ITO, CHENNAI V. M/s. GNSA Infotech Ltd., CHENNAI

ITA 2287/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8247 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 04-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: G SRIKANTH
• Keywords: Deemed to accrue or arise in india
• Section: 43B; 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' # . $ , & ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER ./ I.T.A.NO.2287/MDS/2016 ( / ASSESSMENT YEAR: 2013-14) THE INCOME TAX OFFICER, CORPORATE WARD-2(2),, CHENNAI-34. VS M/S. GNSA INFOTECH LTD. 115 E & F BLOCK, NELSON CHAMBERS, NELSON MANICKAM ROAD, AMINTHAKARAI, CHENNAI-600 029. PAN: AAACG3274H ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. SUPRIYO PAL, JCIT /RESPONDENT BY : MR. G.SRIKANTH, C.A. /DATE OF HEARING : 25 TH OCTOBER, 2016 /DATE OF PRONOUNCEMENT : 26 TH OCTOBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 6, CHENNAI DATED 22.06.2016 IN ITA.NO.298/CIT(A)-6/ 2015- 16 PASSED UNDER SECTION 143(3) R.W.S. 250(6) OF THE ACT. 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS AP PEAL, HOWEVER, THE CRUX OF THE ISSUE IS AS FOLLOWS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.35,56,351/- MADE BY THE LEARNED ASSESSING OFFICER TOWARDS DEEMED INCOME UNDER THE 2 ITA NO.2287/MDS/2016 PROVISIONS OF SECTION 2(24)(X) R.W.S 36(1)(VA) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSME NT YEAR 2013-14 ON 30.09.2013 DECLARING INCOME / LOSS OF RS . 18,29,610/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE ON 2.9.2014. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETE D BY THE LEARNED ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT ON 09.02.2016 WHEREIN HE MADE ADDITION OF RS.35,56, 351/- AS DEEMED INCOME UNDER THE PROVISIONS OF SECTION 2( 24)(X) R.W.S 36(1)(VA) OF THE ACT BECAUSE EMPLOYEES CONTRI BUTION TO PROVIDENT FUND AND ESI WERE NOT REMITTED BY THE ASS ESSEE BEFORE THE DUE DATE UNDER THE PF & ESI ACT. HOWEVER , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) RELYIN G IN THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. INDUSTRIAL SECURITY & INTELLIGENCE PVT. LTD., IN MD S. 585 & 586 OF 2015 DATED 24.01.2015 DELETED THE ADDITION BECAU SE THE EMPLOYEES CONTRIBUTION TO PF & ESI WERE PAID BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. THE GIST OF THE ORDER OF 3 ITA NO.2287/MDS/2016 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS REPRODUCED HEREIN BELOW FOR REFERENCE:- 5. THE MATTER IS CONSIDERED. IN THE ORDER FOR A. Y. 2012- 13 IN ITA NO.280/CIT(A)- 6/2014-15 DATED 15.12.2015 , I HAD ALLOWED THE APPEAL ON THE SAME ISSUE, RESPECTFU LLY FOLLOWING THE BINDING JUDICIAL PRECEDENCE OF THE HO N'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PRIVATE LIMITED IN MDS. 585 & 586 OF 2015 & M.P. NO., OF 2015 DATED 24.01.2015. IN THIS CASE, THE HON'BLE JURISDICTIONAL HIGH COURT HA S HELD AS UNDER: '5. WE FIND THAT THE TRIBUNAL HAS RIGHTLY RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS ALOM EXTRUSIONS LIMITED REPORTED IN 319 ITR 306, WHEREBY, THE SUPREME COURT HELD THAT OMISSION OF SECTION PROVISO TO SECTION 43B AND AMENDMENT TO THE FIRST PROVISO BY FINANCE ACT, 2003 ARE CURATIVE IN NATURE AND ARE EFFECTIVE RETROSPECTIVELY I.E. WITH EFFECT FROM 01.04.1988 I.E. THE DATE OF INSERTION OF FIRST PROVISO. THE DELHI HIGH COURT IN THE CASE OF CIT VS ANIL LIMITED REPORTED IN 321 ITR 508 HELD THAT IF THE ASSESSEE HAD DEPOSITED EMPLOYEE'S CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI AFTER DUE DATE AS PRESCRIBED UNDER THE RELEVANT ACT, BUT BEFORE THE D UE DATE OF FILING OF RETURN UNDER THE INCOME-TAX ACT, NO DISALLOWANCE COULD BE MADE IN VIEW OF PROVISIONS OF SECTION 43B AS AMENDED BY FINANCE ACT, 2003. 6. IN THE PRESENT CASE, THE ASSESSEE HAD REMITTED T HE EMPLOYEE'S CONTRIBUTION BEYOND THE DUE DATE FOR PAYMENT, BUT WITHIN THE DUE DATE FOR FILING THE RET URN OF INCOME. HENCE FOLLOWING THE AFORESAID DECISIONS, WE FIND NO REASON TO DIFFER WITH THE FINDINGS OF TH E TRIBUNAL.'(EMPHASIS SUPPLIED) 6. THE SITUATION OF LAW, ON THE ISSUE, AS ON DATE REMAINS THE SAME. HENCE, FOLLOWING THE BINDING PRECEDENCE OF HON'BLE MADRAS HIGH COURT, IT IS HELD THAT THE EMPLOYEES' CONTRIBUTION TO PF & ESI DEPOSITED AFTER THE DUE DATES SPECIFIED UNDER THE RELEVANT PF LAWS BUT BEFORE THE DUE DATE OF FILING INCOME THE RETURN AS SPECIFIED IN SECTION 43B OF THE ACT, CANNOT BE TREA TED AS 4 ITA NO.2287/MDS/2016 DEEMED INCOME OF THE APPELLANT COMPANY WITHIN THE MEANING OF SECTION 36(1)(VA) READ WITH SECTION 2(24 )(X) OF THE ACT. HENCE, THE ADDITION OF RS. 35,56,351/- MADE ON ACCOUNT OF BELATED REMITTANCE OF EMPLOYER' CONTRIBUTION STANDS DELETED. THE GROUNDS OF APPEAL SUCCEED. 4. SINCE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ONLY FOLLOWED THE DECISION OF THE HON BLE JURISDICTIONAL MADRAS HIGH COURT AND DELETED THE AD DITION BECAUSE THE ASSESSEE HAS PAID THE EMPLOYEES CONTRIB UTION TOWARDS PF & ESI WITHIN THE DUE DATE OF FILING THE RETURN, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 26 TH OCTOBER, 2016 SD/- SD/- ( ' # . $ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 26 TH OCTOBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF