DCIT Corporate Circle 4(1), CHENNAI V. Malabar Hotels Pvt. Ltd., CHENNAI

ITA 1801/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5170 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-04-2018
• Assessment Year: 2014-2015
• Appeal Filed On: 21-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S PANDIYAN
• Keywords: Question of law
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , ! . '#'$ , % !& ' [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A. NO.1801/CHNY/2017. / ASSESSMENT YEAR : 2014-2015. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(1) CHENNAI 600 034. VS. M/S. MALABAR HOTELS PVT. LTD, NO.1/238, OLD MAHABALIPURAM ROAD, SEMMENCHERRY, CHENNAI 600 119. [PAN AADCM 5836G] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : DR. S. PANDIYAN, ADDL. CIT /RESPONDENT BY : NONE. /DATE OF HEARING : 31-05-2018 ! /DATE OF PRONOUNCEMENT : 31-05-2018 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:- IN THIS APPEAL FILED BY THE REVENUE, WHICH IS DIR ECTED AGAINST AN ORDER DATED 15.05.2017 OF LD. COMMISSION ER OF INCOME TAX (APPEALS)-8, CHENNAI, IT HAS TAKEN ALTOGETHER THRE E GROUNDS OF WHICH GROUND NO.1 & 3 ARE GENERAL NEEDING NO SPECIFIC ADJ UDICATION. 2. GROUND NO.2 WHICH IS THE ONLY EFFECTIVE GROUND IS R EPRODUCED HEREUNDER:- ITA NO.1801/CHNY/2017 :- 2 -: 2. THE CIT(A) ERRED IN DELETING THE ADDITION OF 46,20,690/- MADE U/S 36(I)(VA) R.W.S 2(24)(X) OF THE INCOME TAX ACT, 1961. 2.1 AS PER THE PROVISIONS OF SECTION 36(1)(VA) DEDUCTION IN RESPECT OF ANY SUM RECEIVED BY THE TAX PAYER AS CONTRIBUTION FROM HIS EMPLOYEES TOWARDS ANY WELFARE FUND OF SUCH EMPLOYEES IS ALLOWED ONLY IF SUCH SUM IS CREDITED BY THE TAX PAYER TO THE EMPLOYEES' ACCOUNT IN THE RELEVANT FUND ON OR BEFORE THE DUE DATE. DUE DATE MEANS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT SUCH CONTRIBUTION TO THE EMPLOYEE'S ACCOUNT IN THE RELEVANT FUND UNDER THE PROVISIONS OF ANY LAW OR TERM OF CONTRACT OF SERVICE OR OTHERWISE. 2.2 IT IS PERTINENT TO MENTION THAT THE PROVISIONS OF SECTION 43B OF THE INCOME TAX ACT 1961 IS NOT APPLICABLE IN THE CASE OF EMPLOYEES' CONTRIBUTION TOWARDS PF/ESI. 2.3 IT IS SUBMITTED THAT THE CBDT IN CIRCULAR NO. 22/2015 DATED 17.12.2015 HAS CLARIFIED THAT DEDUCTION RELATING TO EMPLOYEES' CONTRIBUTION TO WELFARE FUNDS ARE GOVERNED BY SECTION 36(1)(VA) OF THE INCOMETAX ACT. THIS CIRCULAR WAS ISSUED BY THE CBDT IN THE LIGHT OF THE JUDICIAL DECISION IN THE CASE OF CIT VS ALOM EXTRUSIONS LTD (2009) 185 TAXMAN 416 (SC). 2.4 THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD, HAS NOT BEEN ACCEPTED AND A REVIEW PETITION HAS BEEN FILED BEFORE THE HONBLE HIGH COURT OF MADRAS. 3. LD. COUNSEL FOR THE REVENUE SUBMITTED THAT REVENUE HAD NOT ACCEPTED THE JUDGMENT OF HONBLE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT VS. INDUSTRIAL SECURITY & INTELLIGENCE INDIA P VT LTD. (TCS NO.585 & 586 OF 2015, DATED 24.07.2015). ACCORDING TO HIM, CONTRIBUTION BY ITA NO.1801/CHNY/2017 :- 3 -: THE EMPLOYEES, TOWARDS WELFARE FUNDS, REMITTED AF TER DUE DATE PRESCRIBED IN THE RESPECTIVE ENACTMENTS HAD TO BE D ISALLOWED U/S.36(I) (VA) OF THE ACT. RELIANCE WAS ALSO PLACED ON CBDT CIRCULAR NO.22/2015, DATED 17.12.2015. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DEPAR TMENTAL REPRESENTATIVE AND PERUSED THE ORDERS OF THE AUTHO RITIES BELOW. WHAT HAS BEEN HELD BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT LTD. (SUPRA) IS REPRODUCED HEREUNDER:- 5. WE FIND THAT THE TRIBUNAL HAS RIGHTY RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRU SIONS LTD, REPORTED IN 319 ITR 306, WHEREBY THE SUPREME COURT HELD THAT OMISSION OF SECOND PROVISO TO SECTION 43B AND AMEND MENT TO FIRST PROVISO BY FINANCE ACT, 2003 ARE CURATIVE IN NATURE AND ARE EFFECTIVE RETROSPECTIVELY. I.E. WITH EFFECT FROM 0 1.01.1988 I.E THE DATE OF INSERTION OF FIRST PROVISO. THE DELHI HIGH COURT IN THE CASE OF CIT VS. AMIL LTD, REPORTED IN 321 ITR 508 HELD T HAT IF THE ASSESSEE HAD DEPOSITED EMPLOYEES CONTRIBUTION TOW ARDS PROVIDENT FUND AND ESI AFTER DUE DATE AS PRESCRIBED UNDER THE RELEVANT ACT, BUT BEFORE THE DUE DATE OF FILING OF RETURN UNDER THE INCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VI EW OF THE PROVISIONS OF SECTION 43B AS AMENDED BY FINANCE ACT , 2003. 6. IN THE PRESENT CASE, THE ASSESSEE HAD REMITTED THE EMP LOYEES CONTRIBUTION BEYOND THE DUE DATE FOR PAYMENT, BUT W ITHIN THE DUE DATE FOR FILING THE RETURN OF INCOME. HENCE, FOLLOW ING THE ABOVE SAID DECISIONS, WE FIND NO REASON TO DIFFER WITH TH E FINDINGS OF THE TRIBUNAL. ACCORDINGLY, WE FIND NO QUESTION OF LAW M UCH LESS ANY SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATIO N IN THESE APPEALS. ITA NO.1801/CHNY/2017 :- 4 -: HONBLE JURISDICTIONAL HIGH COURT HAD ALSO CONSIDER ED CBDT CIRCULAR NO.22/2015, DATED 17.12.2015 WHILE GIVING THE ABOVE JUDGMENT. IN THE CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INT ERFERE WITH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S). 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 31 ST MAY, 2018 AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 31ST MAY, 2018. K V &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF