Deputy Commissioner of Income tax, Nashik V. Gulab Ramlalit Tripathi, Nashik

ITA 1377/PUN/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7738 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 30-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 139

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIK AS AWASTHY, JM . / ITA NO. 1377 /PUN/ 201 7 / ASSESSMENT YEAR : 20 13 - 14 DCIT, CIRCLE - 2, NASHIK . / APPELLANT VS. SHRI GULAB RAMLALIT TRIPATHI, A - 1, ROOPSHREE APARTMENT, DINDORI ROAD, PANCHVATI, NASHIK 422003 PA N: ACJPT1557C . / RESPONDENT ASSESSEE BY : SHRI S ANKET J OSHI REVENUE BY : SHRI ACHAL SHARMA / DATE OF HEARING : 20 .0 6 . 2018 / DATE OF PRONOUNCEMENT: 27 . 0 6 .2018 / ORDER PER D. KARUN AKARA RAO , AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2 , NASHIK , DATED 02.03.2017 FOR THE ASSESSMENT YEAR 20 13 - 14 . 2. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SUPPLY OF SECURITY FORCE AND LABOUR. THE ASSESSEE FILED RETURN OF INCOME ON 16.09.2013 DECLARING TOTAL INCOME OF RS.50,09,288/ - . THE CASE OF ASSESSEE WAS SELECTED MANUALLY FOR SCRUTINY. NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS ISSUED TO THE ASSESSEE. DURING THE COURSE OF ITA NO. 1377 /PUN/201 7 GULAB R. TRIPATHI 2 ASSESSMENT PROCEEDINGS, THE AR WAS ASKED TO GIVE SUBMISSION WITH REGARD TO LATE PAYMENT OF EMPLOYEES CONTRIBUTION OF PF AND ESIC BY CREDITING INTO THEIR RESPECTIVE ACCOUNTS. THE AR H AD GIVEN ITS DETAILED SUBMISSIONS. AFTER CONSIDERING THE SUBMISSIONS OF AR AND RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS, THE ASSESSING OFFICER DISALLOWED SUM OF RS.74,69,400/ - FOR LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AND ESIC AND ADDED BACK TO THE TOTAL INCOME OF ASSESSEE. 3. THE CIT(A) AFTER CONSIDERING VARIOUS SUBMISSIONS FILED BY THE ASSESSEE AND DECISIONS OF VARIOUS JUDICIAL FORUMS PARTICULARLY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GHATGE PATIL TRANSPORTS LTD. IN ITA NOS.1002 & 1034 OF 2012, ORDER DATED 14.10.2014, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PF AND ESIC. 4. HOWEVER, NOT SATISFIED WITH THE SAID ORDER OF CIT(A), THE REVENUE IS IN APPEAL WITH SOLITARY GROUND , WHICH IS AS UNDER: - I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - 2 , NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS.74,69,400/ - ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PF AND E SIC? 5. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) IN CONNECTION WITH THE ADDITION OF RS.74,69,400/ - , THE AMOUNT PAID TOWARDS EMPLOYEES CONTRIBUTION TO PF AND ESIC. ON THIS ISSUE, THE LEARNED COUNSEL FOR ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION ON THIS ACCOUNT AS PER DISCUSSION GIVEN IN PARA 5 AND ITS SUB - PARAGRAPHS. THE ASSESSING OFFICER MENTIONED THAT THE ASSESSEE FAILED TO PAY EMPLOYEES CONTRIBUTION TO PF AND ESIC IN TIME AS SPECIFIED IN ITA NO. 1377 /PUN/201 7 GULAB R. TRIPATHI 3 RESPECTIVE ACTS / RULE S . THERE IS A DELAY AND THE DETAILS OF DELAY ARE DISCUSSED IN PARA 5.1.9 OF HIS ORDER. FOR THE SAKE OF CLARITY, THE CONTENTS OF PARA 5.20 ARE EXTRACTED HEREUNDER: - 5.20 SO, THE TOTAL AMOUNT OF RS.74,69,400/ - [RS.69,67,177/ - + RS.5,02,223/ - ] FOR LATE PAY MENT OF EMPLOYEES CONTRIBUTION TO PF AND ESIC IS HEREBY DISALLOWED U/S 36(1)(VA) AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS ABOUT ITS INCOME ON THIS ISSUE AND HENCE PENALTY U/S 271(1)(C) IS LEVIAB LE. ACCORDINGLY, PENALTY U/S 271(1)(C) IS INITIATED. 6. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THERE IS NO DISPUTE ABOUT PAYMENTS /SUBSCRIPTION TO THE SAID FUNDS BEFORE FILING OF RETURN OF INCOME SPECIFIED UNDER SECTION 139( 1) OF THE ACT. THE ASSESSEE FILED THE RETURN OF INCOME ON 30.09.2013 AND ALL THE PAYMENTS WERE MADE BY THAT DATE. IN VIEW OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GHATGE PATIL TRANSPORTS LTD. IN ITA NOS.1002 & 1034 OF 2012, ORDER DATED 14. 10.2014 AND MANY OTHER S, CLAIM OF THE ASSESSEE SHOULD BE ALLOWED. ON CONSIDERING THE SAID SUBMISSIONS OF ASSESSEE, THE CIT(A) AS PER DISCUSSION IN PARA 7 OF HIS ORDER ALLOWED THE APPEAL OF ASSESSEE ON THIS ISSUE. 7. AT THE OUTSET, THE LEARNED COUNSEL F OR ASSESSEE SUBMITTED THAT THERE IS NO DISPUTE ABOUT THE PAYMENTS TO SUBSCRIPTIONS OF PF AND ESIC BEFORE FILING THE RETURN OF INCOME ON 30.09.2013. FURTHER, APPLICABILITY OF JUDGMENT IN THE CASE OF CIT VS. GHATGE PATIL TRANSPORTS LTD. (SUPRA) IS ALSO UNDI SPUTED. WE FIND THAT THE SAID JUDGMENT IS RIGHTLY APPLICABLE TO THE FACTS OF THE PRESENT CASE, WHEREIN IT WAS HELD AS UNDER: - 14. FROM A READING OF ABOVE, IT IS CLEAR THAT THE EMPLOYER - ASSESSEE WOULD BE ENTITLED TO DEDUCTION ONLY IF THE CONTRIBUTION TO T HE EMPLOYEE'S WELFARE FUND STOOD CREDITED ON OR BEFORE THE DUE DATE AND NOT OTHERWISE. IT TRANSPIRES THAT INDUSTRY ONCE AGAIN MADE REPRESENTATIONS TO THE MINISTRY OF FINANCE TO REMOVE THIS ANOMALY. THE RESULT WAS THAT AN ITA NO. 1377 /PUN/201 7 GULAB R. TRIPATHI 4 AMENDMENT WAS INSERTED WHICH CAME INTO FORCE WITH EFFECT FROM 1 ST APRIL, 2004 AND TWO CHANGES WERE MADE IN SECTION 43B FIRSTLY BY DELETING THE SECOND PROVISO AND FURTHER AMENDMENT IN THE FIRST PROVISO WHICH READS AS UNDER: - PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB - SECTION (1) OF SECTION 139 IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FURNISHED BY THE ASSESSEE ALONG WITH SUCH RETURN. 15. IN THIS MANNER, THE AMENDMENT PROVIDED BY FINANCE ACT, 2003 PUT ON PAR THE BENEFIT OF DEDUCTIONS OF TAX, DUTY, CESS AND FEE ON THE ONE HAND WI TH CONTRIBUTIONS TO VARIOUS EMPLOYEES' WELFARE FUNDS ON THE OTHER. ALL THIS CAME UP FOR CONSIDERATION BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF ALOM EXTRUSIONS LTD. (SUPRA). THE TRIBUNAL IN THE CASE AT HAND RELIED UPON THE SAID JUDGMENT. THERE IS N O REASON TO FAULT THE ORDER PASSED BY THE TRIBUNAL. WE ARE OF THE VIEW THAT THE DECISION OF THE SUPREME COURT IN ALOM EXTRUSIONS LTD. APPLIES TO EMPLOYEES' CONTRIBUTION AS WELL AS EMPLOYERS CONTRIBUTION. QUESTION NOS.2, 3 & 4 ARE ACCORDINGLY ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 8. THEREFORE, THIS IS UNDISPUTED FACT THAT THE DELAYED PAYMENTS WERE PAID BY THE ASSESSEE WELL WITHIN THE TIME SPECIFIED UNDER SECTION 139(1) OF THE ACT. THE CITED DECISION IS SQUARELY APPLICABLE TO THE FA CTS OF THIS CASE AND IN FAVOUR OF THE ASSESSEE. HENCE, W E FIND THAT THE ORDER OF CIT(A) IS DETAILED AND REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE FROM OUR SIDE. 9 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 27 TH D A Y OF JUNE , 2018. SD/ - SD/ - ( VIKAS AWASTHY ) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE ; DATED : JUNE , 2018 GCVSR ITA NO. 1377 /PUN/201 7 GULAB R. TRIPATHI 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A ) - 2 , NASHIK 4. THE PR CIT - 2 , NASHIK 5. , , SMC PUNE; 6. / GUARD FILE .