RMP Bearings Ltd., Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-3(1)(2), Ahmedabad

ITA 2677/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4348 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: BIREN SHAH
• Keywords: Set aside
• Section: 201

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI AMARJIT SINGH , ACCOUNTANT MEMBER AND MS MADHUMITA ROY, JUDICIAL MEMBER ./ ITA NO. 2677 /AHD/2017 & / ASSTT. YEAR: 2014 - 201 5 RMP BEARING LIMITED, 8, PRAGATISHIL SOCIETY , OPP. MANGAL MITRY HALL, PALDI, AHMEDABAD - 380007. PAN: AABCR0266K VS . DCIT, CIRCLE - 3(1)(2), AHMEDABAD. (APPLICANT) (RESPONENT) ASSESSEE BY : SH RI BIREN SHAH, A.R REVENUE BY : SHRI MUDIT NAGPAL, SR.D.R, / DATE OF HEARING : 07 / 03 / 201 9 / DATE OF PRONOUNCEMENT: 20 / 03 /201 9 / O R D E R PER MS MADHUMITA ROY, JUDICIAL MEMBER : THE INSTANT APPEA L FILED BY THE ASSESSEE IS AGAINST THE ORDER DATED 10.10.2017 PASSED BY THE LEARNED COMMI SSIONER OF INCOME TAX(APPEALS) - 9 , AHMEDABAD, U/S 143 OF THE INCOME TAX ACT 1961 (HEREIN AFTER REFER RED TO AS THE ACT ) A RISING OUT OF THE ORDER DATED 21.11.2016 PASSED BY THE LD.A.O FOR THE ASSESSMENT YEAR 2014 - 15 , WHEREBY AND WHERE UNDER THE EMPLOYEES CONTRIBUTION TO WARDS PROVIDENT FUND AND ESI OF RS.41,51,538/ - HAS BEEN DISALLOWED. ITA NO. 2677 /AHD/2017 A.Y. 2014 - 2015 2 2. THE BRIEF FACT RELEVANT TO THIS CASE IS THIS THAT FROM THE TAX AUDIT REPORT IT WAS FOUND BY THE LD.AO THAT CERTAIN AMOUNT RECEIVED BY THE ASSESSEE BY WAY OF EMPLOYEES CONTRIBUTION S TO WARDS PROVIDENT FUND AND ESI HAS NOT BEEN DEPOSITED BY THE ASSESSEE IN TH E EMPLOYEE S ACCOUNT IN THE RELEVANT FUND ON OR BEFORE THE DUE DATE. A SHOWCAUSE NOTICE WAS ISSUED. THE ASSESSEE ALSO FURNISH ED ITS REPLY. HOWEVER, RELYING ON THE JUDGMENT PASSED BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROA D TRANSPORT CORPORATION REPORTED IN (2014) 366 ITR 170 (GUJ.) T HE LD.AO DISALLOWED THE CLAIM OF THE ASSESSEE AND ADDED RS.41,51,538/ - TO THE TOTAL INCOME OF THE ASSESSEE WHICH WAS CONFIRMED BY THE FIRST APPELLATE AUTHORITY. HENCE, THE INSTANT APPEAL B EFORE US. 3 . AT THE TIME OF HEARING OF INSTANT APPEAL THE LD.ADVOCATE APPEARING FOR THE ASSESSEE SUBMITTED BEFORE U S THAT THE ISSUE INVOLVED IN THIS PARTICULAR CASE IS PENDING BEFORE THE HON BLE SUPREME C OURT AND IN THAT VIEW OF THE MATTER THE ISSUE MAY BE SET ASIDE TO THE FILE OF LD.AO TO DECIDE THE SAME AFTER TAKING INTO ACCOUNT TH E ORDER PASSED BY THE HON BLE SUPREME COURT. A COPY OF THE ORDER PASSED BY THE CO - ORDINATE BENCH ORDER BEARING ITA NO.1585/AHD/2 018 FOR ASSESSMENT YEAR 2015 - 16 IN THAT LIN E HAS ALSO BEEN HANDED OVER TO US . 4 . THE LD. REPRESENTATIVE OF THE DEPARTMENT IN SUPPORT OF THE IMPUGNED ORDER RELIED UPON THE JUDGMENT PASSED BY THE HON BLE JURISDICTIONAL HIGH COURT PASSED IN THE MATTER OF M /S CHECKMATE FACILITY AND ELECTRONIC SOLUTION PVT. LTD VS. DCIT, CIRCLE - 1 WHERE DISALLOWANCE MADE BY THE AUTHORITIES BELOW IN TERM OF SECTION 2(24) (X) R.W.S 36(1)(VA) OF THE ACT HAS BEEN UPHELD. ITA NO. 2677 /AHD/2017 A.Y. 2014 - 2015 3 5 . WE HAVE HEARD THE RESPECTIVE PARTIES, PERUSED THE RE LEVANT MATERIAL S AVAILABLE ON RECORD. THE ASSESSEE ADMITTEDLY HAS FAILED TO DEPOSIT THE EMPLO YEES CONTRIBUTION IN RESPECT OF PROVIDENT FUND AND ESI AMOUNTING TO RS.41,51,538/ - AS PER THE RESPECTIVE DUE DATES MENTIONED IN THE CONCERNED ACT. THUS THE SAID AM OUNT HAS BEEN ADDED TO THE TOTAL INCOME OF THE ASSESSEE WHICH IN TURN WAS CONFIRMED BY THE LD.CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE JUDGMENT RELIED UPO N BY THE LD.DR IN THIS RESPECT RELEVANT PORTION OF THE SAID JUDGMENT IS AS FOLLOWS: 4. IN TERMS OF SECTION 36(1) (VA) OF THE ACT, ANY SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH THE PROVISIONS OF SECTION 2(24)(X) APPLIES, WOULD BE DEDUCTED AS LONG AS SUCH SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEE'S ACCOUNT IN THE RELEV ANT FUNDS ON OR BEFORE DUE DATE. EXPLANATION TO THE SAID SUB - SECTION PROVIDES THAT FOR THE PURPOSE OF THE SAID CLAUSE, 'DUE DATE' MEANS A DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT AN EMPLOYEE'S CONTRIBUTION TO THE ACCOUNT IN WHICH REL EVANT FUND UNDER ANY ACT, RULE, ORDER OR NOTIFICATION ISSUED THEREUNDER OR UNDER ANY STANDING ORDER, AWARD, CONTRACT OF SERVICE OR OTHERWISE. SECTION 38 OF THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952, BECOMES RELEVANT. SUB - SECTION (1) THEREOF READS AS UNDER: '(1) THE EMPLOYER SHALL, BEFORE PAYING THE MEMBER HIS WAGES IN RESPECT OF ANY PERIOD OR PART OF PERIOD FOR WHICH CONTRIBUTIONS ARE PAYABLE, DEDUCT THE EMPLOYEE'S CONTRIBUTION FROM HIS WAGES WHICH TOGETHER WITH HIS OWN CONTRIBUT ION AS WELL AS AN ADMINISTRATIVE CHARGE OF SUCH PERCENTAGE [OF THE PAY (BASIC WAGES, DEARNESS ALLOWANCE, RETAINING ALLOWANCE, IF ANY, AND CASH VALUE OF FOOD CONCESSIONS ADMISSIBLE THEREON) FOR THE TIME BEING PAYABLE TO THE EMPLOYEES OTHER THAN AN EXCLUDED EMPLOYEE, AS THE CENTRAL GOVERNMENT MAY FIX. HE SHALL WITHIN FIFTEEN DAYS OF THE CLOSE OF EVERY MONTH PAY THE SAME TO THE FUND 'ELECTRONIC THROUGH INTERNET BANKING OF THE STATE BANK OF INDIA OR ANY OTHER NATIONALIZED BANK AUTHORIZED FOR COLLECTION' ON ACCO UNT OF CONTRIBUTIONS AND ADMINISTRATIVE CHARGE]: 'PROVIDED THAT THE CENTRAL PROVIDENT FUND COMMISSIONER MAY FOR REASONS TO BE RECORDED IN WRITING, ALLOW ANY EMPLOYER OR CLASS OF EMPLOYER TO DEPOSIT THE CONTRIBUTIONS BY ANY OTHER MODE OTHER THAN INTERNET B ANKING'. ITA NO. 2677 /AHD/2017 A.Y. 2014 - 2015 4 5. THIS PROVISION THUS REQUIRES AN EMPLOYER BEFORE PAYING THE EMPLOYEE HIS WAGES TO DEDUCT THE EMPLOYEE'S CONTRIBUTION ALONG WITH THE EMPLOYER'S OWN CONTRIBUTION AS FIXED BY THE GOVERNMENT. IT IS FURTHER REQUIRED THAT HE SHALL WITHIN FIFTEEN DAYS OF THE CLOSE OF EVERY MONTH PAY THE SAME TO THE FUND SUCH CONTRIBUTION AND ADMINISTRATIVE CHARGES. IN TERMS OF THIS PROVISION THUS, AFTER DEDUCTING THE EMPLOYEE'S CONTRIBUTION TOWARDS THE FUNDS, THE SAME HAS TO BE DEPOSITED WITH THE GOVERNMENT WITHIN FIFT EEN DAYS OF THE CLOSE OF EVERY MONTH. REFERENCE TO FIFTEEN DAYS OF THE CLOSE OF THE MONTH MUST BE IN RELATION TO THE MONTH DURING WHICH THE PAYMENT OF WAGES IS TO BE MADE AND CORRESPONDING LIABILITY TO DEDUCT EMPLOYEE'S CONTRIBUTION TO THE FUND ARISES. THE EXPRESSION 'WITHIN FIFTEEN DAYS OF THE CLOSE OF EVERY MONTH' THEREFORE MUST BE INTERPRETED AS HAVING REFERENCE TO THE CLOSE OF THE MONTH, FOR WHICH, THE WAGES ARE REQUIRED TO BE PAID WITH CORRESPONDING DUTY TO DEDUCT EMPLOYEE'S CONTRIBUTION AND TO DEPOSIT THE SAME IN THE FUND. 6. LEARNED COUNSEL FOR THE APPELLANT IS THEREFORE NOT CORRECT IN CONTENDING THAT IF SUCH WAGES ARE PAID IN THE FOLLOWING MONTH, THE LIABILITY TO DEPOSIT THE EMPLOYEE'S CONTRIBUTION TO THE FUND GETS DIFFERED BY ANOTHER MONTH. 7. TA X APPEAL IS THEREFORE DISMISSED 6.1 WE HAVE ALSO CAREFULLY CONSIDERED THE ORDER PASSED BY THE CO - ORDINATE BENCH ON THE SIMILAR ISSUE . H OWEVER, WE ARE NOT PERSUADED BY THE SUBMISSION S MADE BY THE LD.COUNSEL APPEARING FOR THE ASSESSEE BECAUSE OF THE PARTICULAR REASONS THAT THE HON BLE J URISDICTIONAL HIGH COURT HAS ALREADY SETTLED THE ISSUE WHICH HAS NOT YET BEEN UNSETTLED BY THE HON BLE APEX COURT. WE NEED TO FOLLOW TH E WELL SETTLE D PRINCIPLE OF LAW LAID DO WN BY T HE JURISDICTIONAL HIGH COURT IN THIS REGARD . I N THAT VIEW OF THE M ATTER WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE AUTHORITIES BELOW IN DISALLOWING EMPLOYEES CONTRIBUTION IN RESPECT OF PROVIDENT FUND AND ESI AMOUNTING TO RS.41,51,538/ - AS PER T HE PROVISION OF SECTION 2(24) (X) R.W 36(1)(5A) OF THE ACT. ITA NO. 2677 /AHD/2017 A.Y. 2014 - 2015 5 6.2 RESPECTFULLY FOLLOWING THE JUDGMENT PASSED BY THE JURISDICTIONAL HIGH COURT WE FIND ASSESSEE S APPEAL IS DEVOID OF ANY MERIT. HENCE, D ISMISSED. 7 . IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS DISMISSED ORDER PRONOUNCED IN THE COURT ON 20 /03 /2019 AT AHMEDABAD. - SD - - SD - ( AMARJIT SINGH ) ACCOUTANT MEMBER ( MS MADHUMITA ROY ) JUDICIAL MEMBER (TRUE COPY) AHMEDABAD; DATED 20 / 03 /201 9 MANISH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD