Ajinkyatara Sahakari Sakhar Karkhana Ltd., V. Dy. CIT, Satara Circle, Satara,

ITA 20/PUN/2010

• Counselvise Citation: 2024514 RSA 2010
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 05-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTUAMA
• Section: 43B; 143(3); 10; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) ITA NO. 20/PN/2010 (ASSTT. YEAR : 2005-06) AJINKYATARA SAHAKARI SAKHAR KARKHANA LTD. .. . APPELLANT A/P. SHAHUNAGAR, SHENDRE, TAL. & DIST.SATARA PAN : NOT AVAILABLE V. DY. COMMISSIONER OF INCOME TAX, RESPONDENT SATARA CIRCLE, SATARA APPELLANT BY : SHRI PRAMOD SHINGTE RESPONDENT BY : MS. ANN KAPTUAMA ORDER PER I.C. SUDHIR, JM THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE LD CIT(A) HAS ERRED IN DISALLOWING AND AD DING BACK AN AMOUNT OF RS. 10,40,860/- ON ACCOUNT OF UNPAID PROFESSIONA L TAX U/S. 43B. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW. 3. THE RELEVANT FACTS ARE THAT REGULAR ASSESSMENT ORDER WAS FRAMED U/S. 143(3) OF THE ACT AT A LOSS OF RS. 6,59,05,692 /-. THE A.O. LATER ON FOUND THAT THERE WAS A NET INCREMENT OF RS. 10,40, 860/- FROM LAST YEAR IN RESPECT OF GOVERNMENT DUES ATTRACTING THE PROVIS IONS OF SECTION 43B OF 2 ITA NO. 20/PN/2010 A JINKYATARA SAH. SAKHAR KARKHANA LTD. A.Y. 2005-06 THE ACT. HE ISSUED NOTICE U/S. 154 OF THE ACT TO T HE ASSESSEE PROPOSING RECTIFICATION IN THE ASSESSMENT ORDER. THE ASSESSE E REPLIED THAT THE SOCIETY COLLECT THE PROFESSIONAL TAX FROM EMPLOYEES SALARY ACTING AS AN AGENT FOR COLLECTION AND PAYMENT. THEREFORE, THE QUESTION OF DISALLOWANCE U/S. 43B DOES NOT ARISE. THE A.O DID NOT AGREE WITH THE SAME. THE A.O OPINED THAT AS PER SEC. 43B(A) OF TH E I.T. ACT, ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY, CESS O R FEE, BY WHATEVER NAME CALLED, UNDER ANY LAW FOR THE TIME BEING IN F ORCE SHALL BE ALLOWED ONLY ON ACTUAL PAYMENT BASIS. SINCE THE AMOUNT OF RS.10,40,860/- WAS NOT PAID BY THE ASSESSEE SOCIETY TILL THE FILING O F RETURN OF INCOME U/S. 139(1) OF THE ACT, THE SAME WAS REQUIRED TO BE DIS ALLOWED IN THE COMPUTATION OF INCOME FILED BY THE ASSESSEE. THE L D CIT(A) HAS ALSO UPHELD THE SAME. 4. BEFORE US, THE LD. A.R. HAS REITERATED THE SIMIL AR CONTENTION. HE SUBMITTED THAT PROVISIONS OF SEC. 43B OF THE I.T. A CT ARE APPLICABLE ONLY IN THE CASE OF EMPLOYERS CONTRIBUTION AND NOT IN THE CASE OF EMPLOYEES CONTRIBUTION. IN THIS REGARD, HE ALSO REFERRED DEF INITION OF INCOME PROVIDED UNDER CLAUSE (X) TO SUB-SECTION (24) TO SE CTION 2 OF THE ACT. HE SUBMITTED THAT AS PER THE SAID DEFINITION, ONLY THO SE SUM RECEIVED BY THE ASSESSEE FROM HIS EMPLOYEES AS CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR ANY FUND SET UP UNDER THE PR OVISIONS OF EMPLOYEES STATE INSURANCE ACT OR ANY OTHER FUND FOR WELFARE OF SUCH EMPLOYEES ARE INCOME OF THE ASSESSEE. THUS, THE PR OFESSIONAL TAX DOES NOT FIND PLACE IN THE SAID DEFINITION. 5. THE LD. D.R., ON THE OTHER HAND, TRIED TO JUSTIF Y THE ORDERS OF THE AUTHORITIES BELOW. SHE SUBMITTED FURTHER THAT THE PROFESSIONAL TAX WAS DEDUCTED BY THE ASSESSEE BEING EMPLOYER AS AN AGEN T OF THE STATE 3 ITA NO. 20/PN/2010 A JINKYATARA SAH. SAKHAR KARKHANA LTD. A.Y. 2005-06 GOVERNMENT, THEREFORE, IT WAS ITS DUTY TO DEPOSIT T HE SAME WITHIN THE TIME PRESCRIBED TO THE GOVERNMENT. 6. CONSIDERING THE ABOVE SUBMISSIONS, WE DO NOT FIN D REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER ON THE ISS UE AS THERE IS NO DISPUTE THAT UNDER THE MAHARASHTRA STATE TAX ON PROFESSIONS , TRADES, CALLINGS AND EMPLOYMENTS ACT 1975, A COPY WHEREOF HAS BEEN PLACE D BEFORE US, THE ASSESSEE WAS LIABLE TO PAY THE STATE GOVERNMENT TH E TAX AT THE RATE MENTIONED AGAINST THE CLASS OF SUCH PERSONS IN THE THIRD COLUMN OF THE SCHEDULE I. UNDER SECTION 4 OF THE SAID ACT, IT WAS LIABILITY OF AN EMPLOYER TO DEDUCT AND PAY THE TAX ON BEHALF OF T HE EMPLOYEES. FOR A READY REFERENCE, RELEVANT EXTRACT OF THE SECTION SE C. 4 OF THE ACT IS BEING REPRODUCED HEREUNDER : 4. EMPLOYERS LIABILITY TO DEDUCT AND PAY TAX ON BE HALF OF EMPLOYEES. - THE TAX PAYABLE UNDER THIS ACT, BY ANY PERSON EARNING A SALARY OR WAGE, SHALL BE DEDUCTED BY HIS EMPLOYER FROM THE SALARY OR WAGE PAYABLE TO SUCH PERSON, BEFORE S UCH SALARY OR WAGE IS PAID TO HIM, AND SUCH EMPLOYER SHALL, IRRES PECTIVE OF WHETHER SUCH DEDUCTION HAS BEEN MADE OR NOT, WHEN T HE SALARY OR WAGE IS PAID TO SUCH PERSONS, BE LIABLE TO PAY TAX ON BEHALF OF ALL SUCH PERSONS: SECTION 9 OF THE ACT PROVIDES ABOUT THE CONSEQUENCE S OF FAILURE TO DEDUCT OR TO PAY SUCH TAX. SECTION 10 OF THE SAID ACT P ROVIDES PENALTY FOR NON- PAYMENT OF TAX. THE ABOVE PROVISIONS MAKE IT CLEA R THAT SUCH EMPLOYER SHALL IRRESPECTIVE OF WHETHER SUCH DEDUCTION HAS B EEN MADE OR NOT WHEN THE SALARY OR WAGE IS PAID TO SUCH PERSON, BE LIABL E TO PAY TAX ON BEHALF OF ALL SUCH PERSONS. IN OUR VIEW, SUB-SECTION (A) TO SECTION 43B OF THE I.T. ACT IS WIDE ENOUGH TO COVER THE SITUATION WHICH HAS ARISEN IN THE PRESENT CASE. SECTION 43B(A) OF THE ACT MAKES IT CLEAR THA T DEDUCTION UNDER THE ACT IS ALLOWABLE IN RESPECT OF ANY SUM PAYABLE BY T HE ASSESSEE BY WAY OF 4 ITA NO. 20/PN/2010 A JINKYATARA SAH. SAKHAR KARKHANA LTD. A.Y. 2005-06 TAX, DUTY, CESS OR FEE, BY WHATEVER NAME CALLED, UN DER ANY LAW FOR THE TIME BEING IN FORCE ONLY ON ITS ACTUAL PAYMENT BY H IM. THERE IS NO DISPUTE THAT AMOUNT COLLECTED BY THE ASSESSEE FROM ITS EMPLOYEES WAS BY WAY OF PROFESSIONAL TAX. THUS, UNDISPUTEDLY, IT WA S TAX WITHIN THE MEANING OF SECTION 43B(A) OF THE ACT, WHICH THE ASS ESSEE HAD FAILED TO DEPOSIT WITH THE GOVERNMENT AFTER COLLECTING IT FRO M ITS EMPLOYEES. THUS, THE AUTHORITIES BELOW WAS JUSTIFIED IN DISALLOWING THE SAID AMOUNT OF RS.10,40,860/- U/S. 43B OF THE ACT, WHICH THE ASSES SEE HAD DEDUCTED ON ACCOUNT OF PROFESSIONAL TAX FROM THE SALARY OF ITS EMPLOYEES, BUT, DID NOT DEPOSIT THE SAME TO THE GOVERNMENT WITHIN THE STIP ULATED TIME. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 7. CONSEQUENTLY, THE APPEAL IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20TH JULY , 2011. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 20TH JULY, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-III, PUNE 4. THE CIT(A)- III, PUNE 5. THE D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE