Nilkanth Specific Family Trust, Mehsana V. DCIT, Mehsana Circle, Mehsana

ITA 183/AHD/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7888 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 19-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH
• Section: 143(3)

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 183/AHD/2018 ( ASSESSMENT YEAR : 2014-15) NILKANTH SPECIFIC FAMILY TRUST, PROP. OF KARAN PAPER MILLS, 1074/B, 1075 TO 1078, KADI KALOL ROAD, CHHATRAL, DIST. MEHSANA / VS. DEPUTY COMMISSIONER OF INCOME-TAX, MEHSANA CIRCLE, MEHSANA ./ ./ PAN/GIR NO. : AAATN1399K ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HEMANSHU SHAH, A.R. / RESPONDENT BY : SHRI SAURABH SINGH, SR. D.R. DATE OF HEARING 20/06/2018 !'# / DATE OF PRONOUNCEMENT 06/07/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), GANDHINAG AR (CIT(A) IN SHORT), DATED 18.12.2017 ARISING IN THE ASSESSMENT ORDER DATED 30.12.2016 PASSED BY THE ASSESSING OFFICER (AO) U/S . 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMEN T YEAR 2014-15. 2. THE SOLITARY ISSUE IN THE CAPTIONED APPEALS IS AGAINST THE DENIAL OF BUSINESS DEDUCTION UNDER S. 36(1)(VA) ON ACCOUNT OF ALLEGED LATE ITA NO. 183/AHD/18 [NILKANTH SPECIFIC FAMILY TRUST VS. DCIT] A.Y. 2014-15 - 2 - PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUN D (PF) AND EMPLOYEES' STATE INSURANCE CORPORATION (ESIC) AMOUN TING TO RS.1,74,803/-. 3. THE CIT(A) DENIED THE RELIEF CLAIMED BY THE ASSE SSEE IN THE FIRST APPEAL. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE EXAMINED THE ISSUE TOWARDS ALLOWABILITY OF PF & ESIC UNDER S.36(1)(VA) OF THE ACT. WE NOTICE AT THE OUT SET THAT THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CI T VS. GUJARAT STATE ROAD TRANSPORT CORPORATION 366 ITR 170 (GUJ) IS AGA INST THE ASSESSEE ON THE FIRST PRINCIPLES. THE HONBLE GUJARAT HIGH COURT CONSIDERED THE QUESTION WITH RESPECT TO THE DISALLOWANCE OF AM OUNT BEING EMPLOYEES CONTRIBUTION TO PF ACCOUNT/ESIC CONTRIBU TION, WHICH ADMITTEDLY, THE ASSESSEE IN THAT CASE DID NOT DEPOS IT WITH THE PF DEPARTMENT/ ESIC DEPARTMENT ON OR BEFORE THE DUE DA TE UNDER THE PF ACT AND/OR ESI ACT. HOWEVER, ON PERUSAL OF THE ORD ERS OF THE LOWER AUTHORITIES, WE SIMULTANEOUSLY OBSERVE THAT THE ASS ESSEE HAS TRIED TO DEMONSTRATE THAT EMPLOYEES CONTRIBUTION TO PF/ESIC HAS BEEN MADE BEFORE THE DUE DATE AS PRESCRIBED UNDER THE RESPE CTIVE ACT HAVING REGARD TO THE MONTH OF DISBURSEMENT OF SALARY/WAGES AND ALSO THE GRACE PERIOD AVAILABLE UNDER THE RELEVANT ACTS. IT IS THUS BROADLY THE CASE OF THE ASSESSEE THAT THE RELEVANT DUE DATE F OR MAKING PAYMENT OF CONTRIBUTION HAS TO BE SEEN NOT WITH REFERENCE TO T HE RELEVANT MONTHS RELATABLE TO WAGES/SALARY BUT THE MONTH OF ITS ACTU AL DISBURSEMENT. COUPLED WITH THIS, GRACE PERIOD AVAILABLE UNDER THE RESPECTIVE ACT IS ALSO REQUIRED TO BE TAKEN INTO ACCOUNT. IN THIS RE GARD, WE OBSERVE THAT THE CO-ORDINATE BENCH OF TRIBUNAL IN KANOI PAPER & INDUSTRIES LTD. VS. ACIT 75 TTJ 448 HAS OBSERVED THAT THE RELEVANT DUE DATE IN SUCH A CASE IS TO BE SEEN WITH REFERENCE TO THE MONTH OF THE ACTUAL DISBURSEMENT OF WAGES/SALARIES. WE ALSO ARE OF THE VIEW THAT GRACE ITA NO. 183/AHD/18 [NILKANTH SPECIFIC FAMILY TRUST VS. DCIT] A.Y. 2014-15 - 3 - PERIOD AVAILABLE UNDER THE RESPECTIVE ACTS SHOULD B E TAKEN INTO ACCOUNT WHILE COMPUTING THE DELAY, IF ANY. 6. HENCE, WE CONSIDER IT EXPEDIENT TO RESTORE THE I SSUE BACK TO THE FILE OF THE AO FOR FACTUAL VERIFICATION AND RE-DETE RMINATION OF THE ISSUE IN THE LIGHT OF THE OBSERVATIONS MADE BY THE CO-ORDINATE BENCH IN THE CASE OF KANOI PAPER & INDUSTRIES LTD. (SUPRA). THE AO SHALL THUS RE-COMPUTE THE AMOUNT OF DISALLOWANCE UNDER S.36(1) (VA) OF THE ACT, IF ANY, ON THE ABOVE BASIS, IN ACCORDANCE WITH LAW. T HE ASSESSEE SHALL BE ENTITLED TO RELIEF UNDER S. 36(1)(VA) OF THE ACT WH ERE IT IS FOUND THAT THE DEPOSITS HAVE BEEN MADE TOWARDS PF/ESIC WITHIN THE DUE DATE FROM THE CLOSE OF MONTH OF ACTUAL DISBURSEMENT OF S ALARY/WAGES IN THE LIGHT OF INTERPRETATION RENDERED IN CASE OF KANOI P APER & INDUSTRIES LTD. (SUPRA). 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. SD/- SD/- (MADHUMITA ROY) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 06/07/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 06/07/20 18