECTION 43B BY FINANCE ACT, 2003, W.E.F. 01.04.2004, AS CURATIVE AND , THUS , RETROSPECTIVE. THE TRIBUNAL IN THE ASSESSEES OWN CASE HAS FURTHER HELD THE DISALLOWANCE IN RESPECT OF THE EMPLOYEE S CONTRIBUTION TO B E U/S. 36(1)(VA) AND NOT U/S.43B. THE REVENUE HAS, FOLLOWING THE TRIBUNALS ORDER , DENIED RELIEF ON THE SAME BASIS. THE SAME SHALL CONTINUE TO APPLY EVEN AFTER THE AMENDMENT TO SECTION 43B IN - AS - MUCH AS THE SAME IS NOT APPLICA BLE TO A DEDUCTION, OR NON ALL OWANCE THEREOF, AS THE CASE MAY BE, U/S.36(1)(VA). AS A READING OF THE PROVISION WOULD CLEARLY SHOW , SECTION 43B RELATES TO THE DEDUCTION IN RESPECT OF THE EMPLOYE R S CONTRIBUTION TO EPF , SO THAT THE SAID PROVISION , AND AMENDMENTS THERETO , SHALL ONLY APPLY IN RELATION THERETO. 3.2 THE TRIBUNAL PER ITS DETAILED DECISION IN THE CASE OF ITO VS. L.K. P. SECURITIES LTD. (ITA NOS. 638 & 1093/MUM/ DATED 17.05.2013, REPORTED AT [2013] 36 CCH 093 (MUM - TRIB.) , MEETING THE ASSESSEES RELIANCE ON A NU MBER OF DECISION S, INCLUDING TH O S E RELIED UPON BY THE ASSESSEE IN THE PRESENT CASE, HELD THAT EVEN ASSUMING FOR THE SAKE OF 3 ITA NO. 113/PAT/2011 (A.Y. 2008 - 09) BIHAR STATE WAREHOUSING CORP. LTD. VS. ACIT ARGUMENT SECTION 43B TO BE APPLICABLE TO THE EMPLOYEE S CONTRIBUTION, THE SAME WOULD BE OF NO CONSEQUENCE. THIS IS AS SECTION 43B IS ONLY IN THE NAT URE OF A DISABLING PROVIS ION , PROVIDING FOR THE ADDITIONAL QUA LIFICATION OF PAYMENT (BY THE SPECIFIED DATE), SO THAT IT SHALL APPLY ONLY WHERE THE SAME IS OTHERWISE ALLOWABLE, I.E., BUT FOR SECTION 43B . THE SUM UNDER REFERENCE MUST THEREFORE FIRST SATISFY THE MANDATE OR CONDITION F OR ALLOWANCE OF THE PARENT SECTION, I.E., UNDER WHICH THE DEDUCTION IS SOUGHT TO BE CLAIMED. SECTION 36(1)(VA) , WHICH IS CLEARLY THE DEDUCTION PROVISION IN RESPECT OF THE EMPLOYEES CONTRIBUTION, ITSELF PROVIDES FOR PAYMENT AS A C ONDITION PRECEDENT FOR THE ALLOWANCE OF DEDUCTION AND, FURTHER , ONE WHICH IS MORE STRINGENT TH A N THAT POSTULATED BY SECTION 43B, WHICH PROVISION SHALL, THEREFORE, EVEN THEORETICALLY NOT APPLY. AGAIN, PER ITS DECISION IN BIHAR STATE FINANCIAL CORP. LTD. VS . DCIT (IN ITA NOS. 69 & 187 /PAT/2008 DATED 23.04.2015), THE TRIBUNAL , FOLLOWING THE DECISION BY THE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORP . [2014] 366 ITR 170 (GUJ.) AS WELL AS BY THE SPECIA L BENCH OF THE T RIBUNAL IN THE CASE OF JT. CIT VS. ITC LTD. [2008] 112 ITD 57 (KOL) (SB) , CONFIRMED THE SAME VIEW, HOLDING SECTION 43B AND SECTION 36(1)(VA) AS NOT ONLY APPL ICABLE TO DIFFERENT SUMS, TO ALSO O P ER A TE IN DIFFERENT FIELDS IN - AS - MUCH AS WHILE THE FORMER (S . 43B) IS QUA A T RADING LIABILITY, WHICH IS TO BE EXCLUDED IN DETERMINING THE COMMERCIAL PROFITS, THE LAT T ER (S . 36(1)(VA) ) IS QUA A SUM WHICH IS DEEMED AS THE ASSESSEES INCOME UNDER THE CIRCUMSTANCE OF I T S NON - PAYMENT BY A DEFIN ED DATE, I.E., IN THE EVENT OF CONTRAVENING THE STATUTORY OBLIGATION THAT ATTACHES THERETO. AS SUCH, THOUGH STRICTLY ONLY A DEDUCTION PROVISION, THE SAME (S. 36(1)(VA)) FUNCTIONALLY OPERATES PREVENTION OF INCLUSION OF A S UM L Y ING WITH IT UNDER TRUST AS INCOME . 3.3 COMING TO THE CASE LAW RELIED UPO N, EXPRESSING A CONTRARY VIEW, THE ANSWER IN OUR VIEW LIES IN THE CLEAR DIFFERENCE IN THE LANGUAGE OF THE STATUTE, WHICH IS EDICT OF THE LEGISLATURE (REFER , INTER ALIA, CIT V. CALCUTTA KNITWEARS [2014] 362 ITR 673 (SC); BRITANNIA INDUSTRIES LTD. VS. CIT [2 005] 278 ITR 546 (SC) ; AND PADMASUNDARA RAO VS. STATE OF TAMILNADU [2002] 255 ITR 147 (SC) ) . THE PURVIEW OF THE TRIBUNAL IN THE FACE OF CONTRARY DECISIONS BY DIFFERENT HIGH COURTS, NONE OF WHICH IS JURISDICTIONAL, IS T O FOLLOW 4 ITA NO. 113/PAT/2011 (A.Y. 2008 - 09) BIHAR STATE WAREHOUSING CORP. LTD. VS. ACIT ITS CONSCIENCE, I.E., T HAT WH ICH APPEALS TO ITS JUDICIAL MIND. BESIDES THE CLEAR LANGUAGE OF THE PROVISIONS OF SS. 2(24)(X) AND 36(1)(VA), THE DIFFERENCE IN THE SUMS TO WHICH THE TWO SECTIONS APPLY MANIFESTS ITSELF IN THE LANGUAGE ADOPTED THEREIN FOR IDENTIFYING THE SAME AS WELL AS PR ESCRIBING THE CONDITION OF ITS PAYMENT. THE PROVISION OF S. 43B HAS ALSO BEEN DISCUSSED ASSUMING ITS APPLICABILITY, TO NO AVAIL; RATHER, REFURBISHING THE ARGUMENT AS TO NON - APPLICABILITY OF SECTION 43B TO SUMS COVERED BY SECTION 36 (1)(VA) R / W.S. 2(24)(X). T HE HONBLE HIGH COURT IN GUJARAT STATE ROAD TRANSPORT CORP . (SUPRA) HAS ALSO CONSIDERED THE SEVERAL JUDGMENTS BEING ADVANCED BY THE ASSESSEE STATING THEM TO BE OF NO MOMENT IN VIEW OF THE CLEAR PROVISION S OF LAW , OR OTHERWISE DISTINGUISHING THE SAME . REF ERENCE FOR THE SAME BE MADE TO PARAS 7.07 TO 7.12 OF THE SAID JUDGMENT, WHICH EXHAUSTIVELY ANALYZ ES THE ISSUE. 4. IN VIEW OF THE FOREGOING, W E HAVE NO HESITATION IN UPHOLDING THE IM PUGNED ORDER. THE ASSESSEE, WE OBSERVE HAS ALSO APPROACHED THE HONBLE HI GH COURT AGAINST THE ORDER BY THE TRIBUNAL IN ITS CASE FOR THE EARLIER YEAR (A.Y. 2005 - 06), AND WHICH HAS ADMITTED THE QUESTION OF LAW ARISING IN THE PRESENT APPEAL (IN MA NO. 302 OF 2008 DATED 21.11.2014/PB PGS. 66 - 67) . THIS IS PRECISELY THE QUESTION ARIS ING BEFORE THE TRIBUNAL AS WELL. NO MILEAGE FROM THE SAID REFERENCE TO THE HONBLE HIGH COURT WOULD ARISE ON THAT ACCOUNT IN - AS - MUCH AS THERE IS THEREFORE NO DECIS IO N BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER, W HILE WE HAV E, AS ARE OBLIGED TO, DECIDED THE ISSUE ON ITS MERITS. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED BY LISTING THE RESULT ON THE NOTICE BOARD OF THE BENCH UNDER RULE 34(4) OF THE APPELLATE TRIBUNAL R ULES, 1963. SD/ - SD/ - ( A. D. JAIN ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER DATED : 28 . 0 5 .201 5 . . ./ ROSHANI , SR. PS 5 ITA NO. 113/PAT/2011 (A.Y. 2008 - 09) BIHAR STATE WAREHOUSING CORP. LTD. VS. ACIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - PATNA 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI