Vikrant Shivajirao Patil, Pune V. ACIT Circle-3, Pune, Pune

ITA 124/PUN/2011

• Counselvise Citation: 12424514 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MISHRA
• Assessee Lawyers: NILESH KHANDELWAL
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 124/PN/2011: A.Y. 2006-07 VIKRANT SHIVAJIRAO PATIL PROP. M/S. PRITHVI COMPUTERS 1 ST FLOOR BUTTE PATIL COMPLEX NEAR PAUD PHATA, KOTHRUD PUNE-411 029 PAN AEYPP 3449 O APPELLANT VS. ASSTT. CIT CIR 3, PUNE RESPONDENT APPELLANT BY: SHRI NILESH KHANDELWAL RESPONDENT BY: SHRI ALOK MISHRA DATE OF HEARING: 28-3-2012 DATE OF PRONOUNCEMENT: ___3-2012 ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-II PUNE DATED 21-10-2010 FOR A.Y. 2006-0 7 ON THE FOLLOWING GROUND: ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE A ND AS PER PROVISIONS OF THE ACT IT BE HELD THAT, THE DELAYED PAYENT OF PROVIDENT FUND AND ESI MISTAKENLY CONSIDERED AS NON - DEDUCTIBLE AND OFFERED AS INCOME WHILE COMPUTING IN COME FOR THE YEAR UNDER CONSIDERATION BE HELD AS DEDUCTIBLE AMOUNT AS PER THE PROVISIONS AND SCHEME OF THE ACT. IT FURTHE R BE HELD THAT THE FIRST APPELLATE AUTHORITY SHOULD HAVE ADJU DICATED AND GRANTED SUCH DEDUCTION AS CLAIMED BY THE APPELLANT IN THE APPEAL. THE APPELLANT BE GRANTED JUST AND PROPER RE LIEF IN THIS RESPECT. PAGE 2 OF 3 ITA NO. 124/PN/2011 VIKRANT S PATIL A.Y. 2006-07 2. THE ASSESSING OFFICER MADE DISALLOWANCE U/S 43B AMOUNTING TO RS. 2,07,742/- ON ACCOUNT OF BELATED PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI WHICH HAS BE EN CONFIRMED BY THE CIT(A). 3. ASSESSEE HAS INADVERTENTLY DID NOT CLAM DEDUCTIO N OF ABOVE CONTRIBUTION BUT SAME WAS RAISED BEFORE FIRST APPEL LATE AUTHORITY BY WAY OF ADDITIONAL GROUND. ITAT MUMBAI BENCH G N THE CASE OF MRS. GOPI S. SHIVNANI VS. ITO-21(1)(2) [2011]133 IT D 172 (MUM) HAS HELD THAT FIRST APPELLATE AUTHORITY HAS POWER T O DECIDE THE ISSUE RAISED BEFORE HIM. LD. CIT (A) HAS CO-TERMINUS POW ER WITH THAT OF AO. ACCORDING TO US FIRST APPELLATE AUTHORITY SHOU LD HAVE DECIDED THIS ISSUE RAISED BEFORE HIM. THE ISSUE BEING LEGA L IN NATURE HAS BEEN RAISED BEFORE US, SAME IS DECIDED IN FAVOUR OF ASSESSEE. 4. ON MERITS, WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HONBLE SUPREME COURT I N THE CASE OF CIT VS. ALOM EXTRUSIONS LTD (2009) 319 ITR 306 WHER EIN IT HAS BEEN HELD AS UNDER: THE OMISSION OF THE SECOND PROVISO TO SECTION 43B OF THE INCOME-TAX ACT, 1961 BY THE FINANCE ACT, 2003, OPER ATED, RETROSPECTIVELY, WITH EFFECT FROM APRIL 1, 1998 AND NOT PROSPECTIVELY FROM APRIL 1, 2004. EARLIER UNDER THE SECOND PROVISO TO SECTION 43B AS AMENDED BY THE FINANCE ACT, 1989, ASSESSES WERE ENTITLED TO DEDUCTION ONLY IF THE CONTRIBUTION STOOD CREDITED ON OR BEFOR E THE DUE DATE GIVEN IN THE PROVIDENT FUNDS ACT. THIS CREATE D FURTHER DIFFICULTIES AND ON A REPRESENTATION MADE TO THE FI NANCE ACT, 2003. THOUGH THIS AMENDMENT WAS MADE APPLICABLE WI TH EFFECT FROM APRIL 1, 2004, THE AMENDMENT WAS CURATI VE IN NATURE AND APPLIED RETROSPECTIVELY WITH EFFECT FROM APRIL 1, 1988. PAGE 3 OF 3 ITA NO. 124/PN/2011 VIKRANT S PATIL A.Y. 2006-07 WHEN A PROVISO IN A SECTION IS INSERTED TO REMEDY U NINTENDED CONSEQUENCES AND TO MAKE THE SECTION WORKABLE, THE PROVISO WHICH SUPPLIES AN OBVIOUS OMISSION THEREIN IS REQUI RED TO BE READ RETROSPECTIVELY IN OPERATION, PARTICULARLY TO GIVE EFFECT TO THE SECTION AS A WHOLE. THE AFORESAID JUDGMENT OF HONBLE SUPREME COURT HA S BEEN FOLLOWED BY THE SUBSEQUENT DECISION IN THE CASE OF CIT VS. AIMIL LTD. (2010) 321 ITR 708 (DEL). IN THIS VIEW OF THE MATT ER, WE HOLD THAT THE AUTHORITIES WERE NOT JUSTIFIED IN MAKING THE DI SALLOWANCE U/S 43B ON ACCOUNT OF BELATED PAYMENT OF EMPLOYEES CON TRIBUTION TOWARDS PROVIDENT FUND. THE DISALLOWANCE IS THEREF ORE, DIRECTED TO BE DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH 2012 SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADA V) JUDICIAL MEMBER PUNE DATED THE 29 TH MARCH 2012 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- (A) II PUNE 4. THE CIT II PUNE 5. THE D.R, B BENCH, PUNE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE