Chiphercloud India Private Limited, Hyderabad V. Income Tax Officer, Ward-1(2), Hyderabad

ITA 1367/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2167 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 29-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N ESTHER
• Assessee Lawyers: V G TARAK NATH
• Section: 43B; 201; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1367 /HYD./20 18 ASSESSMENT YEAR: 201 3 - 14 M/S CHIPHERCLOUD INDIA PRIVATE LTD. VS. ITO, WARD 1 ( 2 ) HYDERABAD HYDERABAD [PAN: AADCT6243J ] (APPELLANT) (RESPONDENT) FOR APPELLANT : SRI V.G. TARAKNATH , C.A. FOR RESPONDENT : S MT. N. ESTHER, DR DATE OF HEARING : 01 /0 6 /2021 DATE OF PRONOUNCEMENT : 29 /06/2021 O R D E R PER S.S. GODARA, J.M. THIS ASSESSEES APPEAL FOR A.Y. 201 3 - 14 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] - 1 , HYDERABADS ORDER DATED 17.05..2018 PASSED IN CASE NO. 0046 /201 8 - 19 IN PROCEEDINGS U/ S 14 3( 3 ) OF THE INCOME TAX ACT, 1961 [IN SHORT THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN ITS APPEAL. 2. THE LD.CIT(A) - 1 FAILED TO APPRECIATE THAT PAYMENT/CONTRIBUTION OF EMPLOYEES SHARE MADE TO THE PF & ESI AUTHORITY ANY TIME BEFORE THE DUE DATE OF FILING THE RETURN FOR THE YEAR ARE ELIGIBLE FOR DEDUCTION IN TERMS OF SEC.36(1)(VA) READ IN CONJUNCTION WITH SECTION 43B(B). ITA 1367/HYD/18 AY: 2013 - 14 M / S CHIPHERCLOUD INDIA PVT. LTD. 2 2 . THE LD.CIT(A) FAILED TO APPRECIATE THAT CBDT CIRCULAR NO.22/2015 CANNOT OVERRIDE THE PROVISIONS OF SECTION 43B AND, CONSEQUENTLY, THERE CANNOT BE DISALLOWANCE U/S 36(1)(VA). 2. COMING TO THE SOLE SUBSTANTIVE ISSUE OF ESI/PF DISALLOWANCE OF RS. 2,11,750/ - , THE ASSESSEES AND R EVENUES PLEA THAT THE SAME HAS BEEN PAID BEFORE THE DUE DATE OF FILING SEC. 139(1) RETURN AND AFTER THE DUE DATE PRESCRIBED IN THE CORRESPONDING STATUTES; RESPECTIVELY. WE NOTICE IN THIS FACTUAL BACK DROP THAT THE LEGISLATURE HAS NOT ONLY INCORPORATED NECESSARY AMENDMENT IN SECTIONS 36(VA) AS WELL AS 43B VIDE FINANCE ACT, 2021 TO THIS EFFECT BUT ALSO THE CBDT HAS ISSUED MEMORANDUM OF EXPLANATION THAT THE SAME APPLIES W.E.F. 1.4.2021 ONLY. IT IS F URTHER NOT AN ISSUE THAT THE FOREGOING LEGISLATIVE AMENDMENTS HAVE PROPOSED EMPLOYERS CONTRIBUTION / DISALLOWANCE U/S 43B AS AGAINST EMPLOYEE S CONTRIBUTION U/S 36 (VA) OF THE ACT; RESPECTIVELY. HOWEVER, KEEPING IN MIND THE FACT THAT THE SAME HAS BEE N CLARIFIED TO BE APPLICABLE ONLY WITH PROSPECTIVE EFFECT FROM 1.4.2021, WE HOLD THAT THE IMPUGNED DISALLOWANCE IS NOT SUSTAINABLE IN VIEW OF ALL THESE LATEST DEVELOPMENTS EVEN IF THE REVENUES CASE IS SUPPORTED BY THE FOLLOWING CASE LAW S . (I) CIT VS. MER CHEM LTD, [2015] 378 ITR 443(KER) ; (II) CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION (2014) 366 ITR 170 (GUJ.) ; (III) CIT VS. SOUTH INDIA CORPORATION LTD. (2000) 242 ITR 114 (KER) ; (IV.) CIT VS. GTN TEXTILES LTD. (2004) 269 ITR 282 (KER) ; (V) CIT VS. JAIRAM & SONS [2004] 269 ITR 285 (KER) THE IMPUGNED ESI/PF DISALLOWANCE IS DIRECTED TO BE DELETED THEREFORE. THIS ASSESSEES APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN OPEN COURT ON 29 /06/2021. SD/ - S D/ - (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 TH JUNE, 2021 ITA 1367/HYD/18 AY: 2013 - 14 M / S CHIPHERCLOUD INDIA PVT. LTD. 3 *GMV COPY OF ORDER FORWARDED TO: 1. M/S CIPHER C LOUD INDIA PRIVATE LIMITED, C/O M/S V.S.RAO & CO., CHARTERED ACCOUNTANTS, 6 - 3 - 609/136, ANANDNAGAR, HYDERABAD 500 004, TELANGANA 2. ITO, WARD 1 ( 2 ), HYDERABAD 3. JCIT, RANGE 1 , HYDERABAD 4 CIT(A) - 1 , HYDERABAD 5 PR.CIT - 1 , HYDERABAD . 6 D.R. ITAT HYDERABAD 7 GUARD FILE