The ACIT, Mehsana Circle, Mehsana V. M/s. Ammann Apollo India Pvt. Ltd., Mehsana

ITA 2313/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8437 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 05-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 2313/AHD/2015 WITH CO NO. 189/AHD/2015 (ASSESSMENT YEAR: 2012-13) ACIT, MEHSANA CIRCLE, MEHSANA APPELLANT VS. M/S. AMMANN APOLLO INDIA PVT. LTD., PLOT NO.2, AT-DITASAN, POST-JAGUDAN, MEHSANA, PIN 382710 RESPONDENT / CR OSS OBJECTOR PAN: AACCA0194N /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /BY ASSESSEE : NONE /DATE OF HEARING : 28.09.2017 /DATE OF PRONOUNCEMENT : 29.09.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL AND ASSESSEES CROSS OBJECTIO N FOR ASSESSMENT YEAR 2012-13 ARISE AGAINST THE CIT(A), GANDHINAGAR, AHME DABADS ORDER DATED 29.05.2015 IN CASE NO. CIT(A)/GNR/287/2014-15, REVE RSING ASSESSING OFFICERS ACTION DISALLOWING /ADDING LATE PAYMENT OF EMPLOYEE S CONTRIBUTION TO ESI/PF AND THE ONE U/S.14A R.W. RULE 8D AMOUNTING TO RS.6,08,8 38/- AND RS.30,00,186/-; ITA NO. 2313/AHD/15 & CO NO. 189/AHD/15 (ACIT VS. M/S. AMMANN APOLLO INDIA PVT. LTD.) A.Y. 2012-13 - 2 - RESPECTIVELY; IN PROCEEDINGS U/S. 143(3) OF THE IN COME TAX ACT, 1961; IN SHORT THE ACT. CASE CALLED TWICE. NONE APPEARS AT ASSESSEES BEH EST. CASE FILE RECORDS INDICATE THAT THE REGISTRY HAS ALREADY SENT AN RPAD NOTICE TO THE ASSESSEE DATED 08.09.2017 FOR TODAYS HEARING. WE THEREFORE PROCE ED EX PARTE AGAINST THE ASSESSEE. 2. WE ADVERT TO REVENUES FORMER SUBSTANTIVE GROUND SEEKING TO REVIVE FORMER DISALLOWANCE OF RS.6,08,838/- PERTAINING TO ASSESSE ES LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO PF/ESI. CASE FILE SUFFICIENTLY REC ORDS THAT THE ASSESSEE HAD MADE THE IMPUGNED PAYMENTS ON 18.08.2011 AND 17.10.2011 MUCH AFTER THE DUE DATES FALLING ON 15.08.2011 AND 15.10.2011; RESPECTIVELY. THIS MADE THE ASSESSING OFFICER TO INVOKE THE IMPUGNED DISALLOWANCE. THE C IT(A) ON THE OTHER HAND HOLDS THAT SUCH A DISALLOWANCE CANNOT BE MADE IN CASE IT IS FOUND THAT THE IMPUGNED PAYMENT IS MADE IN GRACE PERIOD AS UNDER: 5.3 I HAVE CONSIDERED THE FACTS OF THE CA SE, ASSESSMENT ORDER, SUBMISSION MADE AND CASE LAWS RELIED UPON. AO HAS MADE THE DISALLOWANCE OF RS.6,08,138/- TOWAR DS CONTRIBUTION OF EMPLOYEES PF CONTENDING THAT THE HON'BLE JURISDICTI ONAL HIGH COURT IN CIT V. GUJARAT STATE ROAD TRANSPORT CORP, 223 TAXMAN 398 H AS CLEARLY STATED CONTRIBUTION TOWARDS P.P. PAYABLE BY THE EMPLOYEES SHALL BE PAID BEFORE THE STIPULATED DATES AS PER P.P. RULES AND THE SAME CAN NOT BE ALLOWABLE AS EXPENDITURE IF THE SAME ARE DEPOSITED BEFORE THE DUE DATE OF FI LING OF RETURN. FURTHER, IT IS ALSO CONTENDED BY THE AO THAT IN THE AUDIT REPORT THE DU E DATE MENTIONED IS 15TH OF THE NEXT MONTH BY THE AUDITOR. ACCORDINGLY, THE DUE DAT E FOR PAYMENT IN RESPECT OF DEPOSIT OF EMPLOYEE'S CONTRIBUTION TO PF IS TO BE T AKEN AS 15TH OF THE NEXT MONTH AND CONCLUDED THAT APPELLANT HAD FAILED TO DEPOSIT EMPLOYEE'S PF CONTRIBUTION OF AN AMOUNT OF RS.608838/- WITHIN THE TIME AND ACCORD INGLY DISALLOWED THE SAME UNDER 36(1)(V)(A) OF THE ACT. ON THE OTHER HAND, APPELLANT HAS CONTENDED THAT NO DISALLOWANCE IS WARRANTED IN THE CASE OF THE APPELLANT AS THE EMPLO YEES PF DEDUCTED WERE DEPOSITED INTO THE GOVERNMENT ACCOUNT WITHIN THE GR ACE PERIOD OF 5 DAYS I.E. BEFORE 15 TH OF THE SUBSEQUENT MONTH. WITH REGARD TO THE GUJAR AT HIGH COURT DECISION IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPN (SUP RA) RELIED UPON BY THE AO IT IS CONTENDED THAT IT IS NOT RELEVANT IN THE CASE OF THE APPELLANT AS APPELLANT HAD DEPOSITED THE EMPLOYEES' PF CONTRIBUTION WITHIN THE GRACE PERIOD WHEREAS IN THE CASE RELIED UPON BY THE AO THE CONTRIBUTION IS MADE TO THE GOVERNMENT ACCOUNT BEYOND THE GRACE PERIOD ALLOWED. ITA NO. 2313/AHD/15 & CO NO. 189/AHD/15 (ACIT VS. M/S. AMMANN APOLLO INDIA PVT. LTD.) A.Y. 2012-13 - 3 - IN THE ENTIRETY OF THE FACTS OF THE CIRCUMSTANCES O F THE CASE, IT IS SEEN THAT IN THE CASE OF THE APPELLANT, ALL THE PAYMENTS IN RESP ECT OF EMPLOYEES' CONTRIBUTION HAVE BEEN MADE ON OR BEFORE THE DUE DATE AS PER THE RELEVANT ACT WITHIN THE GRACE PERIOD. IN THE CASE OF INDO SWISS ANTI SHOCK LTD, H ON'BLE AHMEDABAD TRIBUNAL HAS HELD THAT PAYMENT OF EMPLOYEES' CONTRIBUTION WITHIN THE GRACE PERIOD IS ALLOWABLE AND HAS BEEN TREATED AS PAID ON OR BEFORE THE DUE D ATE AS PER EXPLANATION TO SECTION 36(1)(VA) OF THE ACT. SIMILARLY, THE IN THE CASE OF SONY INDIA (P) LTD REPORTED AT 315 UR 150, HON'BLE DELHI TRIBUNAL RELY ING ON THE DECISION TAKEN BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF GANAPA THY MILLS CO. LTD (2000) 243 ITR 879, HAD DELETED THE ADDITION MADE BY THE AO HO LDING THAT THE 'DUE DATE' FOR PAYMENT OF PF CONTRIBUTION AS DEFINED IN EXPLANATIO N TO SECTION 36(1)(VA) GETS EXTENDED BY THE GRACE PERIOD OF 5 DAYS ALLOWED UNDE R THE RELEVANT STATUTE. FROM THE DISCUSSION MADE ABOVE, IT IS CLEAR THAT FOR THE PURPOSE OF COMPUTING THE DUE DATE U/S 36(1)(VA), THE GRACE PERIOD OF 5 DAYS IS T O BE ADDED TO THE DUE DATE. IN THE CASE OF THE APPELLANT, THE EMPLOYEES' CONTRIBUTION HAD BEEN DEPOSITED TO THE GOVERNMENT ACCOUNT WITHIN THE GRACE PERIOD ALLOWED AS PER THE RELEVANT PF ACT AND THEREFORE, THE CONTENTION OF THE APPELLANT IS A LLOWABLE. FOLLOWING THE JUDICIAL PRONOUNCEMENTS AS ABOVE, THE DISALLOWANCE AND ADDIT ION MADE BY THE AO ON ACCOUNT OF EMPLOYEES' PF OF RS.6,08,138/- IS HELD N OT JUSTIFIED AND IS HEREBY DIRECTED TO BE DELETED. RELEVANT GROUND OF APPEAL ARE ALLOWED. 3. LEARNED DEPARTMENTAL REPRESENTATIVE QUOTES HONB LE JURISDICTIONAL HIGH COURTS DECISION IN GUJARAT STATE ROAD TRANSPORT CO RPORATION CASE (SUPRA) RESTORING AN IDENTICAL DISALLOWANCE. HE HOWEVER FAILS TO DIS PUTE THE LATTER LOWER APPELLATE FINDING THAT THE ASSESSEE HAD MADE THE IMPUGNED PAY MENT WITHIN THE GRACE PERIOD AS PRESCRIBED IN THE RELEVANT STATUTE. WE THEREFOR E FIND NO MERIT IN THIS INSTANT FORMER SUBSTANTIVE GROUND. 4. THE REVENUES LATTER SUBSTANTIVE GROUND SEEKS TO RESTORE ASSESSING OFFICERS ACTION DISALLOWING AN AMOUNT OF RS.30,00, 186/- U/S.14A R.W. RULE 8D OF THE INCOME TAX RULES. WE NOTICE AT THE OUTSET THAT THE ASSESSEE HAS NOT DERIVED ANY EXEMPT INCOME IN THE IMPUGNED ASSESSMENT YEAR. THI S MAKES THE CIT(A) TO DELETE THE IMPUGNED DISALLOWANCE AFTER QUOTING HONBLE JUR ISDICTIONAL HIGH COURTS DECISION IN CIT VS. CORRTECH ENERGY P. LTD, REPORTE D IN [2015] 372 ITR 97 (GUJ.). THIS LEGAL POSITION HAS NOT BEEN REBUTTED AT REVENU ES BEHEST DURING THE COURSE OF HEARING. WE THEREFORE AFFIRM THE CIT(A)S FINDINGS QUA THIS LATTER ISSUE AS WELL. ITA NO. 2313/AHD/15 & CO NO. 189/AHD/15 (ACIT VS. M/S. AMMANN APOLLO INDIA PVT. LTD.) A.Y. 2012-13 - 4 - 5. THE ASSESSEES CROSS OBJECTION CO NO.189/AHD/201 5 SUPPORTING THE CIT(A)S ORDER ON BOTH THE ABOVE ISSUES IS RENDERED ACADEMIC IN VIEW OF OUR FINDINGS IN REVENUES APPEAL. 6. THE REVENUES APPEAL ITA NO. 2313/AHD/2015 IS DI SMISSED. ASSESSEES CO NO. 189/AHD/2015 IS DISMISSED AS RENDERED INFRUC TUOUS. [PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF SEPTEMBER, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 29/09/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0