KCI Bearings (India) Pvt. Ltd., Surendranagar V. The Jt. Commr. of Income Tax, Surendranagar Range, Surendranagar

ITA 28/RJT/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6633 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 20-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY , MEMBER ITA NO. 28 / RJT /201 5 : ASS T. YEAR : 2011 - 12 KCI BEARINGS (INDIA) PVT. LTD., KCI COMPOUND, OLD JUNCTION ROAD, NEAR WATER TANK, SURENDRANAGAR 363 001. PAN : AABCT1214H (APPELLANT) VS JCIT, SURENDRANAGAR RANGE, SURENDRANAGAR (RESPONDENT) APPELLANT BY : MS. DEVINA PATEL, CA RESPONDENT BY : MS. USHA SHROTE, DR DATE OF HEARING : 2 3 /0 3 /201 7 DATE OF PRONOUNCEMENT : 24 /0 3 /201 7 O R D E R PER K. NAR A SIMHA CHARY, MEMBER, JM : THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE ORDER DATED 2 6 . 2 .201 4 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 7 , AHMEDABAD (FOR SHORT HEREINAFTER REFERRED TO AS LD. CIT(A) ) IN APPEAL NO.CIT(A) - 7 / 350 / 13 - 14. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DOMESTIC COMPANY WHEREIN THE PUBLIC ARE NOT INTERESTED AND THE BUSINESS OF THE ASSESSEE IS IN SALES AND MANUFACTURING OF TRANSMISSION BEARINGS, ENGINE BEARINGS, STEERING BEARINGS, ETC. FOR THE ASSESSM ENT YEAR 2011 - 12, IT 2 KCI BEARINGS (INDIA) PVT. LTD. ITA NO. 28/RJT/2015 HAS FILED RETURN OF INCOME ON 28.9.2012 DECLARING TOTAL INCOME OF RS.1,86,02,570/ - . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT A SUM OF RS.2,80,900/ - TOWARDS THE PROVIDENT FUND AND EMPLOYEES INSURANCE CORPORAT ION WAS REMITTED TO THE GOVERNMENT ACCOUNT BEYOND THE DUE DATE OF PAYMENT. THE ASSESSING OFFICER HELD THAT SEC. 43B OF THE INCOME TAX ACT, 1961 (FOR SHORT HEREINAFTER REFERRED TO AS THE ACT ), WHICH PERMITS THE DEDUCTION OF PAYMENTS MADE UP TO THE DUE DA TE FOR FILING THE RETURN APPLIES ONLY TO THE EMPLOYE R S CONTRIBUTION TO THE PROVIDE NT FUND, BUT NOT TO THE EMPLOYEE S CONTRIBUTION AND ACCORDINGLY, ADDED, INTER - ALIA, THE SAID AMOUNT TO THE INCOME OF ASSESSEE. APPEAL TO THE LD. CIT(A) ENDED UP IN CONFIRMAT ION OF THIS ADDITION. HENCE, ASSESSEE IS BEFORE US IN THIS APPEAL. 3. AT THE TIME OF ARGUMENTS, LD. AR FAIRLY BROUGHT TO OUR NOTICE THAT THOUGH IN THE CASE OF CIT VS STATE BANK OF BIKANER & JAIPUR, [2014] 363 ITR 0070 (RAJ) THOUGH IT WAS HELD THAT WHERE PF AND/OR EPF, CPF, GPF ETC., IF PAID AFTER DUE DATE UNDER RESPECTIVE ACT BUT BEFORE FILING OF RETURN OF INCOME U/S 139(1), COULD NOT BE DISALLOWED U/S 43B OR U/S 36(1)(VA), BUT THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS STATE ROAD TRANSPO RT CORPORATION, [2014] 366 ITR 170 (GUJ) HAS HELD AS FOLLOWS : - CONSIDERING SECTION 36(1) (VA) OF THE INCOME TAX ACT AS IT STANDS, WITH RESPECT TO ANY SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH THE PROVISIONS OF CLAUSE (X) OF SUB - SEC TION (24) OF SECTION 2 APPLIES, ASSESSEE SHALL NOT BE ENTITLED TO DEDUCTION OF SUCH AMOUNT IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 IF SUCH SUM 3 KCI BEARINGS (INDIA) PVT. LTD. ITA NO. 28/RJT/2015 WA S NOT CREDITED BY THE ASSESSEE TO THE EMPLOYEES' ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE T HE DUE DATE AS PER EXPLANATION TO SECTION 36(1)(VA) OF THE ACT. MERELY BECAUSE SECOND PROVISO TO SECTION 43B OF THE ACT IN WHICH THERE WAS A REFERENCE TO DUE DATE AS DEFINED IN EXPLANATION BELOW CLAUSE (VA) OF SUB - SECTION (1) OF SECTION 36, IT CANNOT BE HE LD THAT EVEN SECTION 36(1)(VA) WA S AMENDED AND/OR EVEN EXPLANATION BELOW CLAUSE (VA) OF SUB - SECTION (1) OF SECTION 36 WA S ALSO DELETED. IT CAN BE SAID THAT THERE WAS A REFERENCE TO EXPLANATION BELOW CLAUSE (VA) OF SUB - SECTION (1) OF SECTION 36 IN SECOND PR OVISO OF SECTION 43B (WHICH HAS BEEN DELETED BY FINANCE ACT, 2003), ONLY FOR THE PURPOSE OF DEFINING DUE DATE AS PER EXPLANATION BELOW CLAUSE (VA) OF SUB - SECTION (1) OF SECTION 36. THEREFORE, BY DELETING SECOND PROVISO TO SECTION 43B BY FINANCE ACT, 2003, IT CANNOT BE SAID THAT SECTION 36(1) (VA) IS AMENDED AND/OR EXPLANATION BELOW CLAUSE (VA) OF SUB - SECTION (1) OF SECTION 36 WA S DELETED, WHICH IS WITH RESPECT TO EMPLOYEES' CONTRIBUTION . CONSIDERING SECTION 36(1)(VA) OF THE INCOME TAX ACT, 1961 READ WITH SUB - CLAUSE (X) OF CLAUSE 24 OF SECTION 2, IT IS HELD THAT WITH RESPECT TO THE SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH PROVISIONS OF SUB - CLAUSE (X) OF CLAUSE (24) OF SECTION (2) APPLIES, THE ASSESSEE SHALL BE ENTITLED TO DEDUCTION IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 WITH RESPECT TO SUCH SUM CREDITED BY THE ASSESSEE TO THE EMPLOYEES' ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE 'DUE DATE' MENTIO NED IN EXPLANATION TO SECTION 36(1)(VA). CONSEQUENTLY, IT IS HELD THAT THE LEARNED TRIBUNAL HAD ERRED IN DELETING RESPECTIVE DISALLOWANCES BEING EMPLOYEES' CONTRIBUTION TO PF ACCOUNT / ESI ACCOUNT MADE BY THE AO AS, AS SUCH, SUCH SUMS WERE NOT CREDITED BY THE RESPECTIVE ASSESSEE TO THE EMPLOYEES' ACCOUNTS IN THE RELEVANT FUND OR FUNDS (IN THE PRESENT CASE PROVIDENT FUND AND/OR ESI FUND ON OR BEFORE THE DUE DATE AS PER THE EXPLANATION TO SECTION 36(1)(VA) OF THE ACT I.E. DATE BY WHICH THE CONCERNED ASSESSEE WAS REQUIRED AS AN EMPLOYER TO CREDIT EMPLOYEES' CONTRIBUTION TO THE EMPLOYEES' ACCOUNT IN THE PROVIDENT FUND UNDER THE PROVIDENT FUND ACT AND/OR IN THE ESI FUND UNDER THE ESI ACT. CONSEQUENTLY, ALL THESE APPEALS ARE ALLOWED AND THE IMPUGNED JUDGEMENT AND ORDERS PASSED BY THE TRIBUNAL IN DELETING THE DISALLOWANCES MADE BY THE AO WAS 4 KCI BEARINGS (INDIA) PVT. LTD. ITA NO. 28/RJT/2015 HEREBY QUASHED AND SET ASIDE AND THE DISALLOWANCES OF RESPECTIVE SUMS WITH RESPECT TO THE PROVIDENT FUND / ESI FUND MADE BY THE AO WAS HEREBY RESTORED. QUESTIONS RAISED IN PRES ENT APPEAL ARE ANSWERED IN FAVOUR OF REVENUE. WITH THIS, ALL THESE APPEALS ARE ALLOWED. 4. THE LD. DR ACCEPTS THIS LEGAL POSITION. 5. ON A PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT , AS A MATTER OF FACT, BOTH THE AUTHORITIES BELOW RELIED UPON THIS BINDING PRECEDENT OF THE HON BLE JURISDICTIONAL HIGH COURT WHILE MAKING THE ADDITION AND IN VIEW OF THIS DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT, WE FIND THE SAID ORDERS CANNOT BE INTERFERED WITH. WE, THEREFORE, DO NOT FIND ANY GROUND TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW, AS SUCH, WHILE RECORDING THE SAME, WE DISMISS THE APPEAL OF ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 4 T H MARCH, 2017. SD/ - D / - S D / - S D / - S D / - / - ( S.V. MEHROTRA ) ACCOUNTANT MEMBER ( K. NARASIMHA CHARY ) JUDICIAL MEMBER RAJKOT , DATE : MARCH , 201 7 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, RAJKOT 6) GUARD FILE BY ORDER D Y . / ASSTT. REGISTRAR I.T.A.T, RAJKOT