Geekay Facility Management Private Limited, Mumbai V. Deputy Commissioner of Income Tax, Circle 3(1)(1), Mumbai, Mumbai

ITA 145/MUM/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1682 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2018-2019
• Appeal Filed On: 26-01-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 43B; 139(1); 13

Judgement Text

1 ITA 145/Mum/2022 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G”, MUMBAI BEFORE SHRI PRASHANT MAHARSHI (ACCOUNTANT MEMBER) AND SMT. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No.145/Mum/2022 (Assessment Year : 2018-19) Geekay Facility Management Private Limited, g-11, Tulsiani Chambers, Free Press Journal Marg, Nariman Point, Mumbai-400 021 PAN : AACCG1483G vs Deputy Commissioner of Income Tax, Circle 3(1)(1), Mumbai Income-tax Office, Maharshi Karve Road, New Marine Lines, Churchgate, Mumbai-400 020 APPELLANT RESPONDENT Assessee represented by Shri Gyaneshwar Kataram Department represented by Shri Hoshang B Irani ( DR) Date of hearing 26-05-2022 Date of pronouncement 29-07-2022 O R D E R Per : Kavitha Rajagopal (JM): This appeal has been filed by the assessee as against the order of Ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 29/11/2021, under section 250 pertaining to Assessment Year 2018-19. 2. The solitary issue involved in this appeal is the disallowance of Rs.30,93,567/- under section 36(1)(va) in respect of employees contribution to PF of Rs.26,36,808/-, ESIC of Rs.3,94,983/- and Labour Welfare Fund of Rs.61,776/-, 2 ITA 145/Mum/2022 despite the fact that the said contribution of the impugned amount of Rs.30,93,567/- has been paid before the due date of filing of the return of income. 3. The brief facts are that the assessee filed its return of income on 11/10/2018 under section 139(1) declaring total income of Rs.99,40,627/-. The assessee e-filed its tax audit report on 11/10/2018 in which it was noted that certain payments amounting to Rs.30,93,567/- with respect to contributions received from employees for various funds were deposited after due dates mentioned in the relevant Acts, but which were paid before the due date for filing of returns under section 139(1). The Assessing Officer disallowed the impugned amount on the ground that it was paid belatedly after the due date under the relevant Acts. Aggrieved by this, the assessee was in appeal before the Ld.CIT(A), who confirmed the addition made by the Assessing Officer / CPC. The assessee is in appeal before us as against the order of the lower authorities. 4. The Ld.AR for the assessee submitted that the impugned deposits, though was paid after due dates specified under the relevant Acts, but was paid before the due date for filing of return of income. The Ld.AR further stated that the lower authorities have failed to consider the decisions of Hon’ble jurisdictional High Court in the case of sister concern of the assessee, M/s Geekay Security Services Pvt Ltd vs Dy.CIT, Circle 3(1)(1) under Writ Petition No.1984 of 2018 dated 07/12/2018 and also without observing the principles of natural Justice. 5. The Ld.DR did not controvert the fact that the assessee has deposited the employees’ contribution of PF and ESI and the Labour Welfare Fund before the due date for filing the return of income. The Ld.DR relied upon the decision of the lower authorities. 3 ITA 145/Mum/2022 6. Having heard both the Learned representatives and perused the materials on record, we are of the considered opinion that the assessee had deposited the employees’ contribution to PF of Rs.26,36,808/-, ESIC of Rs.3,94,983/- and Labour Welfare Fund of Rs.61,776/- after the due date specified under the relevant Acts; nevertheless paid before the due date for filing of return of income under section 139(1) of the Act. We have also considered the plethora of judgements relied upon by both the sides. The disallowance of the impugned amount under section 36(1)(va) was on the basis of the report under clause 20(b) in the tax audit report. The issue pertaining to the disallowance under section 36(1)(va) was decided in favour of the assessee in the following cases:- 1. Principal CIT vs Rajasthan State Beverages Corporation Ltd (2017) 84 taxmann.com 185; 2. CIT vs Alom Extrusions Ltd (2009) 185 Taxman 416(SC) 3. CIT vs Hindustan Organics Chemicals Ltd 366 ITR 1 4. CIT vs Ghatge Patil Transports Ltd 368 ITR 749 (Bom) 5. CIT vs Black and Veatch Consulting Pvt Ltd in Income Tax Appeal No.865 of 2015 dated 07/02/2018. 7. Though the above cited judgements favoured the assessee’s claim of depositing the employees’ contribution to PF and ESIC before the due date of filing of return of income, the Ld.CIT(A) has not considered them. The Ld.CIT(A), on the other hand, relied upon the decision of Hon’ble Kerala High Court in the case of Popular Vehicles & Services (P) Ltd vs CIT (2018) 96 taxmann.com 13 (Kerala); CIT vs Gujarat State Road Transport Corporation (2014) 41 taxmann.com 100 (Gujarat); and CIT vs Merchem Management Services (India) Pvt Ltd vs DCITY (2018) 100 taxmann.com (Madras) which did not support the case of the assessee, though the jurisdictional High Court judgement was favouring the case of the assessee. Further to this, the Ld.CIT(A) has interpreted the amendment to 4 ITA 145/Mum/2022 Explanation to section 43B of Finance Bill 2021 applicable retrospectively even for assessment years prior to 2021-22. The Ld.CIT(A) has also held that the due date as per section 43B is deemed never to have applied for the purpose of employees’ contribution thereby confirming the addition / disallowance made by the Assessing Officer. 8. From the above observations, we are of the view that the Ld.CIT(A) has erred in holding a view contrary to the decision of the Hon’ble jurisdictional High Court. It is also pertinent to point out that the Hon’ble Apex Court in CIT VS Alom Extrusions Ltd (supra) has categorically held that section 43B applied to both employers as well as employees contribution. Furthermore, the co-ordinate bench of this Tribunal (‘H’ Bench) in the case of Kalpesh Systhetics Pvt Ltd vs Deputy Commissioner of Income Tax, CPC, Bangalore in ITA No.1785/Mum/2021 dated April 27, 2022, wherein it has been held as under:- “........In our considered view, it cannot be open to the Assessing Officer CPC to take a view contrary to the view taken by the Hon’ble jurisdictional High Court – more so, when his attention was specifically invited to the binding judicial precedents in this regard. For this reason also, the inputs in question in the tax audit report can not be reason enough to make the impugned disallowance. The assessee must succeed for this reason as well.” 9. Following the judicial precedents discussed above, we hold that the amendment brought about in the Finance Act, 2021 is only prospective and not retrospective and applies to assessment year 2022-23 and to subsequent assessment years thereto. Therefore, we are of the considered opinion that the contribution to PF, ESIC and Labour Welfare Fund paid after the specified due dates under the relevant Acts, nevertheless paid before the due date for filing the 5 ITA 145/Mum/2022 return of income is allowable. The Assessing Officer is directed to allow the deduction as claimed. 10. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 29/07/2022. Sd/- sd/- (PRASHANT MAHARSHI) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dt : 29/07/2022 Pavanan Copy to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. The CIT 5. The DR, C-Bench (True copy) By order Asst.Registrar / Sr.PS, ITAT, Mumbai Benches