Industrial Security and Intelligency India P Ltd., CHENNAI V. ACIT, CHENNAI

ITA 2048/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7186 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-10-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 01-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: A S SRIRAMAN
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' $ % , & ' BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NOS. 2048 & 2049/MDS/2014 ( / ASSESSMENT YEAR: 2003-04 & 2004-05) M/S. INDUSTRIAL SECURITY & INTELLIGENCY INDIA P.LTD. 139, OLD NO.59A, 1 ST FLOOR, RANGARAJAPURAM HIGH ROAD, KODAMBAKKAM, CHENNAI-600 024. VS ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-II(3), CHENNAI. PAN:AAACI4760J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.A.S.SRIRAMAN, ADVOCATE /RESPONDENT BY : MR.P.RADHAKRISHNAN, JCIT / DATE OF HEARING : 27 TH OCTOBER, 2014 /DATE OF PRONOUNCEMENT : 31 ST OCTOBER, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAIN ST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, CHENNAI DATED 06.05.2014 FOR THE ASSE SSMENT YEARS 2003-04 & 2004-05. THE ONLY ISSUE IN THE AP PEALS OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (A PPEALS) ERRED IN CONFIRMING DISALLOWANCE OF EMPLOYEES CONT RIBUTION OF PROVIDENT FUND & ESI IN COMPUTING TAXABLE TOTAL INCOME. 2 ITA NOS. 2048 & 2049/MDS/2014 2. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSING OFFICER DISALLOWED EMPLOYEES CONTRIBUTION TO PROVID ENT FUND AND ESI WHICH WERE REMITTED BEYOND THE DUE DATE FOR PAYMENT BUT WITHIN THE DUE DATE FOR FILING OF RETUR N APPLYING THE PROVISIONS OF SECTION 43B OF THE ACT. COUNSEL FOR THE ASSESSEE SUBMITS THAT ON APPEAL COMMISSIONER OF INC OME TAX (APPEALS) SUSTAINED THE DISALLOWANCE REJECTING THE CONTENTIONS OF THE ASSESSEE THAT EMPLOYEES CONTRIBU TION TO PROVIDENT FUND AND ESI WHICH WERE PAID BEYOND DUE D ATE AS MENTIONED IN THE RESPECTIVE ACTS BUT BEFORE THE DUE DATE FOR FILING OF RETURN OF INCOME. COUNSEL PLACES RELIANC E ON THE FOLLOWING DECISIONS IN SUPPORT OF HIS CONTENTIONS:- I) CIT VS. LAKHANI RUBBER WORKS (326 ITR 415) (P& H ) II) CIT VS.MANOJ KUMAR SINGH [349 ITR 230 (ALL)] III) CIT VS. HEMLA EMBROIDERY MILLS P.LTD . (265 CTR (P&H) 57) IV) CIT VS.SPECTRUM CONSULTANTS INDIA(P)LTD.(100 DTR 12 9) V) CIT VS.STATE BANK OF BIKANER& JAIPUR (363 ITR 70 (RAJ) VI) CIT VS. AIMIL LTD.& ORS (321 ITR 508) VII) CIT VS. SOLAR EXPORTS (210 TAXMAN 520) VIII) CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD. 3 ITA NOS. 2048 & 2049/MDS/2014 ( 265 CTR (RAJ) 59) IX) ESSAE TERAOKA P.LTD. VS. DCIT (100 DTR 134) 3. COUNSEL ALSO PLACES RELIANCE ON THE CO-ORDINATE BENCH DECISION IN THE CASE OF M/S. VENKATESWARA ELECTRICA L INDUSTRIES P.LTD. VS. DCIT IN ITA NO.1344, 1345 & 1636/MDS/2014 DATED 28.08.2014, A COPY OF THE ORDE R IS PLACED ON RECORD. 4. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF LOWER AUTHORITIES IN DISALLOWING EMPLOYEES PROVIDEN T FUND & ESI CONTRIBUTIONS PAID BEYOND DUE DATE BUT BEFORE T HE DUE DATE FOR FILING OF RETURN APPLYING THE PROVISIONS O F SECTION 43B OF THE ACT. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISIONS RELIED ON BEFORE US. IT IS NOT I N DISPUTE THAT ALL THESE PAYMENTS OF PROVIDENT FUND ` 16,20,571/- AND ESI ` 17,51,490/- WERE MADE BEYOND THE GRACE PERIOD / D UE DATE ALLOWED UNDER PROVIDENT FUND & ESI ACTS BUT BEFORE DUE 4 ITA NOS. 2048 & 2049/MDS/2014 DATE FOR FILING OF INCOME-TAX RETURN. THIS ISSUE HA S BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY VARIOUS HIGH C OURTS FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS.ALOM EXTRUSIONS LTD. (319 ITR 306), WHEREIN THE HONBLE SUPREME COURT HELD THAT OMISSION OF SEC OND PROVISO TO SECTION 43B AND AMENDMENT OF FIRST PROV ISO BY FINANCE ACT, 2003 ARE CURATIVE IN NATURE AND ARE EF FECTIVE RETROSPECTIVELY AND THUS WITH EFFECT FROM 1.4.1988 I.E. THE DATE OF INSERTION OF FIRST PROVISO. THE CO-ORDINATE BENCH OF THIS TRIBUNAL CONSIDERING A SIMILAR ISSUE IN THE CASE OF M/S. VENKATESWARA ELECTRICAL INDUSTRIES P.LTD. VS. DCIT (SUPRA) FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AMIL LTD. (321 ITR 508) HELD THAT EVEN THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND IS TO BE A LLOWED AS DEDUCTION IF IT IS PAID WITHIN DUE DATE FOR FILING OF RETURN. WHILE HOLDING SO, THE TRIBUNAL OBSERVED AS UNDER:- 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW, AS WELL AS THE JUDGMENTS/DECISIONS RELIED ON BY THE ID. COUNSEL F OR THE 5 ITA NOS. 2048 & 2049/MDS/2014 ASSESSEE. IT IS AN UN-DISPUTED FACT THAT THERE HAS BEEN DELAY IN REMITTANCE OF EMPLOYEES CONTRIBUTION OF E SI AND PROVIDENT FUND IN BOTH THE AYS I . E. , 2008-09 & 2009-10. IT IS EQUALLY UN-DISPUTED THAT THE ASSESSEE HAS DEP OSITED THE AMOUNT TOWARDS EMPLOYEES CONTRIBUTION OF ESI A ND PROVIDENT FUND BEFORE THE DUE DATE OF FILING OF RE TURN. THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIL' VS. AMIL LTD. , REPORTED AS 321 ITR . 508 HAS HELD THAT I F THE ASSESSEE HAD DEPOSITED EMPLOYEES CONTRIBUTION TOWAR DS PROVIDENT FUND A N D ESI AFTER DUE DATE AS PRESCRIBED UNDE R THE RELEVANT ACT BUT BEFORE THE DUE DATE OF FILING OF RETURN UNDER THE INCOME TAX ACT , NO DIS-ALLOWANCE COULD BE MADE IN VIEW OF THE PROVIS I ONS OF SECTION 438 AS AMENDED BY THE F I NANCE ACT , 2003 . THE DECISION OF THE HON ' BLE DELH I HIGH COURT HAS BEEN FOL L OWED BY THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF JCIT VS. M/S. S.M. APPARELS (P) LTD. (SUPRA). THE TRIBUNAL HAS BEEN CONSISTENTLY FOLLOWING THE VIEW TAKEN BY THE H ONBLE DELHI HIGH COURT. ACCORDINGLY, WE HOLD THAT THE ASS ESSEE IS ENTITLED TO CLAIM EXPENDITURE ON EMPLOYEES CONTRIBUTION TOWARDS ESI AND PROVIDENT FUND FOR BOT H THE AYS. ACCORDINGLY, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. 6. RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE DI RECT THE ASSESSING OFFICER TO DELETE DISALLOWANCES MADE UNDE R SECTION 43B OF THE ACT FOR BOTH THESE ASSESSMENT YE ARS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWE D. 6 ITA NOS. 2048 & 2049/MDS/2014 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 3 1 ST DAY OF OCTOBER, 2014 AT CHENNAI. SD/- SD/- ( . ) ( ( *+ ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDR A PRASAD ) - / ACCOUNTANT MEMBER * - / JUDICIAL MEMBER * /CHENNAI, / /DATED 31 ST OCTOBER, 2014 SOMU 12 32 /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 4 () /CIT(A) 4. 4 /CIT 5. 2 7 /DR 6. /GF .