Popular Auto Dealers P. Ltd, Kochi V. The ITO, Kochi

ITA 185/COCH/2021

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 1057 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 24-10-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 143(1); 139(1)

Judgement Text

ITA Nos.185 & 186 /Coch/2021 Popular Auto Dealers Pvt. Ltd., Mamangalam IN THE INCOME TAX APPELLATE TRIBUNAL BENCH: COCHIN BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA Nos.185 & 186/Coch/2021 Assessment Year: 2013-14 & 2017-18 Popular Auto Dealers Pvt. Ltd. Kuttukaran Centre Mamangalam Kochi 682 025 PAN NO : AADCP6984G Vs. ITO Corporate Ward-2(3) Kochi APPELLANT RESPONDENT Appellant by : Sri V.M. Veeramani, A.R. Respondent by : Smt. J.M. Jammuna Devi, Sr. D.R. Date of Hearing : 02.08.2022 Date of Pronouncement : 02.08.2022 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: These appeals filed by the assessee are directed against the order of CIT(A), NFAC, Delhi dated 17.9.2021 for the assessment years 2013-14 & 2017-18. 2. First we will take ITA No.185/Coch/2021. The issue in this appeal is with regard to disallowance of remittance of PF after the due date under the respective Act but before the due date u/s 139(1) of the Income-tax Act,1961 ['the Act' for short] amounting to Rs.35,192/-. ITA Nos.185 & 186 /Coch/2021 Popular Auto Dealers Pvt. Ltd., Mamangalam Page 2 of 5 3. After hearing both the parties, we are of the opinion that this issue came for consideration in the case of Popular Vehicles and Services Pvt. Ltd. Vs. CIT reported in 406 ITR 150, wherein held as under:- I.T.A. No.51/Coch/2019 "Held, dismissing the appeal, the employees' contribution was covered by clause (va) of section 36(1) and the deduction was restricted by the Explanation below it. If the employer's contribution under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and the Employees' State Insurance Act, 1948 for the financial year 2007-08 was paid after the year but before the date of filing of the return for that year, it was allowable as a deduction in the assessment year, dehors the fact that it was paid in the subsequent year. Since the employees' contribution was collected from the employees as a deduction in their salary itself it would in effect be income of the assesses, as had been indicated in the definition of "income" under section 2(24)(x). The employees' contribution towards the funds was regulated by sub-clause (x) of section 2(24) and clause (va) of section 36(1) and would not be affected by section 43B. The non obstante clause of section 43B had no effect in so far as the employees' contribution which was specifically covered by clause (va) of section 36(1). By virtue of the Explanation below clause (va), no deduction could be claimed if the contribution had not been paid after collection from the employees by way of deduction from their salaries, within the due date under the labour welfare Acts. The deletion of a proviso under section 43B could not render otiose the Explanation under section 36(1)(va)." 4. Further, the issue of allowability of deduction under section 36(1)(va) of the Act on the employees contribution towards EPF was covered against the assessee by the decision of the High Court of Kerala in the case of Merchem Ltd, (378 1TR 443), wherein it was held that the deduction under section 36(1)(va) of the Act is available to the assessee only if the payment is deposited before the due date specified in that section. Hence, the Ld. CIT(A) held that the assessee is not entitled for deduction of contribution of employees u/s. 36(1)(va) of the Act. 5. In view of above judgment of the Jurisdictional High Court cited (supra), we are inclined to dismiss this ground taken by the assessee. ITA Nos.185 & 186 /Coch/2021 Popular Auto Dealers Pvt. Ltd., Mamangalam Page 3 of 5 ITA 186/Coch/2021:- 6. The issue in this appeal is same as in appeal No.185/2021. Similar issue came for consideration before this Tribunal in the case of M/s. Kreem Foods Pvt. Ltd. Vs. ACIT in ITA No.573/Coch/2022 vide order dated 1.8.2022 wherein held as under: “7. We have heard rival submissions and perused the material on record. The assessee had claimed deduction for delayed remittance of employees' contribution to PF and ESI stating that the same has been deposited before the due date of filing the return u/s 139(1) of the I.T.Act. The Hon'ble jurisdictional High Court in the case of Popular Vehicle 8s Services Pvt. Ltd. v. CIT (supra) had clearly held that employees' share of PF and ESI, which was not deposited within the due date under the respective Acts is not an allowable deduction u/s 36(1)(va) of the I.T.Act. The relevant finding of the Hon'ble Kerala High Court has been elaborately extracted at para 5 of the impugned order of the CIT(A), hence, the same is not reproduced here. In view of the judgment of the Hon'ble jurisdictional High Court, cited supra, we hold that adjustment made u/s 143(1) of the I.T.Act is correct and in accordance with law. Therefore, by following the judgment of the Hon'ble jurisdictional High Court in the case of Popular Vehicle & Services Pvt. Ltd. v. CIT (supra), we hold that the employees' contribution to PF and ESI not deposited within the due date specified in the relevant Acts cannot be allowed as a deduction u/s 36(1)(va) of the I.T.Act. 8. Alternatively, the assessee has raised the contention that the assessee had made payment within the extended due date. It was stated that due to Covid National lockdown from 23 rd March; 2020, EPFO had issued Notification extending the due date fth - making payments under the respective Acts. The details of the extended due date and the actual date of payment, according to the assessee, are as follows:- ITA Nos.185 & 186 /Coch/2021 Popular Auto Dealers Pvt. Ltd., Mamangalam Page 4 of 5 Branch Employee contribution Due date of payment Actual date of payment Remarks Aroor 5,357 15.05.2020 06.05.2020 Paid within extended due date Bangalore 3,522 15.05.2020 15.04.2020 Paid within due date Hyderabad 9,170 15.05.2020 15.04.2020 Paid within due date Aluva 4,290 15.05.2020 15.05.2020 Paid within extended due date Perinthalmanna 12,172 15.05.2020 12.05.2020 Paid within extended due date Paruthikuzhy 6,137 15.05.2020 27.06.2020 Chennai 7,534 15.05.2020 15.05.2020 Paid within extended due date 48,182 9. According to the above table, only with regard to the Paruthikuzhy Branch an amount of Rs.6,137 is paid after the extended due date. This issue was not raised before any of the authorities below. Therefore, the matter is restored to the A.O. The A.O. shall examine the alternative claim of the assessee and shall take a decision in accordance with law. It is ordered accordingly. 10. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.” 7. In view of the above order of the Tribunal, we remit this issue to the file of AO for fresh consideration after giving an opportunity of hearing to the assessee. ITA Nos.185 & 186 /Coch/2021 Popular Auto Dealers Pvt. Ltd., Mamangalam Page 5 of 5 8. In the result, ITA No.185/Coch/2021 is dismissed and ITA No.186/Coch/2021 is partly allowed for statistical purposes. Order pronounced in the open court on 2 nd Aug, 2022 Sd/- (George George K.) Judicial Member Sd/- (Chandra Poojari) Accountant Member Bangalore, Dated 2 nd Aug, 2022. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.