M/s. Sky Bird Infotech Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1365/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61721 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 24-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURJANI MOHANTY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) SHRI U.B.S. BEDI, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.1365/DEL./2012 (ASSESSMENT YEAR : 2006-07) M/S. SKY BIRD INFOTECH PVT. LTD., VS. ITO, WARD 8 (4), M 79, 2 ND FLOOR, M BLOCK MARKET, NEW DELHI. GREATER KAILASH PART II, NEW DELHI 110 048. (PAN : AAGCS8437G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HARPREET SINGH, CA REVENUE BY : SMT. SURJANI MOHANTY, DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE CIT (APPEALS)-XI, NEW DELHI DATED 31.01.2012 FOR THE AS SESSMENT YEAR 2006-07. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY. 3. THE ONLY ISSUE INVOLVED IN THE APPEAL IS NOT ALL OWING THE CLAIM IN RESPECT OF RS.1,00,554/- BEING THE DISALLOWANCE MAD E IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2006-07 IN RESPECT OF LATE DEPO SIT OF EMPLOYEES CONTRIBUTION OF PROVIDENT FUND AND ESI. ASSESSEE C LAIMS THAT IT WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN, HENCE ALLO WABLE IN VIEW OF THE DECISION ITA NO.1365/DEL./2012 2 OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. AIMIL LTD. REPORTED IN 229 CTR 448 AND HON'BLE SUPREME COURT I N THE CASE OF CIT VS. VINAY CEMENTS LIMITED REPORTED IN 213 CTR 286 (SC). 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE F IND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. AIMIL LIMITED AND ALSO THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VINAY CEMENTS LIMITED, CITED SUPRA. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. AIMIL LIMITED, CITED SUPRA, HAS HELD AS UNDER :- AS SOON AS EMPLOYEES' CONTRIBUTION TOWARDS PF OR E SI IS RECEIVED BY THE ASSESSEE BY WAY OF DEDUCTION OR OTH ERWISE FROM THE SALARY/WAGES OF THE EMPLOYEES, IT WILL BE TREATED AS 'INCOME' AT THE HANDS OF THE ASSESSEE. IT CLEARLY F OLLOWS THEREFROM THAT IF THE ASSESSEE DOES NOT DEPOSIT THI S CONTRIBUTION WITH PF/ESI AUTHORITIES, IT WILL BE TAXED AS INCOME AT THE HANDS OF THE ASSESSEE. HOWEVER, ON MAKING DEPOSIT WITH TH E CONCERNED AUTHORITIES, THE ASSESSEE BECOMES ENTITLE D TO DEDUCTION UNDER THE PROVISIONS OF S. 36(1)(VA). SEC . 43B(B), HOWEVER, STIPULATES THAT SUCH DEDUCTION WOULD BE PE RMISSIBLE ONLY ON ACTUAL PAYMENT. THIS IS THE SCHEME OF THE A CT FOR MAKING AN ASSESSEE ENTITLED TO GET DEDUCTION FROM I NCOME INSOFAR AS EMPLOYEES' CONTRIBUTION IS CONCERNED. DE LETION OF THE SECOND PROVISO HAS BEEN TREATED AS RETROSPECTIV E IN NATURE AND WOULD NOT APPLY AT ALL. THE CASE IS TO BE GOVER NED WITH THE APPLICATION OF THE FIRST PROVISO. IF THE EMPLOYEES' CONTRIBUTION IS NOT DEPOSITED BY THE DUE DATE PRESCRIBED UNDER T HE RELEVANT ACTS AND IS DEPOSITED LATE, THE EMPLOYER NOT ONLY P AYS INTEREST ON DELAYED PAYMENT BUT CAN INCUR PENALTIES ALSO, FO R WHICH SPECIFIC PROVISIONS ARE MADE IN THE PROVIDENT FUND ACT AS WELL AS THE ESI ACT. THEREFORE, THE ACTS PERMIT THE EMPL OYER TO MAKE THE DEPOSIT WITH SOME DELAYS, SUBJECT TO THE A FORESAID SEQUENCES. INSOFAR AS THE IT ACT IS CONCERNED, THE ASSESSEE CAN GET THE BENEFIT IF THE ACTUAL PAYMENT IS MADE BEFOR E THE RETURN ITA NO.1365/DEL./2012 3 IS FILED. CIT VS.VINAY CEMENT LTD., (2007) 213 CTR (SC) 268, CIT VS. DHARMENDRA SHARMA (2007) 213 CTR (DEL) 609 : (2008) 297 ITR 320 (DEL) AND CIT VS. P.M. ELECTRONI CS LTD. (2008) 220 CTR (DEL) 635 : (2008) 15 DTR (DEL) 258 FOLLOWED. IN VIEW OF THE DECISION, THE DEDUCTION OF PAYMENT O F EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI CANNOT BE DISALLOWED UNDER SECTION 43B, IF PAID BEFORE THE DUE DATE OF FILING THE RETURN. IN VIEW OF THIS FACT, WE ALLOW THE ASSESSEES APPEAL. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF MAY, 2012. SD/- SD/- (U.B.S. BEDI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 31 ST DAY OF MAY, 2012 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.