Amir Apparels, Ludhiana V. ITO Ward-VII(1), Ludhiana

ITA 137/CHANDI/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6741 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 04-06-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KHANNA CIT
• Assessee Lawyers: NAVNEET SEHGAL
• Keywords: Retrospective amendment
• Section: 43B; 143(1); 201; 139(1); 9(1); 9(1); 9(1); 13

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 NO. 137/CHD/2021 ASSESSMENT YEAR : 2019-20 AMIR APPARELS 1446/10, RAJPURA ROAD CHHOTTI HAIBOWAL LUDHIANA THE ITO WARD VII(I) LUDHIANA (PUNJAB) PAN NO: AAEFA8995L APPELLANT RESPONDENT !' ASSESSEE BY : SHRI NAVNEET SEHGAL, CA #!' REVENUE BY : SHRI ASHOK KHANNA, ADDL. CIT $ %! & DATE OF HEARING : 23/08/2021 '()*! & DATE OF PRONOUNCEMENT : 23/08/2021 %'/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT, 05/04/2021 OF THE LD. CIT(A) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS: 1. THAT THE PREJUDICIAL OBSERVATIONS MADE IN THE APPEL LATE ORDER AND THE ASSESSMENT ORDER ARE EITHER UNFOUNDED OR THE SAME ARE NOT SUSC EPTIBLE OF GIVING RISE TO ANY ADVERSE CONCLUSION. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS. 1,09,260/- ON ACCOUN T OF LATE DEPOSIT OF EMPLOYEES CONTRIBUTION TO ESI AND EPF ON THE BASIS OF CONJECT URES, SURMISES AND WITHOUT APPRECIATING THE FACTS OF THE CASE AND THE PROVISIONS OF THE ACT AS APPLICABLE DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR AND ON DATE OF FILI NG OF INCOME TAX RETURN. THE ADDITION MERITS DELETION. 3. THAT THE ACTION OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) IN CONFIRMING THE ADDITION OF RS. 1,09,260/- ON ACCOUN T OF LATE DEPOSIT OF EMPLOYEES CONTRIBUTION TO ESI AND EPF IS ARBITRARY, UNWARRANT ED AND UNCALLED FOR. THE ADDITION MERITS DELETION. 4. THAT THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER OR AMEND GROUNDS OF APPEAL. 2 5. THAT THE APPELLATE AS WELL AS THE ASSESSMENT ORDER ARE AGAINST LAW & FACTS OF THE CASE. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. WHIL E ISSUING THE INTIMATION ORDER UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED TO AS ACT) DISALLOWED THE SUM OF RS. 1,09,620/- ON ACCOUNT OF DEL AYED PAYMENT OF EMPLOYEES CONTRIBUTION TO ESI & PROVIDENT FUND, BY INVOKING THE PR OVISIONS OF SECTION 36(1)(VA) OF THE ACT. 4. 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 UNDER SECTION 139(1) O F 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 ASSESSEE AND SUSTAINED THE ADDITION M ADE BY THE A.O. THE RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. STATE ROAD TRANSPORT CORPORATION REPORTED AT (2014) 41 TAX MANN.COM 100. 5. NOW THE ASSESSEE IS IN APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A SSESSEE DEPOSITED THE IMPUGNED AMOUNT BEFORE FILING THE RETURN UNDER SECTION 13 9(1) OF THE ACT, THEREFORE, THE DISALLOWANCE MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. 7. IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORT ED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE I T IS NOT IN DISPUTE THAT THE ASSESSEE DEPOSITED THE AMOUNT IN QUESTION BEFORE FILIN G THE RETURN OF INCOME THEREFORE, IT WAS ALLOWABLE DEDUCTION UNDER SECTION 43B OF THE ACT . IT IS NOTICED THAT A SIMILAR ISSUE HAVING IDENTICAL FACTS HAS BEEN DECIDED VIDE ORDER DT. 05/08/2021 OF THIS BENCH OF THE TRIBUNAL IN ITA NO. 133 & 134/CHD/2021 FOR THE A.Y. 201 8-19 & 2019-20 IN THE CASE OF HOTEL SURYA VS. DCIT WHEREIN THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 9 AND 9.1 OF THE SAID ORDER WHICH READ AS UNDER: 3 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 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 SECTIO N 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: 4 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. SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DT. 05/08/2021 OF THE ITAT, CHANDIGARH BENCH B IN THE CASE OF HOTEL SURYA VS. DCIT (SUPRA), THE IMPUGNED ADDITION MADE BY THE A.O. AND SUSTAINED BY THE LD. CIT(A ) IS DELETED. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 23/08/2021 ) SD/- SD/- .. .., (R.L. NEGI ) ( N.K. SAIN I) $ %&/ JUDICIAL MEMBER ! / VICE PRESIDENT AG DATE: 23/08/2021 (+! ,-.- 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