Utsav Food Products, Kheda V. The Asstt. Commissioner of Income Tax, Kheda Circle, Nadiad

ITA 2765/AHD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7974 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 25-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 43B

Judgement Text

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D.R. / DATE OF HEARING 06/12/2017 !'# / DATE OF PRONOUNCEMENT 18/12/2017 $% / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THESE ARE TWO APPEALS BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-2, VADODARA, DA TED 26/07/2016 FOR THE ASSESSMENT YEARS (AYS) 2011-12 AND 2012-13. 2. SINCE IN BOTH APPEALS ISSUES ARE COMMON ONLY FIG URES AND ASSESSMENT YEARS ARE DIFFERENT THEREFORE FOR THE SA KE OF CONVENIENCE, WE WOULD LIKE TO DISPOSE OF BOTH THE APPEALS BY WAY OF A COMMON ORDER. IN THESE APPEALS FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: ITA NOS.2764 & 2765/AHD/2016 UTSAV FOOD PRODUCTS VS. ACIT ASST.YEARS 2011-12 & 2012-13 - 2 - 2.1 IN ITA NO.2764/AHD/2016 FOR ASST. YEAR 2011-12: 1. THE RECTIFICATION ORDER PASSED U/S.154 OF IT ACT BY THE ASSESSING OFFICER AND PARTLY CONFIRMED BY THE FIRST APPELLATE AUTHORITY IS BAD IN LAW AND DESERVES TO BE QUASHED. 2. THE ASSESSING OFFICER AS WELL AS FIRST APPELLATE AUTHORITY HAS ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCES & CONFIRMING RESPECTIVELY CONTRIBUTION TO EMPLOYEE'S PROVIDENT F UND AMOUNTING TO RS.3,75,431/-. THE SAME DESERVES TO BE DELETED. 3. THE APPELLANT CRAVES TO RESERVE HIS RIGHT TO ADD , ALTER, AMEND, OR DELETE ANY GROUND OF APPEAL DURING THE COURSE OF HE ARING. 2.2 IN ITA NO.2765/AHD/2016 FOR ASST. YEAR 2012-13: 1. THE RECTIFICATION ORDER PASSED U/S.154 OF IT ACT BY THE ASSESSING OFFICER AND PARTLY CONFIRMED BY THE FIRST APPELLATE AUTHORITY IS BAD IN LAW AND DESERVES TO BE QUASHED. 2. THE ASSESSING OFFICER AS WELL AS FIRST APPELLATE AUTHORITY HAS ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCES & CONFIRMING RESPECTIVELY CONTRIBUTION TO EMPLOYEE'S PROVIDENT F UND AMOUNTING TO RS.4,30,703/-. THE SAME DESERVES TO BE DELETED. 3. THE APPELLANT CRAVES TO RESERVE HIS RIGHT TO ADD , ALTER, AMEND, OR DELETE ANY GROUND OF APPEAL DURING THE COURSE OF HE ARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FIRM FILED ITS RETURN OF INCOME ON 28/09/2011 SHOWING TOTAL INCOME AT RS. 30,46,690/-. ASSESSMENT U/S.143(3) WAS COMPLETED ON 12/03/2014 D ECLARING TOTAL INCOME AT RS.30,78,340/-. ON PERUSAL OF THE ASSESSM ENT RECORD PARTICULARLY SCHEDULE-M TO COLUMN 16(B) OF FORM 3CD , AO NOTICED THAT ASSESSEE FIRM DEPOSITED PROVIDENT FUND TO THE TUNE OF RS.8,01,230/- BEYOND THE PRESCRIBED LIMIT. IN VIEW OF THE PROVISI ONS OF SECTION 2(24)(X) R.W.S. 36(L)(VA), THE PROVIDENT FUND WAS NOT DEPOSI TED IN THE RESPECTIVE ACCOUNT WITHIN THE TIME LIMIT PRESCRIBED UNDER PROV IDENT FUND ACT, THE SAME WAS REQUIRED TO BE INCLUDED IN THE TOTAL INCOM E OF THE ASSESSEE. ITA NOS.2764 & 2765/AHD/2016 UTSAV FOOD PRODUCTS VS. ACIT ASST.YEARS 2011-12 & 2012-13 - 3 - SINCE THE ASSESSEE DID NOT INCLUDE THE ABOVE MENTIO NED AMOUNT OF PROVIDENT FUND PAID BELATEDLY IN THE TOTAL INCOME, THE AO ISSUED NOTICE U/S.154 DATED 23/06/2015 FOR PROPOSED RECTIFICATION . IN RESPONSE TO THE NOTICE U/S.154, THE ASSESSEE SUBMITTED BEFORE THE A O THAT CONTRIBUTION TO THE PROVIDENT FUND WAS DEPOSITED BEFORE THE DUE DAT E OF FILING OF RETURN OF INCOME AND HENCE THERE WAS NO REQUIREMENT FOR RE CTIFICATION U/S.154 IN VIEW OF THE JUDGMENTS OF VARIOUS COURTS. 3.1 AFTER CONSIDERING THE SUBMISSION OF THE ASSESSE E AND ALSO REPRODUCING THE PROVISIONS OF SECTION 2(24)(X) AND 36(L)(VA), THE AO WAS OF THE VIEW THAT THE DUE DATE FOR PAYMENT OF EMPLOY EES CONTRIBUTION TO THE PROVIDENT FUND ACCOUNT IS THE DATE PRESCRIBED U NDER THE PROVIDENT FUND ACT, WHICH IS 20 TH DAY OF THE FOLLOWING MONTH. ACCORDINGLY, THE AO PASSED RECTIFICATION ORDER AFTER MAKING AN ADDITION OF RS.8,01,230/- ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND, WHICH WAS NOT DEPOSITED IN THE RESPECTIVE ACCOUNT WITHIN THE TIME PRESCRIBED UNDER THE PROVIDENT FUND ACT. AGGRIEVED THE ASSESSEE FILED TH E APPEAL AND SAME WAS PARTLY ALLOWED BY THE LD. CIT(A). NOW APPEAL IS BEFORE US. 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. IN THIS CASE, APPELLANT HAS CHALLENGED RECTIFICATION O RDER PASSED U/S.154 BY THE AO AND CONFIRMED BY THE LD. CIT(A) AND IT IS FA CT THAT EXPLANATION OF SECTION 36(1)(VA) STATES THAT DUE DATE MEANS THAT THE DATE BY WHICH ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT THE E MPLOYEES' CONTRIBUTION TO THE EMPLOYEES' ACCOUNT IN THE RELEVANT FUND UNDER ANY ACT, RULE, ITA NOS.2764 & 2765/AHD/2016 UTSAV FOOD PRODUCTS VS. ACIT ASST.YEARS 2011-12 & 2012-13 - 4 - ORDER OR NOTIFICATION ISSUED THEREUNDER. IF ANY SUM WAS RECEIVED BY THE EMPLOYER AS EMPLOYEES' CONTRIBUTION TO THE PROVIDEN T FUND, THE SAME IS DEEMED TO BE THE INCOME U/S.2(24)(X). THIS MATTER HAS BEEN DEALT BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. GUJARAT STATE ROAD TRANSPORT CORPORATION RELEVANT PARA OF THE SAME IS REPRODUCED HERE AS UNDER: ' SECTION 43B, READ WITH SECTION 36(1)(VA) OF THE INC OME-TAX ACT, 1961 - BUSINESS DISALLOWANCE - CERTAIN DEDUCTIONS TO BE AL LOWED ON ACTUAL PAYMENT (EMPLOYEE CONTRIBUTION) - WHETHER WHERE AN EMPLOYER HAS NOT CREDITED SUM RECEIVED BY IT AS EMPLOYEES' CONTRIBUT ION TO EMPLOYEES' ACCOUNT IN RELEVANT FUND ON OR BEFORE DUE DATE AS P RESCRIBED IN EXPLANATION TO SECTION 36(1)(VA), ASSESSES SHALL NOT BE ENTITLED TO DEDUCTION OF SUCH AMOUNT THOUGH HE DEPOSITS SAME BE FORE DUE DATE PRESCRIBED UNDER SECTION 43B I.E., PRIOR TO FILING OF RETURN UNDER SECTION 139(1) - HELD, YES - ASSESSEE STATE TRANSPORT CORPO RATION COLLECTED A SUM BEING PROVIDENT FUND CONTRIBUTION FROM ITS EMPL OYEES - HOWEVER, IT HAD DEPOSITED LESSER SUM IN PROVIDENT FUND ACCOUNT - ASSESSING OFFICER DISALLOWED SAME UNDER SECTION 43B - HOWEVER, COMMIS SIONER (APPEALS) DELETED DISALLOWANCE ON GROUND THAT EMPLOYEE, CONTR IBUTION WAS DEPOSITED BEFORE FILING RETURN - WHETHER SINCE ASSESSES HAD NO DEPOSITED SAID CONTRIBUTION IN RESPECTIVE FUND ACCOUNT ON DAT E AS PRESCRIBED IN EXPLANATION TO SECTION 36(1)(VA), DISALLOWANCE MADE BY ASSESSING OFFICER WAS JUST AND PROPER - HELD, YES [PARA 8] [I N FAVOUR OF REVENUE]' 5. IN VIEW OF THE ABOVE JUDGMENT WE CONFIRM THE IMP UGNED ORDER AND DISMISS THE APPEAL OF THE ASSESSEE. 6. SO FAR ITA NO.2765/AHD/2016 FOR ASST. YEAR 2012- 13 IS CONCERNED, FINDING OF ABOVE SAID MATTER WILL APPLY. THEREFORE, THIS APPEAL IS ALSO DISMISSED. ITA NOS.2764 & 2765/AHD/2016 UTSAV FOOD PRODUCTS VS. ACIT ASST.YEARS 2011-12 & 2012-13 - 5 - 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18/12/2017 SD/- SD/- VEJTHR FLAG VEJTHR FLAG VEJTHR FLAG VEJTHR FLAG &' $ ( $ ) ()* $ ) ( AMARJIT SINGH ) ( MAHAVIR PR ASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 18/12/2017 PRITI YADAV, SR. PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , -. / / CONCERNED CIT 4. / () / THE CIT(A)-2, VADODARA. 5. 012 **-. , -.# , '&$,$ / DR, ITAT, AHMEDABAD 6. 245 6 / GUARD FILE. % & / BY ORDER, 0 * //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD