Hotel Surya, Shimla V. CPC/ITOWard-1, Shimla

ITA 134/CHANDI/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8956 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 01-06-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA CIT
• Assessee Lawyers: CHETAN SHARMA
• Keywords: Retrospective amendment
• Section: 43B; 143(1); 139(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH (VIRTUAL COURT) .., ! '# .. , $ %& BEFORE: SHRI. N.K.SAINI, VP & SHRI , R.L. NEGI, JM ITA NOS. 133 & 134/CHD/2021 ASSESSMENT YEAR : 2018-19 & 2019-20 HOTEL SURYA 1, CIRCULAR ROAD SHIMLA-171001, HIMACHAL PRADESH THE DCIT CENTRALIZED PROCESSING CENTRE, BENGALURU ITO, WARD-1, SHIMLA PAN NO: AAFFH4377J APPELLANT RESPONDENT !' ASSESSEE BY : SHRI CHETAN SHARMA, CA #!' REVENUE BY : SHRI ASHOK KHANNA, ADDL. CIT $ %! & DATE OF HEARING : 05/08/2021 '()*! & DATE OF PRONOUNCEMENT : 05/08/2021 %'/ ORDER PER N.K. SAINI, VICE PRESIDENT THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE SEPARATE ORDERS EACH DT. 05/04/2021 OF THE LD. CIT(A) NATION AL FACELESS APPEAL CENTRE (NFAC), DELHI. 2. SINCE THE ISSUES INVOLVED ARE COMMON IN BOTH THE SE APPEALS WHICH WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. AT THE FIRST INSTANCE WE WILL DEAL WITH THE APPE AL IN ITA NO. 133/CHD/2021 FOR THE A.Y. 2018-19 WHEREIN ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING TH E ACTION OF THE LD. ASSESSING 2 OFFICER WHO HAD MADE ADDITION OF RS. 5,63,720/- ON A CCOUNT OF LATE PAYMENT OF EPF AND ESI, THOUGH THE AMOUNT WAS DULY PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1), HENCE IT IS AN ALLOWABLE EXPENDITURE AS PER THE JUDGMENT OF HONORABLE SC IN THE CASE OF PR. CIT VS RAJASTHAN STATE BEVERAGES CORPORATION LTD. 84 TAXMNN.COM 185. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT FOLLOWING THE BIN DING DECISION OF JURISDICTIONAL HIMACHAL PRADESH HIGH COURT IN THE CASE OF CIT VS N IPSO POLYFABRIKA LTD. WITHOUT GIVING ANY BONAFIDE REASONS, SO IMPUGNED CIT(A) ORD ER, PASSED WITHOUT FOLLOWING JURISDICTIONAL HIGH COURT, IS ILLEGAL AND VOID IN T HE EYES OF LAW. 3. THAT THE APPELLANT CRAVES TO ADD, AMEND OR ALTER ANY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL, WITH TH E PERMISSION OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. WHI LE ISSUING THE INTIMATION ORDER UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DISALLOWED THE SUM OF RS. 5,6 3,720/- ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO ESI & PROVIDE NT FUND, BY INVOKING THE PROVISIONS OF SECTION 36(1)(VA) OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI HAD BEEN DEPOSITED WITH IN THE TIME LIMIT PRESCRIBED UN DER SECTION 139(1) OF THE ACT, WHICH IS ALLOWABLE AS PER THE PROVISIONS OF 43B OF THE ACT. HOWEVER THE LD.CIT(A) DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESS EE AND SUSTAINED THE ADDITION MADE BY THE A.O. THE RELIANCE WAS PLACED ON THE JUD GMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. STATE ROAD TRANSP ORT CORPORATION REPORTED AT 366 ITR 170. 6. NOW THE ASSESSEE IS IN APPEAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE DEPOSITED THE IMPUGNED AMOUNT BEFORE FILING THE RETURN UNDER SECTION 139(1) OF THE ACT, THEREFORE, THE DISALLOWANCE MADE BY THE A.O. AND SU STAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. RELIANCE WAS PLACED ON THE FOLL OWING CASE LAWS : 3 * PR. CIT VS. RAJASTHAN STATE BEVERAGES CORPORATION LTD. [2017] 84 TAXMANN.COM 185 (SC) * CIT, SHIMLA VS. NIPSO POLYFABRIKS LTD. [2013] 350 ITR 327 (HP-HC) * M/S GILCO EXPORTS LTD. VS. ACIT, CIRCLE 2(1), CHA NDIGARH ITA NO. 1244/CHD/2018 (CHD-TRI)ORDER DATED 31/07/2019 * NEW TIME CONTRACTORS AND BUILDER(P) LTD. VS. DCIT , CIRCLE 3(1) CHANDIGARH ITA NO. 1243/CHANDI/2018 (CHD-TRI) ORDER DATED 29/0 3/2019 * MAHADEV COLD STORAGE VS. JURISDICTIONAL ASSESSING OFFICER, CIRCLE-4(1)(2), ALIGARH ITA NO. 41 & 42/AGR/2021 (AGR-TRI) ORDER DA TED 14/06/2021 * SALZGITTER HYDRAULICS P. LTD. VS. ITO, WARD 3(1) HYDERABAD ITA NO. 644/HYD/2020 (HYD-TRI)ORDER DATED 15/06/2021 8. IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUP PORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE IT IS NOT IN DISPUTE THAT THE ASSESSEE DEPOSITED THE AMOUNT IN QUESTION BEFORE FI LING THE RETURN OF INCOME THEREFORE, IT WAS ALLOWABLE DEDUCTION UNDER SECTION 43B OF THE ACT. SIMILAR ISSUE HAS BEEN DECIDED VIDE ORDER DT. 29/03/2019 OF THIS BENCH OF THE TRIBUNAL IN ITA NO. 1243/CHD/2018 FOR THE A.Y. 2013-14 IN THE CASE OF M/S NEW TIME CONTRACTORS AND BUILDER (P) LTD. VS. DCIT WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 10 AND 11 OF THE SAID ORDER WHICH READ AS UNDE R: (10) WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH TH E 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 CONTRIBUTION OF PROVIDENT FUND AND ESIC. HOWEVER, IT IS ACCEPTED BY THE AO THAT THE DEPOSIT W AS MADE BEFORE FILING OF THE RETURN OF INCOME ON 27.09.2013. (11) ON A SIMILAR ISSUE THE HONBLE JURISDICTIONAL H IGH 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, THE ASSES SEE, FOR THE ASSESSMENT YEAR 2003-04, WAS ENTITLED TO DEDUCTION IN RESPECT OF TH E EMPLOYERS AND EMPLOYEES CONTRIBUTIONS TO THE EMPLOYEES STATE INSURANCE AND PROVIDENT FUND AS THE 4 CONTRIBUTIONS HAD BEEN DEPOSITED PRIOR TO THE FILIN G 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. 9.1 SIMILAR ISSUE HAS ALSO BEEN DECIDED BY THE HON' BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. NIPSO POLYFABRIKS LTD. [2013] 350 ITR 327 (SUPRA) WHEREIN IT HAS BEEN HELD AS UNDER: THE DELETION OF THE SECOND PROVISO TO SECTION 43B WHICH SPECIFICALLY MADE A REFERENCE TO SECTION 36(L)(VA) WAS CURATIVE IN NATU RE AND, HENCE, WOULD APPLY WITH RETROSPECTIVE EFFECT FROM APRIL 1, 1988. THE S ECOND PROVISO TO SECTION 43B(B) SPECIFICALLY REFERRED TO THE DUE DATE UNDER SECTION 36(L)(VA) OF THE ACT AND AS SUCH, IT CANNOT BE URGED THAT THE PROVISIONS OF SEC TION 43B AND SECTION 36(1)(VA) SHOULD NOT BE READ TOGETHER. THE LAW WAS ENACTED TO ENSURE THAT THE PAYMENT OF THE CONTRIBUTIONS TOWARDS THE PROVIDENT FUNDS, THE ESI FUNDS OR OTHER SUCH WELFARE SCHEMES MUST BE MADE BEFORE FURNISHING THE RETURN O F INCOME UNDER SUB-SECTION (1) OF SECTION 139. ON A CONJOINT READING OF SECTION 36(L)(VA) AND SECTION 43B IT IS OBVIOUS THAT EARLIER SECTION 43B MADE REFERENCE TO THE DUE DATE AS PRESCRIBED UNDER SECTION 36(1 )(VA). THERE WAS A CONFLICT BETW EEN THE FIRST AND THE SECOND PROVISOS AND THE SECOND PROVISO WAS DELETED. THE BENEFIT OF THIS AMENDMENT MUST BE EXTENDED TO THE EMPLOYEES' CONTRIBUTION ALS O. IT HAS FURTHER BEEN HELD AS UNDER: THAT WHEN THE EMPLOYER HAD NOT DEPOSITED THE CONTRIBUTION WITHIN THE TIME PRESCRIBED UNDER THE ACTS, HE MAY FACE CRIMINAL PR OSECUTION. HE MAY ALSO BECOME LIABLE TO PAY INTEREST OR PENALTY. HOWEVER, THAT WAS NO REASON TO DENY HIM THE BENEFIT OF SECTION 43B, WHICH STARTS WITH A NON OBSTANTE CLAUSE AND WHICH CLEARLY LAYS DOWN THAT THE ASSESSEE CAN TAKE THE BENEFIT OF DEDUCTION OF SUCH CONTRIBUTIONS, IF THEY ARE PAID BEFORE FURNISHING T HE RETURN. SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDERS OF THE ITAT, CHANDIGARH BENCH B AS WELL AS THE HON'BLE JURISDICTIONAL HIG H COURT, THE IMPUGNED ADDITION MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) IS DELETED. 10. IN ITA NO. 134/CHD/2021 FOR THE A.Y. 2019-20 TH E FACTS ARE IDENTICAL TO THE FACTS INVOLVED, IN ITA NO. 133/CHD/2021 FOR THE A.Y . 2018-19, THE ONLY DIFFERENCE IS 5 IN THE AMOUNT OF DISALLOWANCE MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A). THEREFORE OUR FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS FOR THIS APPEAL ALSO. 11. IN THE RESULT APPEALS OF THE ASSESSEE IS ALLOWE D. (ORDER PRONOUNCED IN THE OPEN COURT ON 05/08/2021 ) SD/- SD/- .. .., (R.L. NEGI ) ( N.K. SAIN I) $ %&/ JUDICIAL MEMBER ! / VICE PRESIDENT AG DATE: 05/08/2021 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE (+ $ BY ORDER, ; # ASSISTANT REGISTRAR