M/s New Time Contractors and Builder (P) Ltd., Chandigarh V. DCIT, C-3(1), Chandigarh

ITA 1243/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0236 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 28-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 1243/CHANDI/2018 (ASSESSMENT YEAR: 2013-14) M/S NEW TIME CONTRACTORS AND BUILDER (P) LTD. SCO 111-112-113, SECTOR 17B, CHANDIGARH. PAN: AABCN3988N VS. DCIT, CIRCLE- 3(1), CHANDIGARH. APPELLANT RESPONDENT ASSESSEE BY : SHRI VINEET KRISHAN, ADV. DEPARTMENT BY : SHRI MANJIT SINGH, CIT(DR) DATE OF HEARING :27/03/2019 DATE OF PRONOUNCEMENT :29/03/2019 O R D E R PER N.K. SAINI, VICE PRESIDENT : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 12.07.2018 OF LD. CIT(A)- 4, LUDHIANA. (2) THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPE AL RELATES TO THE CONFIRMATION OF ADDITION OF RS. 10,84,619/- MADE BY THE AO ON ACCOUNT OF LATE PAYMENT OF EPF, THOUGH THE SAME WAS PAID BEFORE DUE DATE OF FILING THE RETURN OF INCOME. (3) FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESS EE FILED ITS RETURN OF INCOME ON 27.09.2013 DECLARING AN INCOME OF RS. 1,63,67,475/- . LATER ON THE CASE WAS SELECTED FOR SCRUTINY. (4) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO NOTICED THAT THE ASSESSEE DEPOSITED DELAYED PAYMENTS OF EPF IN RESPE CT OF THE SUMS RECEIVED FROM THE EMPLOYEES AMOUNTING TO RS. 10,84,619/-. HE THEREFORE, MADE THE ADDITION OF THE SAID AMOUNT BY INVOKING THE PROVISI ONS OF SECTION 36(1)(VA) R.W.S. 43B OF THE INCOME TAX ACT, 1961 (THE ACT FOR SHOR T). (5) BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION BY OBSERVING IN PARA 4.1 OF THE IMPUGNED ORDER AS UNDER: PAGE 2 OF 3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE DELAYED PAYMENTS OF EPF IN RESPECT OF SUM OF RS. 10,84,619. THE ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTION 36(1)(VA) OF THE INCOME TAX ACT, 1961 MADE ADDITION OF RS. 10,84,619. DURING APPEAL PROCEEDINGS, THE LD. COUNSEL HAS PLAC ED RELIANCE ON JUDGMENTS OF P & H HIGH COURT IN THE CASE OF CIT VS . MARK AUTO INDUSTRIES LTD. AND CIT VS. LAKHANI INDIA LTD. WHEREIN THE HONBLE PUNJAB & HARYANA HIGH COURT DISMISSED REVENUE APPEALS AGAINST THE ORDER OF LOWE R AUTHORITIES WHO HAVE ALLOWED DEDUCTION SINCE IN BOTH THE CASE OF THE PAY MENT OF EMPLOYEES CONTRIBUTION OF ESI AND PF WERE MADE WITHIN THE GRA CE PERIOD OF FIVE DAYS ALLOWED UNDER THE RESPECTIVE ACTS. BUT IN THE CASE OF ASSESSEE THE PAYMENTS WERE MADE BEYOND THE GRACE PERIOD ALLOWED UNDER THE ESI AND PF ACT. THEREFORE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS UPHEL D. (6) THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRA NSPORT CORPORATION REPORTED AT [2014] 366 ITR 170 (GUJ). (7) NOW, THE ASSESSEE IS IN APPEAL. (8) THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE CONTRIBUTION TO PF/ESI WAS DEPOSITED BEFORE FILING THE RETURN OF INCOME. T HEREFORE, THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF CIT VS. HEMLA EMBROYDERY MILLS (P.) LTD. [2014] 366 ITR 167 (P&H). (9) IN HIS RIVAL SUBMISSIONS, THE LD. CIT (DR) STRO NGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. (10) WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THERE WAS DELAY IN DEPOSITING THE EMPLOYEES CONTRI BUTION OF PROVIDENT FUND AND ESIC. HOWEVER, IT IS ACCEPTED BY THE AO THAT TH E DEPOSIT WAS MADE BEFORE FILING OF THE RETURN OF INCOME ON 27.09.2013. (11) ON A SIMILAR ISSUE THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. HEMLA EMBROYDERY MILLS (P.) LTD.(SUPRA) HELD AS UNDER: THE SECOND PROVISO TO SECTION 43B OF THE INCOME-TA X ACT, 1961, OMITTED BY THE FINANCE ACT, 2003, WITH EFFECT FROM APRIL 1, 2004, WAS CLARIFICATORY IN NATURE AND WAS TO OPERATE RETROSPECTIVELY. THUS, TH E ASSESSEE, FOR THE ASSESSMENT YEAR 2003-04, WAS ENTITLED TO DEDUCTION IN RESPECT OF THE EMPLOYERS AND EMPLOYEES CONTRIBUTIONS TO THE EMPLOYEES STATE IN SURANCE AND PROVIDENT FUND PAGE 3 OF 3 AS THE CONTRIBUTIONS HAD BEEN DEPOSITED PRIOR TO TH E FILING OF THE RETURN UNDER SECTION 139(1). SO RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY T HE HONBLE JURISDICTIONAL HIGH COURT IN THE AFORESAID REFERRED TO CASE, THE I MPUGNED ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS DELETED. (12) IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 29/ 03/2019). SD/- SD/- /- (SANJAY GARG) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDE NT DATED : 29/03/2019 BCG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR