M/s Swami Automotive Pvt. Ltd., Chandigarh V. ITO, W-2(1), Chandigarh

ITA 1436/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0662 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 16-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 43B; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 1436/CHANDI/2018 (ASSESSMENT YEAR: 2014-15) M/S SWAMI AUTOMOTIVE PVT. LTD. PLOT NO. 32, INDUSTRIAL AREA, PHASE- 1, CHANDIGARH VS. ITO WARD- 2 (1), CHANDIGARH APPELLANT RESPONDENT ASSESSEE BY : SHRI PARIKSHIT AGGARWAL, CA DEPARTMENT BY : SHRI MANJIT SINGH, CIT(DR) DATE OF HEARING :26/03/2019 DATE OF PRONOUNCEMENT :26/03/2019 O R D E R PER N.K. SAINI, VICE PRESIDENT : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 25.10.2018 OF LD. CIT(A)- 4, LUDHIANA (CAMP AT CHANDIGARH). (2) THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSI TION OF THE CASE, THE WORTHY CIT(A) IN APPEAL NO. 71/ROT(10665)CHD/IT/CIT(A)-4/L DH/2016-17 DATED 25.10.2018 HAS ERRED IN PASSING THAT ORDER IN CONTR AVENTION OF THE PROVISIONS OF S. 250(6) OF THE INCOME TAX ACT, 1961. 2. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE , WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS. 1,29,823/- U/S 36(1)(VA) OF THE ACT ON ACCOUNT OF PF/ESI (EMPLOYEES SHARE O F CONTRIBUTION) DEPOSITED LATE EVEN WHEN THE APPELLANT COMPANY DEPOSITED WHOLE OF SUCH AMOUNT ON OR BEFORE THE DUE DATE OF FILING OF ITR AND THE IMPUGNED ADDI TION MADE IS COMPLETELY CONTRARY TO THE DIRECT DECISION OF JURISDICTIONAL H IGH COURT IN THE CASE OF RAI AGRO INDUSTRIES LTD. ITA NO. 6363/2005 DTD. 30.11.2010 A ND ALSO OF HONBLE APEX COURT IN THE CASE OF ALOM EXTRUSIONS LTD. 319 ITR 306 (SC ). 3. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION , DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. (3) FROM THE ABOVE GROUNDS IT IS GATHERED THAT ONL Y GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENANCE OF ADDITION OF RS. 1,29,8 23/- MADE BY THE AO U/S 36(1)(VA) OF THE INCOME TAX ACT, 1961 (THE ACT FO R SHORT) ON ACCOUNT OF PF / ESI (EMPLOYEES SHARE OF CONTRIBUTION) DEPOSITED LATE B UT BEFORE FILING OF THE INCOME TAX RETURN. THE FACTS OF THE CASE IN BRIEF A RE THAT THE ASSESSEE FILED ITS PAGE 2 OF 3 RETURN OF INCOME ON 29.11.2014 DECLARING AN INCOME OF RS. 27,31,260/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. (4) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO NOTICED THAT THE ASSESSEE MADE THE FOLLOWING PAYMENTS OF THE EMPLOYE ES CONTRIBUTION TO THE EPF / ESIC AFTER DUE DATE: EMPLOYEES CONTRIBUTION TO EPF/ESIC (RS.) DUE DATE OF PAYMENT ACTUAL DATE OF PAYMENT 53138 20.05.2013 21.05.2013 43810 20.11.2013 21.11.2013 32875 20.03.2014 21.03.2014 TOTAL RS. 1,29,823/- (4.1) THE AO MADE THE ADDITION OF THE AFORESAID AMO UNT BY INVOKING THE PROVISIONS OF SECTION 36(1)(VA) R.W.S. 43B OF THE A CT. (5) BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION MADE BY THE AO BY OBSERVING IN PARA 6.2 OF THE IMPUGNED ORDER AS UNDER: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE DELAYED PAYMENTS OF EPF IS RESPECT OF SUM OF RS. 1,29,823/- . THE ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTION 36(I)(VA) OF THE INCOME TAX ACT,1961 MADE ADDITION OF RS. 1,29,823/-. DURING THE APPEAL PROCE EDINGS, IT WAS EXPLAINED BY THE LD. COUSEL THAT APPELLANT HAD PAID EPF BEFORE THE D UE DATE OF FILING OF RETURN AND PROVISION OF SEC 43B WERE AMENDED TO REDRESS THE DI FFICULTIES FACED BY THE APPELLANT. DURING APPEAL PROCEEDINGS, THE LD. COUNSEL HAS PLAC ED RELIANCE ON JUDGMENTS OF P & H HIGH COURT AND SUPREME COURT SUC H AS MENTIONED IN GIVEN SUBMISSIONS WHEREIN THE HONBLE PUNJAB & HARYANA HI GH COURT DISMISSED REVENUE APPEALS AGAINST THE ORDER OF LOWER AUTHORIT IES WHO HAVE ALLOWED DEDUCTION SINCE IN BOTH THE CASES THE PAYMENT OF EM PLOYEES CONTRIBUTION OF ESI AND PF WERE MADE WITHIN THE GRACE PERIOD OF FIVE DA YS ALLOWED UNDER THE RESPECTIVE ACTS. THEREFORE, THE FACTS OF THE CASES REFERRED BY THE LD. COUNSEL ARE DISTINGUISHABLE. IN THE CASE OF ASSESSEE THE PAYMEN TS WERE MADE BEYOND THE GRACE PERIOD ALLOWED UNDER THE ESI AND PF ACT. THER EFORE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS UPHELD. (6) THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRA NSPORT CORPORATION REPORTED AT [2014] 366 ITR 170 (GUJ). (7) NOW, THE ASSESSEE IS IN APPEAL. PAGE 3 OF 3 (8) THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE CONTRIBUTION TO PF/ESI WAS DEPOSITED BEFORE FILING THE RETURN OF INCOME. T HEREFORE, THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF CIT VS. HEMLA EMBROYDERY MILLS (P.) LTD. [2014] 366 ITR 167 (P&H) . (9) IN HIS RIVAL SUBMISSIONS, THE LD. CIT(DR) STRON GLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. (10) WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE 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 CONTRI BUTION OF PROVIDENT FUND AND ESIC. HOWEVER, FROM THE DETAILS GIVEN IN THE FO RMER PART OF THIS ORDER, IT IS NOTICED THAT DELAY WAS ONLY OF ONE DAY ON THREE OCC ASIONS, BUT THE DEPOSIT WAS MADE MUCH BEFORE FILING THE RETURN OF INCOME ON 29. 11.2014. (11) ON A SIMILAR ISSUE THE HONBLE JURISDICTIONAL HIGH 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, TH E ASSESSEE, FOR THE ASSESSMENT YEAR 2003-04, WAS ENTITLED TO DEDUCTION IN RESPECT OF THE EMPLOYERS AND EMPLOYEES CONTRIBUTIONS TO THE EMPLOYEES STATE IN SURANCE AND PROVIDENT FUND AS THE CONTRIBUTIONS HAD BEEN DEPOSITED PRIOR TO TH E FILING OF THE RETURN UNDER SECTION 139(1). SO RESPECTFULLY FOLLOWING THE RATIO LED DOWN BY TH E HONBLE JURISDICTIONAL HIGH COURT IN THE REFERRED TO CASE, THE IMPUGNED AD DITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS DELETED. (12) IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 26/ 03/2019). SD/- SD/- (SANJAY GARG) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDE NT DATED : 26/03/2019 BCG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR