Vektra Engineering Pvt. Ltd., , Kolkata V. ACIT, Central Circle - 2(4), Kolkata , Kolkata

ITA 1584/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4770 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 05-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MURMU
• Assessee Lawyers: A K TIBREWAL
• Keywords: Retrospective amendment; Condonation of delay
• Section: 43B; 143(3); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM ITA NO.1584/KOL/2017 (A.Y: 2008-09) VEKTRA ENGINEERING PVT. LTD., 10/1D, LAL BAZAR STREET, MERCANTILE BUILDING, 3 RD FLOOR, KOLKATA-700001. VS. A.C.I.T, CENTRAL CIRCLE-2(4) AYAKAR BHAWAN POORVA, 110, SHANTIPALLY, 4 TH FLOOR, KOLKATA-700107. ./ ./PAN/GIR NO. : AACCV 0867 B ( /APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY : SHRI A.K.TIBREWAL, FCA & SHRI AMIT AGARWAL, ADVOCATE RESPONDENT BY : SHRI N.MURMU, JCIT / DATE OF HEARING : 19/07/2018 /DATE OF PRONOUNCEMENT :10/10/2018 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2008-09, IS DIRECTED AGAINST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, KOLKATA, IN APPEAL NO.1017/CIT(A)-2/14-15 DATED 17.04.2017, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT), DATED 26.11.2010. 2. THE GRIEVANCE RAISED BY THE ASSESSEE ARE AS FOLLOWS : 1) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISMISSING THE APPEAL REJECTING THE APPELLANTS PETITION FOR CONDONATION OF DELAY IN FILING THE APPEAL BEFORE HIM. 2) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLEGING THAT THERE WAS GROSS NEGLIGENCE, INACTION AND LATCHES ON THE PART OF THE ASSESSEE AND HIS AUTHORISED REPRESENTATIVE AND ON THE BASIS OF SUCH ALLEGATIONS HE REFUSED TO CONDONE THE DELAY AND DID NOT PASS ANY ORDER ON THE GROUNDS OF APPEAL AGAINST THE ADDITION OF RS.2,50,702/- MADE BY THE ASSESSING OFFICER UNDER SECTION 43B OF THE ACT. 3) THAT THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS) IS AGAINST LAW AND FACTS OF THE CASE. VEKTRA ENGINEERING PVT. LTD. ITA NO.1584/KOL/2017 A.Y: 2008-09 2 3. THE FACTS OF THE CASE WHICH CAN BE STATED BRIEFLY ARE AS FOLLOWS. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THERE WAS A DELAY IN DEPOSITING EMPLOYEES CONTRIBUTION TO PF OF RS.2,25,177/- AND EMPLOYEES CONTRIBUTION TO ESI OF RS. 25,525/- THEREFORE, THE AO MADE ADDITION U/S 43B OF THE ACT TO THE TUNE OF RS.2,50,702/- ( RS.2,25,177 + RS. 25,525). 4. AGGRIEVED BY THE STAND TAKEN SO TAKEN BY THE LD AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A), WHO DISMISSED THE APPEAL OF THE ASSESSEE. THE LD. CIT(A) NOTED THAT THERE WAS A DELAY IN FILING THE APPEAL BEFORE HIM AND THE DELAY HAD NOT BEEN EXPLAINED BY THE ASSESSEE PROPERLY. THEREFORE, THE LD. CIT(A) DID NOT CONDONE THE DELAY IN FILING THE APPEAL AND WITHOUT DISCUSSING THE APPEAL ON MERIT DISMISSED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE ASSESSEE HAS DEPOSITED THE PF ON OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. TO SUBSTANTIATE HIS CLAIM THE ASSESSEE SUBMITTED A CHART SHOWING THE DATE OF PAYMENTS OF PF ON VARIOUS DATES WHICH ARE GIVEN BELOW :- VEKTRA ENGINEERING PVT. LTD. ITA NO.1584/KOL/2017 A.Y: 2008-09 3 SO FAR THE PAYMENT OF ESI IS CONCERNED, THE LD. COUNSEL HAS SUBMITTED BEFORE US THAT PAYMENT OF ESI HAS ALSO BEEN MADE ON OR BEFORE FILING THE RETURN OF INCOME. TO SUBSTANTIATE HIS CONTENTION, THE LD. COUNSEL SUBMITTED BEFORE US A CHART SHOWING THE PAYMENT OF EMPLOYEES STATE INSURANCE (ESI) WHICH ARE GIVEN BELOW: THEREFORE THE LD. COUNSEL FOR THE ASSESSEE HAS PRAYED THE BENCH THAT SINCE THE PAYMENT OF PF AND ESI WERE MADE BEFORE THE DUE DATE OF FILING RETURN OF INCOME HENCE, THERE SHOULD NOT BE ANY DISALLOWANCE AND THE LD AO SHOULD BE DIRECTED TO DELETE THE ADDITION. VEKTRA ENGINEERING PVT. LTD. ITA NO.1584/KOL/2017 A.Y: 2008-09 4 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS SUBMITTED BEFORE US THAT THERE WAS DELAY IN MAKING THE PAYMENT OF PF AS PER THE PROVIDENT FUND ACT AND THERE IS ALSO A DELAY IN MAKING THE PAYMENT OF ESI AS PER EMPLOYEES INSURANCE ACT. THEREFORE, AS PER THE RESPECTIVE ACTS VIDE PF AND ESI ACT, THERE IS A DELAY IN MAKING THE PAYMENT TO THE PRESCRIBED AUTHORITIES WITHIN THE DUE DATE AND THEREFORE THE LD AO HAS RIGHT DISALLOWED, THE SAME. 8. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE NOTE THAT FROM THE TABLE SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, FOR MAKING THE PAYMENT OF PF AND ESI WHICH IS MENTIONED IN PARA 6 AND 7 OF THIS ORDER, WE NOTE THAT ALL THE PAYMENTS HAD BEEN MADE WITHIN THE FINANCIAL YEAR ITSELF AND WELL BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME UNDER SECTION 139 (1) OF THE ACT. THE ASSESSEE HAS SUBMITTED CHALLANS FOR EVIDENCING HIS PAYMENT TOWARDS PF AND ESI BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME UNDER SECTION 139 (1) OF THE ACT. WE NOTE THAT AS PER CBDT CIRCULAR NO.22/2015, DATED 17.12.2015, ISSUED BY CBDT WITH REFERENCE TO ALLOWABILITY OF CONTRIBUTIONS TO PF FOR THE WELFARE OF THE EMPLOYEES IN TERMS OF SECTION 43B OF THE ACT. IT IS CLEARLY MENTIONED IN THE SAID CIRCULAR THAT NO DISALLOWANCE COULD BE MADE U/S 43B OF THE ACT, IF THE AMOUNT HAS ACTUALLY BEEN PAID BY THE ASSESSEE BEFORE FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT. THE RELEVANT PORTION OF THE CBDT CIRCULAR IS GIVEN BELOW FOR READY REFERENCE: 2. THE MATTER HAS BEEN EXAMINED IN LIGHT OF THE JUDICIAL DECISIONS ON THIS ISSUE. IN THE CASE OF COMMISSIONER VS. ALOM EXTRUSIONS LTD, [2009] 185 TAXMAN 416 (SC), THE APEX COURT HELD THAT THE AMENDMENTS MADE IN SECTION 43B OF THE ACT I.E. DELETION OF SECOND PROVISO AND AMENDMENT IN THE FIRST PROVISO, BEING CURATIVE IN NATURE ARE RETROSPECTIVELY APPLICABLE FROM 1.04.1988. IT FURTHER HELD THAT BY DELETING THE SECOND PROVISO TO SECTION 43B OF THE ACT AND AMENDING THE FIRST PROVISO, THE CONTRIBUTION TO WELFARE FUNDS HAVE BEEN BROUGHT AT PAR WITH THE OTHER DUTY, CESS, FEE, ETC. THUS, THE PROVISO IS EQUALLY APPLICABLE TO THE WELFARE FUNDS ALSO. THEREFORE, THE DEDUCTION IS ALLOWABLE TO THE EMPLOYER ASSESSEE IF HE DEPOSITS THE CONTRIBUTIONS TO WELFARE FUNDS ON OR BEFORE THE 'DUE DATE' OF FILING OF RETURN OF INCOME. . 3. ACCORDINGLY, W.E.F 01.4.1988, THE SETTLED POSITION IS THAT IF THE ASSESSEE DEPOSITS ANY SUM PAYABLE BY IT BY WAY OF TAX, DUTY, CESS OR FEE BY WHATEVER NAME CALLED UNDER ANY LAW FOR THE TIME BEING IN FORCE, OR ANY SUM PAYABLE BY THE ASSESSE AS AN EMPLOYER BY WAY OF CONTRIBUTION TO ANY PROVIDENT FUND VEKTRA ENGINEERING PVT. LTD. ITA NO.1584/KOL/2017 A.Y: 2008-09 5 OR SUPERANNUATION FUND OR GRATUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF EMPLOYEES, ON OR BEFORE THE 'DUE DATE' APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT, NO DISALLOWANCE CAN BE MADE UNDER SECTION 43B OF THE ACT. 9. WE NOTE THAT THIS JURISDICTIONAL HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S VIJAY SHREE LIMITED ITA NO.245 OF 2011, HELD THAT IF EMPLOYEES CONTRIBUTION TO PF AND ESI IS PAID BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME, NO DISALLOWANCE IS MADE U/S 43B OF THE ACT. AMENDMENT TO SECTION 43B OF THE ACT WAS HELD TO HAVE RETROSPECTIVE EFFECT. THE SAME VIEW HAS BEEN AFFIRMED BY THE HONBLE SUPREME COURT IN THE CASE OF ALUM EXTRUSIONS LTD. 319 ITR 306 (SC) WHEREIN IT WAS HELD THAT IF THE ASSESSEE PAID THE AMOUNT IN RESPECT OF PF AND ESI BEFORE THE DUE DATE OF FILING RETURN OF INCOME THERE SHOULD NOT BE ANY DISALLOWANCE. WE NOTE THAT THE ASSESSEES CASE UNDER CONSIDERATION, THE PF AND ESI WERE PAID WITHIN THE DUE DATE OF FILING RETURN OF INCOME U/S 139(1) OF THE ACT AND THEREFORE THERE SHOULD NOT BE ANY DISALLOWANCE AND HENCE WE DIRECT THE AO TO DELETE THE ADDITION OF RS.2,25,177/- ON ACCOUNT OF PF AND RS.25,525/- ON ACCOUNT OF ESI. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10/10/2018. SD/- (A. T. VARKEY) SD/- (DR. A. L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED: 10/10/2018 RG, SPS VEKTRA ENGINEERING PVT. LTD. ITA NO.1584/KOL/2017 A.Y: 2008-09 6 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT- VEKTRA ENGINEERING PVT. LTD. 2. / THE RESPONDENT.- A.C.I.T., CENTRAL CIRCLE-2(4), KOLKATA 3. ( ) / THE CIT(A)-2, KOLKATA. 4. / CIT-2, KOLKATA. 5. , , / DR, ITAT, KOLKATA 6. [ / GUARD FILE. //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA .