Suryauday Spinning Mills Private Limited , Secunderabad V. Deputy Commissioner of Income Tax ,Circle-3(2), Hyderabad

ITA 157/Hyd/2021

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5260 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-04-2021
• Assessment Year: 2018-2019
• Appeal Filed On: 18-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SIDHARTH TOSHNIVAL
• Keywords: Tax effect
• Section: 43B; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH : HYDERABAD (THROUGH VIDEO CONFERENC E ) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 1 57 /HYD./20 2 1 ASSESSMENT YEAR: 20 1 8 - 19 M/S SURYAUDAY SPINNING MILLS PVT. LTD. VS. DY.CIT SE CUNDERABAD CIRCLE 3(2) HYDERABAD [ PAN: AAICS 5765K ] (APPELLANT) (RESPONDENT) FOR ASSESSEE : SRI SIDHARTH TOSH NIVAL , ADV . FOR REVENUE : SRI SUNIL KUMAR PANDEY, D.R. DATE OF HEARING : 12 / 04 /202 1 DATE OF PRONOUNCEMENT 03 / 0 5 /202 1 O R D E R THIS IS ASSESSEES APPEAL FOR AY 2018 - 19 AGAINST THE ORDER OF THE CIT(A) - 3, HYDERABAD DATED 24.09.2020. 2 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY, FILED ITS RETURN OF INCOME FOR THE A.Y. 2018 - 19 ON 01.10. 2018 A DMITTING TOTAL INCOME OF RS.32, 90 ,560/ - . THE RETURN WA S INITIALLY PROCESSED U /S 143 (1) OF THE INCOME TAX ACT, 1961 [ FOR SHORT THE ACT ] BY THE A SSESSING O FFICER AT CPC, B ENGALURU BY MAKING DISALLOWANCE OF RS. 9 , 88 , 983 / - BEING THE DELAYED PAYMENT OF PF AND ESI. AGAINST THE SAME , ASSESSEE FILED AN APPEAL BEFORE THE CIT (A PPEALS ) , STATING THAT THE EMPLOYEES CONTRIBUTION TO PF AND ESI WAS DEPOSITED BEYOND THE DUE DATE , BUT BEFORE FILING OF RETURN OF INCOME. ASSESSEE RELIED UPON THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE CIT VS. ALOM EXTRUSIONS LTD. (2009) 319 ITR 306 (SC ) IN SUPPORT OF ITS CLAIM OF DEDUCTION. ITA NO. 157/HYD/2021 AY 2018 - 19 M/S SURYAUDAY SPINNING MILLS PVT.LTD. 2 2.1. THE CIT( A ) , HOWEVER , HELD THAT IN THE CASE OF ALOM EXTRUSIONS (SUPRA), THE HONBLE SUPREME COURT HAS NOT LAID DOWN ANY PROPOSITION OF LAW WITH REGARD TO ALLOWABILITY OF DEDUCTION IN RESPECT OF BELATED PAYMENT OF EMPLOYE E S CONTRIBUTION TO PF AND ESI AND THEREFORE , IT IS NOT APPLICABLE TO ASSESSEES CASE. THE CIT (A) , ACCORDINGLY CONF IRMED THE ORDER OF THE A SSESSING OFFICER . 2.2. ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL. PERTAINING TO DISALLOWANCE U/S 36(1)(VA) : TAX EFFECT5: RS.3,05,595/ - 1. THE LDCIT(A) ERRED IN CONFIRMING ADDITION OF RS. 9,88,983/ - MADE BY THE ASSESSING OFFICER U/S 36(1)(VA) OF THE ACT BY DISALLOWING DEDUCTION OF EMPLOYEES CONTRIBUTION TO PF AND ESI BUT NOT CREDITED TO EMPLOYEES ACCOUNT BEFORE DUE DATE 2. THAT THE LDCIT(A) ERRED IN NOT CONSIDERING THE FACT IN VIEW OF THE DECISION OF JURISDICTIONAL ITAT ON THE SAME ISSUE, DISALLOWANCE CANNOT BE MADE WHEN THE AMOUNT IS CREDITED IN THE RELEVANT ACCOUNT BEFORE DUE DATE OF FILING OF RETURN OF INCOME. 3. LD.COUNSEL FOR ASSESSEE SUBMITTED TH AT SIMILAR ISSUE HAS COME UP BEFORE THIS TRIBUNAL IN A NUMBER OF CASES WHERE IN THE COORDINATE BENCH ES OF THIS TRIBUNAL HA VE FOLLOWED THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF ALOM E X TRUSIONS (SUPRA) TO ALLOW THE DEDUCTION IN THE CASE OF THE EMPLOYEE S CONTRIBUTION TO PF AND ESI ALSO I F THE SAME WAS REMITTED TO RELEVANT ACCOUNT BEFORE THE DATE OF FILING OF THE RETURN OF INCOME. HE SUBMITTED THAT THE DEPARTMENT HAS BROUGHT IN THE AMENDMENT TO SECTI ON 43B WITH EFFECT FROM ASSESSMENT YEAR 2020 - 21 AND THEREAFTER, EMPLOYEES CONTRIBUTION TO PF AND ESI WILL NOT BE ALLOWED IF IT IS NOT PAID BEFORE THE DUE DATE OF RELEVANT A CT. HE HAS FILED BEFORE THE TRIBUNAL A COPY OF THE NOTE ON C LAUSES EXPLAINING CL A USE ( VIII ) OF THE A CT WHICH SEEKS TO AMEND SECTION 36 (1)(VA) OF TH E ACT AND IT HAS BEEN MENTIONED THAT THE AMENDMENT WILL BE EFFECTIVE FROM 01 ST APRIL 2021 I.E. FOR ASSESSMENT YEAR 2021 - 22 O NWARDS. ITA NO. 157/HYD/2021 AY 2018 - 19 M/S SURYAUDAY SPINNING MILLS PVT.LTD. 3 4. LD.DR HO WEVER RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 5. HA VING REGARD TO RIVAL CONTENTIONS AND THE MATERIAL PL ACED ON RECORD , I NOTICE THAT THE ISSUE IS COVERED IN FAVO U R OF THE ASSESSEE BY VARIOUS DECISIONS OF THE TRIBUNAL WHICH HAVE IN TURN FOLLOWED THE DECISION OF HON B LE SUPREME COURT IN THE CASE OF ALOM EXTRUSIONS. THEREFORE, I DEEM IT FIT AND PROPER TO DIRECT THE A SSESSING OFFICER TO ALLOW THE D EDUCTION IN CASE EMPLOYE E S CONTRIBUTION TO PF END ESI ALSO IF IT HAS BEEN PAID ON OR BEFORE THE DATE OF FILING OF THE RETURN OF INCOME. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 03 /0 5 / 202 1 . SD/ - (P. MADHAVI DEVI) JUDICIAL MEMBER DATED: 03 RD APRIL, 2021 GMV COPY OF ORDER FORWARDED TO: 1. M/S SURYAUDAY SPINNING MILLS PVT.LTD . C/O SIDHARTH TOSHNIVAL, ADVOCATE, 3 - 5 - 144/5, EDEN GARDEN, HYDERABAD 500 001, TELANGANA. 2. DY.CIT, CIRCLE 3(2), HYDERABAD . 3. DY. CIT, CPC, BENGALURU 4. ACIT, RANGE 3 , HYDERABAD. 5 . CIT(A) - 3 , HYDERABAD. 6. PR.CIT - 1 , HYDERABAD 7 D.R. ITAT HYDERABAD 8 . GUARD FILE