DCIT, CIRCLE- 10(1), NEW DELHI V. G4S FACILITY SERVICES (INDIA) PVT. LTD., New Delhi

ITA 2581/DEL/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6148 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 12-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ISHTIYAQUE AHMAD
• Section: 6; 15; 43; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.2581/DEL/2018 Assessment Year 2014-15 DCIT, Circle-10(1), New Delhi. v. G4S Facility Services (India) Pvt. Ltd., New Delhi. TAN/PAN: AABCG8346B (Appellant) (Respondent) Appellant by: Ms. Ananya Kapoor, Adv. Respondent by: Mr. Ishtiyaque Ahmad, CIT Date of hearing: 24 03 2022 Date of pronouncement: 24 03 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The c apt io ne d ap p eal ha s be en f i le d at th e i ns ta nc e o f the Re ven ue a gai ns t t he or der of t he Co mmi s si on er of Inc o me Ta x (Ap pe al s) -X XX V, Ne w De lh i [ ‘CIT ( A)’ i n sh or t] , da ted 22 .0 1.2 01 8 ari si ng f r o m th e a sse ss me nt or de r d a ted 01 .1 2. 20 16 pa s sed u nde r Sec ti on 1 4 3(3 ) of the I nc o me T ax A ct, 1 96 1 ( the Ac t) con cer ni ng AY 2 01 4- 15. 2. As p er i ts g ro un ds of appea l, t he Rev enu e ha s chal le ng e d the rev er sa l of dis al lo wa nce of Rs. 3, 57, 1 3,6 97 /- mad e by th e As se ss in g Of f icer un der S ect i on 36( 1) (v a) r. w. S ect io n 2 (2 4) (x) of t he Act on acc ou nt of d ela ye d de po si t of e mp l o yee’ s c on tr ib ut io n t ow ard s PF and E SI C. 3. The C IT (A ) h as re v ers ed th e act io n of the A ss es si ng Of f ic er in I.T.A. No.2581/DEL/2018 2 its a pp ell at e ord er . T he o per at iv e p ara gr ap h of th e o r der of t he CI T( A) is r epr od uc ed he re un der : 4 . 4 . 3 . T h e s u b m i s s i o n s o f t h e a p p e l l a n t t h e c a s e la w s c i t e d a n d t h e r e l e v a n t o r d e r s h a v e b e e n c o n s i d e r e d . Wi t h r e g ar d t o t h e i s s u e r e g a r d i n g l a t e p a y m e n t o f E S I C a n d P F , t h e f o l l o w i ng p o i n t s e m e r g e : ( i ) B r i e f l y t h e f a c t s a r e t h a t i n r e s p e c t o f e m p l o ye e s ' c o n t r i b u t i o n t h e P F 8 c E S I , i n c e r t a i n m o n t h s , t h e a p p e l l a n t h a s d e p o s i t e d t h e a m o u n t s b e y o n d t h e d u e d a t e s p r e sc r i b e d i n t h e r e s p e c t i v e A c t s . T h e d e p o s i t s h a v e b e e n m a d e b ef o r e t h e d u e d a t e o f f i l i n g o f I n c o m e T a x R e t u r n . ( i i ) T h e a p p e l l a n t h a s c l a i m e d t h a t a f t e r d e l e t i o n o f s e c o n d p r o v i s o t o s e c t i o n 4 3 B b y F i n a n c e A c t , 2 0 0 3 , w . e . f . 0 1 . 0 4 . 2 0 0 4 , p a y m e n t s o f e m p l o y e e s c o n t r i b u t i o n t o P F a n d E S I a re a l l o w a b l e a s d e d u c t i o n i f t h e s a m e i s p a i d b e f o r e th e d u e d a t e f o r f i l i n g o f I n c o m e T a x R e t u r n , a s p e r s e c t i o n 4 3 B, e v e n i f t h e a m o u n t s w e r e n o t d e p o s i t e d b e f o r e t h e d u e d a t e s p r es c r i b e d i n t h e r e s p e c t i v e A c t s ( P F & E S I A c t ) . ( i i i ) O n t h e o t h e r h a n d , t h e A s s e s s i n g O f f i c e r h a s n o t f o u n d t h e e x p e n d i t u r e a l l o w a b l e u / s 4 3 B o f t h e I . T . A c t . E m p l o y e e s c o n t r i b u t i o n t o P F a n d E S I i s d e e m e d a s i n c o m e o f th e e m p l o y e r u / s 2 ( 2 4 ) ( x ) , a n d t h e s a m e i s a l l o w a b l e a s d e d u c t i o n u / s 3 6 ( 1 ) ( v a ) o f t h e I . T . A c t . S e c t i o n 3 6 ( 1 ) ( v a ) s ti p u l a t e s t h a t s u c h p a y m e n t b y e m p l o y e r i s a l l o w e d o n l y i f s u c h s um i s c r e d i t e d t o t h e e m p l o y e e ' s a c c o u n t i n t h e r e l e v a n t f u n d o r f u n d s o n o r b e f o r e t h e d u e d a t e u n d e r t h e r e l e v a n t A c t . T h e A s s e s s i n g O f f i c e r h a s c o n c l u d e d t h a t s e c t i o n 3 6 ( 1 ) (v a ) i s a p p l i c a b l e i n r e s p e c t o f e m p l o y e e ' s c o n t r i b u t i o n t o P F a n d E S I , a n d i f t h e s a m e i s n o t d e p o s i t e d w i t h i n t h e d u e d a te p r e s c r i b e d u n d e r t h e r e s p e c t i v e A c t s , t h e s a m e d o e s n o t b e c o m e a l l o w a b l e I.T.A. No.2581/DEL/2018 3 b y v i r t u e o f s e c t i o n 4 3 B , e v e n i f i t i s d e p o s i t e d be f o r e t h e d u e d a t e o f f i l i n g o f I n c o m e T a x R e t u r n . A c c o r d i n g l y , th e A s s e s s i n g O f f i c e r h a s d i s a l l o w e d s u c h a m o u n t s o f e m p l o y e e ' s c o n t r i b u t i o n s w h e r e t h e d e p o s i t h a s b e e n m a d e b y t he a p p e l l a n t a f t e r t h e d u e d a t e s u n d e r t h e r e s p e c t i v e A c t s . ( i v ) A g g r i e v e d w i t h t h i s , t h e a p p e l l a n t h a s f i l e d t h e a p p e a l c l a i m i n g t h a t t h e a m o u n t s h o u l d b e a l l o w e d u / s 4 3 B a s i t h a s b e e n d e p o s i t e d b e f o r e t h e d u e d a t e o f f i l i n g o f r e tu r n . T h e a r g u m e n t s t a k e n b e f o r e t h e A O h a v e b e e n r e i t e r a t e d i n t h e a p p e a l . ( v ) I t i s p e r t i n e n t t o n o t e t h a t c o n t r i b u t i o n t o PF a n d E S I h a v e t w o d i f f e r e n t c o m p o n e n t s . T h e e m p l o y e e ' s c o n t ri b u t i o n i s d e d u c t e d f r o m t h e s a l a r y / w a g e s o f t h e e m p l o y e e s a n d t h e e m p l o y e r a l s o m a k e s c o n t r i b u t i o n . P F a n d E S I a r e i mp o r t a n t l e g i s l a t i o n f o r p r o v i d i n g s o c i a l s e c u r i t y t o e m p l o ye e s . U n d e r s e c t i o n 2 ( 2 4 ) ( x ) o f t h e I . T . A c t , a n y s u m r e c e i v e d b y a n a s s e s s e e f r o m i t s e m p l o y e e s a s c o n t r i b u t i o n t o P F or E S I i s d e e m e d t o b e i n c o m e o f t h e a s s e s s e e . T h e s a m e i s a ll o w e d a s a d e d u c t i o n u / s 3 6 ( 1 ) ( v a ) , i f i t i s c r e d i t e d i n t h e em p l o y e e ' s a c c o u n t i n t h e r e l e v a n t f u n d s b e f o r e d u e d a t e . A s pe r e x p l a n a t i o n t o t h i s c l a u s e , t h e d u e d a t e m e a n s t h e d a t e b y w h i c h t h e a s s e s s e e i s r e q u i r e d a s a n e m p l o y e r t o c re d i t a n e m p l o y e e ' s c o n t r i b u t i o n t o t h e e m p l o y e e ' s a c c o u n t un d e r t h e r e l e v a n t f u n d u n d e r a n y A c t , r u l e e t c . S e c t i o n 4 3 B p r o v i d e s f o r a l l o w a b i l i t y o f c e r t a i n d e d u c t i o n o n l y o n a c t u a l p a y m e n t . P r i o r t o 0 1 . 0 4 . 2 0 0 4 , t h e s e c o n d p r o v i s o t o s e c t i o n 4 3 B s pe c i f i e d t h e c o n d i t i o n s f o r a l l o w a b i l i t y u / s 3 6 ( 1 ) ( v a ) . T o b e a ll o w a b l e , c a s h p a y m e n t s w e r e r e q u i r e d t o b e m a d e o n o r b e f o r e t h e d u e d a t e p r e s c r i b e d u / s 3 6 ( 1 ) ( v a ) , a n d f o r p a y m e n t s m a d e o t he r t h a n i n c a s h , t h e s u m h a s t o b e r e a l i z e d w i t h i n 1 5 d a y s f r om t h e d u e d a t e . H o w e v e r , t h e s e c o n d p r o v i s o t o s e c t i o n 4 3 B w as o m i t t e d b y F i n a n c e A c t , 2 0 0 3 , w . e . f . 0 1 . 0 4 . 2 0 0 4 . T h i s h a d le d t o t h e I.T.A. No.2581/DEL/2018 4 c o n t r o v e r s y i n r e s p e c t o f t h e a l l o w a b i l i t y o f s u c h s u m s . T h e a p p e l l a n t ' s c o n t e n t i o n i s t h a t a f t e r d e l e t i o n o f s ec o n d p r o v i s o t o s e c t i o n 4 3 B w . e . f . 0 1 . 0 4 . 2 0 0 4 s u c h p a y m e n t s a r e n o w c o v e r e d u n d e r f i r s t p r o v i s o t o s e c t i o n 4 3 B , w h i c h al l o w s d e d u c t i o n f o r p a y m e n t s o f s u c h s u m s o n o r b e f o r e t he d u e d a t e o f f i l l i n g o f I n c o m e T a x R e t u r n . ( v i ) T h e r e a r e s e v e r a l j u d i c i a l p r o n o u n c e m e n t s d e al i n g o n t h i s i s s u e . T h e H o n b l e G u j a r a t H i g h C o u r t i n t h e c as e o f C I T v s . G u j a r a t S t a t e R o a d T r a n s p o r t C o r p o r a t i o n 3 6 6 I T R1 7 0 ( G u j a r a t ) ( 2 0 1 4 ) h a s d e a l t w i t h t h e i s s u e a n d h a s a na l y s e d t h e p r o v i s i o n s i n d e t a i l . ( v i i ) C B D T c i r c u l a r N o . 2 2 / 2 0 1 5 d a t e d 1 7 . 1 2 . 2 0 1 5 ha s f u r t h e r c l a r i f i e d a b o u t t h e d e l e t i o n o f s e c o n d p r o v i s o a n d a m e n d m e n t o f f i r s t p r o v i s o t o s e c t i o n 4 3 B a r e a p p l i c a b l e i n th e c a s e o f e m p l o y e r ' s c o n t r i b u t i o n t o P F a n d E S I a n d p a y m e n t s m a d e b e f o r e d u e d a t e o f f i l i n g o f R O I a r e a l l o w a b l e u / s 4 3 B . H o w e v e r , t h i s c i r c u l a r s t a t e s t h a t i t d o e s n o t a p p ly t o c l a i m o f d e d u c t i o n r e l a t i n g t o e m p l o y e e ' s c o n t r i b u t i o n t o w el f a r e f u n d s w h i c h a r e g o v e r n e d b y s e c t i o n 3 6 ( 1 ) ( v a ) . ( v i i i ) H o w e v e r , t h e H o n b l e D e l h i H i g h C o u r t i n i t s j u d g m e n t i n t h e c a s e o f C I T v s A I M I L L t d . ( 3 2 1 I T R 5 0 8 ) w h i l e ex a m i n i n g t h i s i s s u e i n 2 0 1 0 h a d h e l d t h a t n o d i s a l l o w a n c e c ou l d b e m a d e i n v i e w o f t h e p r o v i s i o n s o f s e c t i o n 4 3 B , a s a m e n d ed b y F i n a n c e A c t , 2 0 0 3 . ' R e s p e c t f u l l y f o l l o w i n g t h e d e c i s i o n b y t h e j u r i s d i ct i o n a l H i g h C o u r t , t h e d e p o s i t o f e m p l o y e e ' s c o n t r i b u t i o n o f P F a n d E S I o f R s . 3 , 5 7 , 1 3 , 6 9 7 / - b y t h e a p p e l l a n t . b e y o n d t h e d u e da t e u / s 3 6 (l ) ( v a ) , b u t b e f o r e t h e d u e d a t e o f f i l i n g o f I n co m e T a x R e t u r n , i s a l l o w e d . T h i s i s a l s o i n l i n e w i t h m a i n t a i n i n g ju d i c i a l d i s c i p l i n e o n t h i s i s s u e . T h e r e f o r e , t h i s g r o u n d i s a l l o w e d . ” I.T.A. No.2581/DEL/2018 5 4. Bo th th e pa rti es w e re he ar d i n le ng th o n t he i ssue in d is pu te. 5. On p er us al of th e rec ord s, we o bs e rve tha t t he Ass e ssi ng Of f icer ha s mad e the i mpu gn ed ad di tio n o n t he gr ou nd t hat th e ass es se e ha s de po s ite d e mpl o ye e ’s c o ntr ib ut io n to ward s Pro vi den t Fu nd a nd E SI a m ou nti ng t o R s. 3,5 7,1 3, 69 7/ - af ter d ue da te a s pre sc ri be d u nd er th e re le va nt Ac t/ R ul es in br ea ch of Ex pla na ti on 5 to Se ct io n 4 3B o f the Ac t. T he A sse ss in g Of f icer a cco rd in gl y res or te d to t he ad d iti on s u nde r S ec tio n 36 (1 )( va) rea d w ith Se cti on 2(2 4) (x ) of th e Ac t. 6. It i s t he ca se of t h e as se ss ee bef or e l ow er a ut ho ri tie s t h at i t has dep os it ed t he e mp lo ye e ’s c on tr ib u tio n in E P F and ES I bef or e th e due dat e of f ilin g of retur n of inc o me st ip ula te d un der Sec ti on 13 9(1 ) of t he Ac t. 7. W e f in d t ha t th e i d ent ic al i ss ue ha s b een de ci ded in f a v our of the as se sse e b y t he Hon ’b le Del hi Hi g h Co ur t i n th e ca se of Pr. CI T vs. Pr o I nt er ac ti v e Se rv ic e ( In di a) Pvt . L td . v id e o r der d ate d 10. 09 .2 01 8 i n I T A N o. 98 3/2 01 8. T he e xt rac t of t he jud g men t i s rep ro du ce d a s un de r: “ I n v i e w o f t h e j u d g m e n t o f t h e D i v i s i o n B e n c h o f De l h i H i g h C o u r t i n C o m m i s s i o n e r o f I n c o m e - T a x v e r s u s A i m i l L im i t e d , ( 2 0 1 0 ) 3 2 1 I T R 5 0 8 ( D e l ) t h e i s s u e i s c o v e r e d a g a i n s t t h e R e v e n u e a n d , t h e r e f o r e , n o s u b s t a n t i a l q u e s t i o n o f l a w a r i s e s f or c o n s i d e r a t i o n i n t h i s a p p e a l . T h e l e g i s l a t i v e i n t e n t w a s / i s t o e n s u r e t h a t t h e am o u n t p a i d i s a l l o w e d a s a n e x p e n d i t u r e o n l y w h e n p a y m e n t i s a c t ua l l y m a d e . We d o n o t t h i n k t h a t t h e l e g i s l a t i v e i n t e n t a n d o b j e c ti v e i s t o t r e a t b e l a t e d p a y m e n t o f E m p l o y e e ' s P r o v i d e n t F u n d ( E P F ) a n d E m p l o y e e ' s S t a t e I n s u r a n c e S c h e m e (E S I ) a s d e e m e d in c o m e o f t h e I.T.A. No.2581/DEL/2018 6 e m p l o y e r u n d e r S e c t i o n 2 ( 2 4 ) ( x ) o f t h e A c t . ” 8. W e a ls o ta ke no te of the p le a of th e as se ss ee t ha t de la ye d pa yme nt of e mp lo yee’ s co nt ri bu ti on t o PF /E SI C i s not d isa ll ow ab le as th e a me nd me nts to S ect io n 3 6(1 )( va ) and Se cti on 43 B ef f ected b y Fi nan ce A ct , 20 2 1 we re ap pl ic ab le pro spe ct iv el y in rela ti on t o As ses s me nt Ye ar 20 21- 22 a nd s ub s equ en t ye a rs . Th e ref or e, th e cla i m of de du ct io n of contr ib ut io n to E mp lo ye e ’s Sta te Insu ra nc e Sc he me (E SI ) an d Pr ovi de nt F un d u/ s .36 (1 )( va ) co uld no t be de ni ed to t he as se ss ee i n As ses s me nt Yea r 2 01 8-1 9 i n q ue stio n on t he ba si s of a me nd me nt s ma de b y Fi na nc e Ac t, 20 21. Fo r th is pro p osi ti on , we f ind su pp ort f ro m t he dec is io n of th e Co -or di na te Be nc h of Tri bu na l in the c ase of T he Co nt in en tal R es ta ur an t a nd C afé C o mpa ny vs . IT O as re po rte d i n (2 02 1) 9 1 I TR (Tr ib .) (S .N .) 6 0 (Ba ng .) a nd Ady a r An an da B ha va n Sw eets In di a P . Lt d. v s. AC IT , IT A No. 4 02 a nd 40 3/ C hny / 20 21 o rd er d a ted 08 .1 2.2 02 1. Co nse qu en tl y, we se e no er ro r i n the o rd er of t he CI T( A) an d the ref o re de cl in e t o int erf er e. 9. In th e res ul t, t he ap pea l of th e Re ve nu e is d is mi ss ed . Order was pronounced in the open Court on 24/03/2022. Sd/- Sd/- [KUL BHARAT] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24/03/2022 Prabhat