Goldstrike Fuel & Services LLP, Hyderabad V. Income Tax Officer, Ward-6(1) , Hyderabad

ITA 1921/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7017 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 16-03-2021
• Assessment Year: 2018-2019
• Appeal Filed On: 30-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A VENKATA RAO
• Assessee Lawyers: C S SUBRAMANYAM
• Section: 43B; 143(1); 28; 139; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO S . 1920 & 1921/HYD/2019 ASSESSMENT YEAR S : 2017 - 18 & 20 18 - 19 GOLDSTRIKE FUEL & SERVICES LLP, HYDERABAD. PAN: AAOFG 9671 R VS. INCOME TAX OFFICER, WARD - 6(1) , HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI C.S. SUBRAMANYAM REVENUE BY: SHRI A. VENKATA RAO, DR DATE OF HEARING: 16/03/2021 DATE OF PRONOUNCEMENT: 09 /04/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: TH E CAPTIONED APPEAL S ARE FILED BY THE ASSESSEE AGAINST THE ORDER S OF THE LD. CIT (A) - 6, HYDERABAD IN APPEAL NO S . 10021 AND 10166/2019 - 20/C/CIT(A) - 6, DATED 22/11/2019 PASSED U/S. 143(1) R.W.S 250(6) OF THE ACT FOR THE AY 2017 - 18 AND 2018 - 19. THE ASSESSEE HAS RAISED FIVE SIMILAR GROUNDS IN BOTH OF ITS APPEALS HOWEVER, THE CRUX OF THE ISSUE IS THAT: - THE LD. CIT (A) HAS ERRED IN UPHOLDING THE ORDER OF THE LD. AO WHO HAD DENIED THE DEDUCTION OF RS. 1,25,482 / - 2 AND RS. 76,805/ - FOR THE AYS 2017 - 18 AND 2018 - 19 RESPECTIVELY BEING THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AS THE SAME WAS NOT PAID W ITHIN THE DUE DATE UNDER THE RELEVANT ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N LLP FILED ITS RETURN S OF INCOME ON 1 9/10/2018 & 11/10/2018 FOR THE AY 2017 - 18 AND 2018 - 19 RESPECTIVELY AND THE RETURN S W ERE PROCESSED U/S. 143(1) OF THE ACT WHEREIN DEDUCTION OF RS. 1,25,482/ - AND RS. 76, 805 / - FOR THE AYS 2017 - 18 AND 2018 - 19 RESPECTIVELY WAS DENIED TO THE ASSESSEE BEING THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND WHICH WAS PAID BEYOND THE DUE DATE AS SPE CIFIED IN THE PROVIDENT FUND ACT. ON APPEAL THE LD. CIT (A) CONFIRMED THE ORDER S OF THE LD. AO BY RELYING ON THE DECISIONS OF VARI OUS HIGHER JUDICIARY WHICH ARE CITED IN THE ORDER. 4. AT THE OUTSET, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT (A) ON THE ISSUE WHEREIN HE HAS FOLLOWED THE DECISIONS OF THE HONBLE KERALA HIGH COURT VIZ., (I) CIT VS. MERCHEM LTD [2015] 378 I TR 443 (KERALA); (II) CIT VS. SOUTH INDIA CORPN., LTD [2000] 242 ITR 114 (KER.) (III) CIT VS. G.T.N. TEXTIOLES LTD [2004] 269 ITR 282 (KER.), (IV) CIT VS. JAIRAM & SONS [2004] 269 ITR 285 (KER.) AND THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CAS E OF CIT VS. GUJART STATE ROAD TRANSPORT CORPORATION [2014] 366 ITR 170 (GUJ.). 3 5. FURTHER, THIS BENCH OF THE TRIBUNAL IN THE CASE OF CAF D LAKE PRIVATE LIMITED, HYDERABAD VS. ITO IN ITA NO. 237/HYD/2019 VIDE ORDER DATED 03/02/2021 HAD OBSERVED AS UNDER: - 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. WE DO NOT FIND ANY MERIT IN THE SUBMISSION OF THE ASSESSEE ON THIS ISSUE. SECTION 36(1)(VA) OF THE ACT SPECIFICALLY PROVIDES THAT IF THE ASSESSEE REMITS THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND/ESI WITHIN THE DUE DATE MENTIONED IN THE RELEVANT ACT P.F ACT, THEN THE DEDUCTION WILL BE ALLOWABLE. THE RELEVANT PORTIONS OF SECTION 36(1)(VA) IS REPRODUCED HEREIN BELOW FOR REFERENCE: - 36(1)(VA) ANY SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH THE PROVISIONS OF SUB - CLAUSE (X) OF CLAUSE (24) OF SECTION 2 APPLY, IF SUCH SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE. EXPLANATION: - FOR THE PURPOSES OF THIS CLAUSE, DUE DATE MEANS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS A N EMPLOYER TO CREDIT AN EMPLOYEES CONTRIBUTION TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND UNDER ANY ACT, RULE, ORDER OR NOTIFICATION ISSUED THERE - UNDER OR UNDER ANY STANDING ORDER, AWARD, CONTRACT OF SERVICE OR OTHERWISE; 7. FURTHER SECTION 43B OF T HE ACT, ONLY PROVIDES THAT DEDUCTION WILL BE ALLOWED WITH RESPECT TO EMPLOYERS CONTRIBUTION TO PROVIDENT FUND IF THE SAME IS REMITTED WITHIN THE DUE DATE OF FILING THE RETURN OF INCOME. THE RELEVANT PORTION OF SECTION 43B IS EXTRACTED HEREIN BELOW FOR REF ERENCE: - [CERTAIN DEDUCTION TO BE ONLY ON ACTUAL PAYMENT.] 43B NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RESPECT OF --- (A) ------------------- (B) ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER BY WAY OF CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR GRATUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF THE EMPLOYEES ------------------ ------------------ ------------------- PROVID ED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB - SECTION (1) OF SECTION 139 IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED 4 AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FURNISHED BY THE ASSESSEE ALONG WITH SUCH RETURN. 8. THUS SECTION 36(1)(VA) OF THE ACT REFERS TO EMPLOYEES CONTRIBUTION TO P.F/ESI WHILE AS SECTION 43B OF THE ACT REFERS TO EMPLOYERS CONTRIBUTION TO P.F. HENCE SECTION 43B OF THE ACT HAS NO APPLICATION WITH RESPECT TO EMPLOYEES CONTRIBUTION TO P.F./ESI. ACCORDINGLY SECTION 43B OF THE ACT WILL NOT OVERRIDE THE PROVISIONS OF SECTION 36(1)(VA ) OF THE ACT WITH RESPECT TO EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. IT IS PERTINENT TO MENTION THAT THOUGH EMPLOYEES & EMPLOYERS CONTRIBUTION TO P.F/ESI ARE REMITTED BY THE EMPLOYER INTO THE GOVERNMENT TREASURY, THEY ARE SEPARATE AND DISTINCT FOR WHI CH INDEPENDENT PROVISIONS HAVE BEEN CAST UNDER THE ACT. EMPLOYEES CONTRIBUTION TO P.F./ESI, IS NOTHING BUT APPROPRIATION OF A PORTION OF THE SALARY WHICH IS LEGITIMATELY DUE TO THE EMPLOYEE AND REMITTED BY THE EMPLOYER IN THE GOVERNMENT TREASURY ON BEHALF OF THE EMPLOYEE IN ACCORDANCE WITH THE PROVISIONS OF THE RELEVANT P.F., ACT. HENCE IT IS CRYSTAL CLEAR FROM SECTION 36(1)(VA) OF THE ACT THAT WITH RESPECT TO REMITTANCE OF EMPLOYEES CONTRIBUTION TO RECOGNIZED PROVIDENT FUND/ESI, DEDUCTION WILL BE ALLOWAB LE TO THE ASSESSEE ONLY IF THE SAME IS REMITTED WITHIN THE DUE DATE MENTIONED IN THE RELEVANT P.F. ACT AND WITH RESPECT TO EMPLOYERS CONTRIBUTION TO RECOGNIZED PROVIDENT FUND, SECTION 43B OF THE ACT MAKES IT CLEAR THAT DEDUCTION WILL BE ALLOWABLE IF THE R EMITTANCE IS MADE WITH IN THE DUE DATE OF FILING THE RETURN OF INCOME. THE HONBLE GUJARAT HIGH COURT IN THE CASE CIT VS. GUJART STATE ROAD TRANSPORT CORPORATION REPORTED IN [2014] 366 ITR 170 (GUJ.) HAS OBSERVED AS UNDER ON THE ISSUE: - UNDER SECTION 2(24 )(X) OF THE INCOME TAX ACT, 1961 ANY SUM RECEIVED BY THE ASSESSEE - EMPLOYER FROM HIS EMPLOYEES AS CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR ANY FUND SET UP UNDER THE PROVISIONS OF THE EMPLOYEES STATE INSURANCE ACT, 1948, OR ANY OTHER FUN D FOR THE WELFARE OF SUCH EMPLOYEES SHALL BE TREATED AS AN INCOME. UNDER SECTION 36(1)(VA) THE ASSESSEE SHALL BE ENTITLED TO THE DEDUCTION IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 WITH RESPECT TO ANY SUM RECEIVED BY THE ASSESSEE FROM THE EMPLOY EES TO WHICH THE PROVISIONS OF SUB - CLAUSE (X) OF CLAUSE (24) OF SECTION 2 APPLY, IF SUCH SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNTS IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE. AS PER THE EXPLANATION TO SECTION 36(1)(VA) FOR THE PURPOSE OF CLAUSE (X), DUE DATE MEANS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT THE EMPLOYEES CONTRIBUTION TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND UNDER THE ACT, RULE, ORDER OR NOTIFICATION ISSUED THEREUNDER OR UNDER ANY STANDING ORDER, AWARD, CONTRACT OR SERVICE OR OTHERWISE. SECTION 43B IS WITH RESPECT TO CERTAIN DEDUCTIONS ONLY ON ACTUAL PAYMENT. THE DELETION OF THE SECOND PROVISO TO SECTION 43B AND THE AMENDMENT IN THE FIRST PROVISO TO SECTION 43B ALONE AND THE D ELETION OF THE SECOND PROVISO TO SECTION 43B BY THE AMENDMENT PURSUANT TO THE FINANCE ACT, 2003, CANNOT BE MADE APPLICABLE WITH RESPECT TO SECTION 36(1)(VA) OF THE ACT. THEREFORE, WITH RESPECT TO ANY SUM WITH RESPECT TO THE EMPLOYEES CONTRIBUTION AS MENT IONED IN SECTION 36(1)(VA) OF THE ACT, THE ASSESSEE SHALL BE ENTITLED TO THE 5 DEDUCTION OF SUCH SUM TOWARDS THE EMPLOYEES CONTRIBUTION IF IT IS DEPOSITED IN THE ACCOUNTS OF THE CONCERNED EMPLOYEES AND IN THE CONCERNED FUND SUCH AS PROVIDENT FUND, EMPLOYEES STATE INSURANCE CONTRIBUTION FUND ETC., PROVIDED THE SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNTS IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE UNDER THE PROVIDENT FUND ACT, EMPLOYEES STATE INSURANCE ACT, RULE, ORDER OR NOTIFIC ATION ISSUED THEREUNDER OR UNDER ANY STANDING ORDER, AWARD, CONTRACT OR SERVICE OR OTHERWISE. THERE IS NO AMENDMENT IN SECTION 36(1)(VA) AND EVEN THE EXPLANATION TO SECTION 36(1)(VA) IS NOT DELETED AND IS STILL ON THE STATUTE AND IS REQUIRED TO BE COMPLIE D WITH. MERELY BECAUSE THE SECOND PROVISO TO SECTION 43B WHICH PROVIDED THAT EVEN WITH RESPECT TO THE EMPLOYERS CONTRIBUTION (SECTION 43(B)), THE ASSESSEE WAS REQUIRED TO CREDIT THE AMOUNT IN THE RELEVANT FUND UNDER THE PROVIDENT FUND ACT OR ANY OTHER FU ND FOR THE WELFARE OF THE EMPLOYEES O N OR BEFORE THE DUE DATE UNDER THE RELEVANT ACT IS DELETED. IT CANNOT BE SAID THAT SECTION 36(1)(VA) IS ALSO AMENDED OR THE EXPLANATION TO SECTION 36(1)(VA) HAS BEEN DELETED OR AMENDED. THEREFORE, IF THE ASSESSEE HAS NOT CREDIT THE EMPLOYEES CONTRIBUTION TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE MENTIONED IN THE EXPLANATION TO SECTION 36(1)(VA), THE ASSESSEE SHALL NOT BE ENTITLED TO DEDUCTION OF SUCH AMOUNT IN COMPUTING THE INCO ME REFERRED IN SECTION 28. 9. SIMILARLY THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. MERCHEM LTD REPORTED IN [2015] 378 ITR 443 (KER) HELD AS UNDER: - ON A READING OF SECTION 36(1)(VA) OF THE INCOME TAX ACT, 1961 ALONG WITH SECTION 2(24)(X), IT IS CATEGORIC AND CLEAR THAT THE CONTRIBUTION RECEIVED BY THE ASSESSEE FROM THE EMPLOYEES ALONE WAS TREATED AS INCOME FOR THE PURPOSE OF SECTION 36(1)(VA) AND THEREFORE, THE ASSESSEE IS ENTITLED TO GET DEDUCTION FOR THE SUM RECEIVED BY THE ASSE SSEE FROM HIS EMPLOYEES TOWARDS CONTRIBUTION TO THE FUND OR FUNDS SO MENTIONED ONLY IF, THE AMOUNT WAS CREDITED BY THE ASSESSEE ON OR BEFORE THE DUE DATE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND AS PROVIDED UNDER EXPLANATION TO SECTION 36(1)(VA) OF TH E ACT. SO FAR AS THE SECTION 43(B) IS CONCERNED, IT TAKES CARE OF ONLY THE CONTRIBUTION PAYABLE BY THE EMPLOYER OR THE ASSESSEE TO THE RESPECTIVE FUNDS. THEREFORE, SECTIONS 36(1)(VA) AND 43B(B) OPERATE IN DIFFERENT FIELDS, I.E., THE FORMER TAKES CARE OF THE EMPLOYEES CONTRIBUTION AND THE LATTER THE EMPLOYERS CONTRIBUTION. THE ASSESSEE IS ENTITLED TO GET THE BENEFIT OF DEDUCTION UNDER SECTION 43B(B) AS PROVIDED UNDER THE PROVISO THERETO ONLY WITH REGARD TO THE PORTION OF THE AMOUNT PAID BY THE EMPLOYER TO THE CONTRIBUTORY FUND. HELD, ALLOWING THE APPEAL, THAT SINCE THE ASSESSEE HAD ADMITTEDLY NOT PAID THE REMITTANCE OF THE EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND AND ESI WITHIN THE DATES PRESCRIBED UNDER THE RESPECTIVE ACT, THE ASSESSEE WAS NOT ENTI TLED TO DEDUCTION U/S. 43B OF THE AMOUNTS DEDUCTED THEREUNDER FOR AND ON BEHALF OF THE EMPLOYEES. 6 10. SIMILAR VIEW WAS VENTED BY THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF B.S. PATEL VS. DCIT REPORTED IN [2010] 326 ITR 457 (MP). 11. FOR THE ABOVE STATED REASONS, WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE LD. REVENUE AUTHORITIES. ACCORDINGLY, WE HEREBY CONFIRM THE ORDERS OF THE REVENUE AUTHORITIES ON THESE ISSUES. ACCORDINGLY, GROUND NO.1 IS HELD AGAINST THE ASSESSEE. 6. FOLLOWING THE RATIO LAID DOWN BY THE ABOVE - MENTIONED DECISION S , I DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE LD. REVENUE AUTHORITIES. ACCORDINGLY, I HEREBY CONFIRM THE ORDERS OF THE LD. REVENUE AUTHORITIES FOR THE AYS 2017 - 18 AND 2018 - 19 . 7. IN THE RESULT, BOTH APPEAL S OF THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE 09 TH APRIL, 2021. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 09 TH APRIL, 2021. OKK C OPY TO: - 1) GOLDSTRIKE FUEL & SERVICES LLP, 6 - 3 - 927/C & D, RAJ BHAWAN ROAD , KHAIRTHABAD, HYDERABAD. 2) INCOME TAX OFFICER, WARD - 6(1), 6 TH FLOOR, IT TOWERS, AC GUARDS, HYDERABAD. 3) THE CIT (A) - 6, HYDERABAD . 4) THE PR CIT - 6, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE