DCIT 15(3)(1), MUMBAI V. RAY PROJECTS P. LTD, POWAI

ITA 1313/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6725 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 23-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDER SINGH
• Assessee Lawyers: ASHOK J PATIL
• Keywords: Retrospective amendment; Tax effect
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI PAWAN SINGH, JM I.T.A. NO. 1313/MUM/2017 ( ASSESSMENT YEAR: 2012 - 13 ) DY. CIT - 15(3)1, ROOM NO. 451, 4 TH FLOOR, AAYKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 VS. M/S . RAY PROJECTS PVT. LTD. PL O T NO. 1, RAY COMPOUND, OPP. HOLY TRINITY CHURCH, IIT MARKET, POWAI, MUMBAI - 400 076 PAN/GIR NO. AAECR 3167 N ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI VIRENDER SINGH RESPONDENT BY : SHRI ASHOK J. PATIL DATE O F HEARING : 26.06.2018 DATE OF PRONOUNCEMENT : 26.06 .2018 O R D E R PER S HAMIM YAHYA, A. M.: THIS A PPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 24, MUMBAI DATED 18.11.2016 AND PERTAINS TO THE A SSESS MENT YEAR 2012 - 13. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING DISALLOWANCE OF NON - PAYMENT OF CONTRIBUTION TO FUNDS BY THE EMPLOYEES FOR WELFARE OF E MPLOYEE S IN TERMS OF SECTION 36( L)(VA) OF THE I.T.ACT WHEN THE CIRCULAR NO.22/2015 DATED 17/12/2015 ISSUED BY THE CBDT SPECIFICALLY HIGHLIGHTED THAT THE CIRCULAR DOES NOT APPLY TO CLAIM OF DEDUCTION RELATING TO EMPLOYEE'S CONTRIBUTION TO WELFARE FUNDS WHICH ARE G OVERNED BY S ECTION 36(L)(VA) OF THE IT ACT. 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVES TO STATE THAT APPEAL IS BEING FILED IN VI EW OF THE THE EXCEPTION MENTIONED IN PARA 8 OF CBDT'S CIRCULAR NO.21/2015 DATED 2 ITA NO. 1313/MUM/2017 M/S. RAY PROJECTS PVT. LTD. 10.12.2015, WHEREIN IT IS STATED THAT ADVERSE JUDGMENTS RELATING TO SUCH ISSUE SHOULD BE CONTESTED ON MERITS NOT WITH STANDING THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 OF THE SAID CIRCULAR. 3. IN THIS CASE, THE ASSESSING OFFICER HAS DISALLOWED AN AMOUNT OF RS.11,30,504/ - RECEIVED BY THE ASSESSEE FROM HIS EMPLOYEES WHICH WERE NOT DEPOSITED BY THE ASSESSEE TO THE EMPLOYEES A CCOU NT IN THE RELEVA NT FUND BEFORE THE DUE DATE SPECIFIED IN THE RELEVANT ACT. HOWEVER , THESE PAYMENTS WERE MADE BEFORE THE DUE DATE OF FILING OF THE RETURN. 4. CONSIDERING THE ABOVE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) PLACING RELIANCE UPON THE DECISION OF THE HON' BLE BOMBAY HIGH COURT AND HONBLE APEX COURT DECISIONS HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER: 2.4.9 THE SUBMISSIONS OF THE AR AND THE FACTS OF THE CASE HAVE BEEN CONSIDERED IN THE LIGH T OF THE CASE LAWS RELIED UPON. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN ORGANIC CHEMICALS LTD. (366 ITR 1) HELD THAT 43B DISALLOWANCE NOT APPLICABLE TO PAYMENTS MADE BEYOND THE DUE DATE IN RESPECT OF EMPLOYEES' CONTRIBUTION TO PF/ESIC AS PER PROVISIONS OF SECTION 36(1)(VA). FURTHER, THE HON'BLE APEX COURT IN THE CASE OF ALOM EXTRUSION LTD. (319 ITR 306) HELD THAT PROVISIONS TO SECTION 43B BY FINANCE ACT, 2003 IS WITH RETROSPECTIVE EFFECT FROM 1.4.1998. ACCORDINGLY, CONTRIBUTION PAYABLE BY THE EMPLOYER TO THE PF OR ANY OTHER MODE FOR THE WELFARE OF THE EMPLOYEES WAS ALLOWABLE IF PAID BEFORE THE DUE DATE OF FILING RETURN. IN VIEW OF THE ABOVE DECISIONS, THE ADDITIONS MADE BY THE AO IS UNWARRANTED. THE AO IS, THEREFORE, DIRECTED TO DELETE THE SAM E. 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE MATERIAL ON RECORD . THE LD. COUNSEL OF THE ASSESSEE SUBMITTED BEFORE US THAT THE ISSUE IS SQUARELY COVERED IN 3 ITA NO. 1313/MUM/2017 M/S. RAY PROJECTS PVT. LTD. FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN ORGANIC CHEMICALS LTD. 366 ITR 1. IN THIS CASE, THE HONBLE HIGH COURT HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. UPON CAREFUL CONSIDERATION AND HEARING BOTH THE COUNSEL, WE ARE OF THE CONSIDERED OPINION THAT SINCE THE ISSUE INVOLVED IS FAIRLY COVERED IN FAVOUR O F THE ASSESSEE BY SEVERAL DECISIONS OF THE HONBLE HIGH COURT AS WE REFERRED ABOVE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (AP PEALS). ACCORDINGLY, WE UPHOLD THE SAME. 8. IN THE RESULT, TH IS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.06.2018 SD/ - SD/ - ( PAWAN SINGH ) (S HAMIM YAHYA) J U DICIAL MEMBER A CCOUNTANT MEMBER MUMBAI ; DATED : 26.06.2018 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD F ILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI