DCIT-14(1)(2), MUMBAI V. EYEGLOBAL TECHNOLOGIES PVT. LTD., MUMBAI

ITA 2844/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8888 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2016
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI BEFORE SHRI JASO N P BOAZ , AM & SHRI RAM LAL NEGI , JM ITA NO. 2844 / MUM/20 1 6 ( ASSESSMENT YEAR : 2011 - 12 ) DCIT 14(1)(2), MUMBAI VS. M/S.EYEGLOBAL TECHNOLOGIES PVT. LTD., 4 TH FLOOR, MAFATLAL HOUSE, BACKBAY RECLAMATION, MUMBAI - 400020 PAN/GIR NO. AAACE9595R APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI RAJAT MITTAL ASSESSEE BY NONE DATE OF HEARING 02/01/2017 DATE OF PRONOUNCEME NT 04 / 01 /201 7 / O R D E R PER JASON P BOAZ (A.M) : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 8, MUMBAI DATED 19/01/2016 FOR A.Y.2011 - 2012. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1. THE ASSESSEE, A COMPANY ENGAGED IN THE B USINESS OF INFORMATION TECHNOLOGY SERVICES AND HUMAN RESOURCING SERVICES FILED ITS RETURN OF INCOME FOR A.Y. 2011 - 12 ON 27/09/2011 DECLARING INCOME OF RS.99,41,528/ - . THE RETURN WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT 1961 (IN SHORT THE A CT) AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT VIDE ORDER ITA NO. 2844/MUM/2016 M/S. EYEGLOBAL TECHNOLOGIES PVT. LTD., 2 DATED 24/02/2014 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.1,65,58,670/ - IN VIEW OF THE FOLLOWING ADDITIONS / DISALLOWANCES: - (I) DISA LLOWANCE U/S.36(1)(VA) EMPLOYEES CONTRIBUTION TO ESIC/PF RS.62,0 2 ,772/ - (II) PENALTY CHARGES RS. 1,04,198/ - (III) AIR RECONCILIATION RS. 3,10,170/ - 2.2. AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 24/02/2014 FOR A.Y.2011 - 12 FOR F.Y.2011 - 12, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) - 8, MUMBAI, WHICH WAS ALLOWED VIDE THE IMPUGNED ORDER DATED 19/01/2016. 3 .1 . REVENUE, BEING AGGRIEVED BY THE ORDER OF THE CIT(A) - 8, MUMBAI DATED 19/01/2016 FOR A.Y. 2011 - 12, HAS PREFERRED THEIR APPEAL RAIS ING THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE U/S.36(1)(VA) AMOUNTING TO RS.62,02,772/ - . 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, VARY, OMIT OR SUB STITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF APPEAL. 3. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. 2 . WHEN THE CASE WA S CALLED FOR HEARING, NONE WAS PRESENT TO REPRESENT THE CASE ON BEHALF OF THE ASSESSEE, BUT THE LEARNED DR WAS PRESENT TO ARGUE THE CASE FOR REVENUE. WE HAVE PROCEEDED TO DISPOSE OFF THIS APPEAL WITH THE ASSISTANCE OF LEARNED DR FOR REVENUE AND ON THE BASI S OF MATERIAL AVAILABLE ON RECORD. ITA NO. 2844/MUM/2016 M/S. EYEGLOBAL TECHNOLOGIES PVT. LTD., 3 3.3 . THE LEARNED DR FOR REVENUE WAS HEARD IN SUPPORT OF THE GROUNDS RAISED AND PLACED STRONG RELIANCE ON THE DECISION OF THE ASSESSING OFFICER (AO) ON THIS ISSUE. 3.4.1 . WE HAVE HEARD THE LEARNED DR FOR REVENUE AND PERUSE D AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD INCLUDING THE JUDICIAL PRONOUNCEMENTS CITED. THE SOLE ISSUE FOR CONSIDERATION IN THE GROUNDS RAISED IN THIS APPEAL IS WHETHER OR NOT THE ORDER OF THE LEARNED CIT(A), IN DELETING THE DISALLOWANCE OF RS.62,02 ,772/ - MADE BY THE AO U/S.36(1)(VA) OF THE ACT ON ACCOUNT OF PAYMENTS IN RESPECT OF EMPLOYEES CONTRIBUTION TO ESIC AND PF MADE AFTER THE DUE DATES UNDER THOSE ACTS, WERE IN ORDER. THE FACTS OF THE MATTER AS EMANATE FROM THE RECORD ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS THAT AO OBSERVED THAT THE ASSESSEE HAD MADE PAYMENTS OF EMPLOYEES CONTRIBUTION TO ESIC AND PF AFTER THE DUE DATE UNDER THOSE ACTS AND PROCEEDED TO DISALLOW THE ASSESSEES CLAIM U/S.36(1)(VA) OF THE ACT. ON APPEAL, THE LEARNED CIT(A) OBSERVED THAT THE SAID PAYMENTS OF EMPLOYEES CONTRIBUTION TO ESIC AND PF WERE ALLOWABLE U/S.43B OF THE ACT AS THE SAME WERE PAID BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME U/S.139(1) OF THE ACT FOR A.Y.20110 - 12. IN THIS FACTUAL MATRIX AND FOLLOWI NG THE RATIO OF THE DECISIONS OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V HINDUSTAN ORGANIC CHEMICALS LTD., (ITA NO.399 OF 2012) (BOM), THE LEARNED CIT(A) ALLOWED THE ASSESSEES CLAIM AND ACCORDINGLY DELETED THE DISALLOWANCE MADE BY THE AO U/S.36 (1)(VA) OF THE ACT. ITA NO. 2844/MUM/2016 M/S. EYEGLOBAL TECHNOLOGIES PVT. LTD., 4 3.4 . 2 . ON AN APPRECIATION OF THE FACTUAL AND LEGAL MATRIX OF THE CASE AS DISCUSSED ABOVE, WE CON CUR WITH THE VIEW OF THE LEARNED CIT(A) THAT THE PAYMENTS MADE BY THE ASSESSEE OF EMPLOYEES CONTRIBUTION TO ESIC AND PF, TH OUGH BELATEDLY UN DER THE RESPECTIVE ACTS, BUT WITHIN THE DUE DATE FOR FILING THE RETURN OF INCOME, ARE TO BE ALLOWED AS DEDUCTION U/S.43B OF TH E ACT, IS COVERED SQUARELY IN FAVOUR OF THE ASSESSEE BY INTER ALIA THE DECISIONS OF THE HONBLE APEX COURT IN THE CASE OF ALOM EXT RUSIONS LTD., (SUPRA) AND OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN ORGANIC CHEMICALS LTD., (SUPRA). AT PARAS 8,9 OF THE ORDER, THE HONBLE BOMBAY HIGH COURT HAS HELD AS UNDER: - 8. THE SECTION REFERRED TO ABOVE VIZ. SECTION 438 AND THE AMEN DMENTS THERETO CAME UP FOR CONSIDERATION BEFORE THE HON'BLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V / S ALOM EXTRUSIONS LTD., REPORTED IN (2009) 319 ITR 306 (SC) WHEN THE SUPREME COURT INTER ALIA HELD THAT THE AMENDMENTS TO THE SAID SECTION BROUGHT ABOUT BY THE FINANCE ACT, 2003 WITH EFFECT FROM 1ST APRIL 2004 WERE RETROSPECTIVE IN NATURE AND WOULD VRD 7 ITXA399112 OPERATE FROM 1ST APRIL 1988. THE ITAT, RELYING UPON THE AFORESAID JUDGMENT OF THE SUPREME COURT, HAS DISMISSED THE REVENUE'S A PPEAL AND CONFIRMED THE ORDER PASSED BY THE CIT (APPEALS). IN THIS VIEW OF THE MATTER AND IN VIEW OF THE FACT THAT THE SUPREME COURT HAS EXPRESSLY HELD THAT THE AMENDMENTS TO SECTION 438 THAT WERE BROUGHT ABOUT BY THE FINANCE ACT 2003 ARE RETROSPECTIVE IN NATURE, WE FIND THAT THE ITA T WAS FULLY JUSTIFIED IN DELETI NG THE ADDITION OF RS.1,82,77, 138 / - ON ACCOUNT OF DELAYED PAYMENT OF PROVIDENT FUND OF EMPLOYEES' CONTRIBUTION. WE THEREFORE FIND THAT NO SUBSTANTIAL QUESTION OF LAW ARISES ON THIS COUNT AS SOUGHT TO BE CONTENDED BY MR MALHOTRA ON BEHALF OF THE REVENUE. 9. EVEN OTHERWISE, WE FAIL TO UNDERSTAND HOW THIS DEDUCTION COULD HAVE BEEN DISALLOWED TO THE ASSESSEE. ADMITTEDLY, THE ASSESSMENT YEAR IN QUESTION IS 2006 - 07. THE SECOND PROVISO TO SECTION 438 QUO TED ABOVE WAS DELETED WITH EFFECT FROM 1 ST APRIL 2004 AND SIMULTANEOUSLY THE FIRST PROVISO WAS ALSO AMENDED BRINGING ABOUT A UNIFORMITY IN DEDUCTIONS CLAIMED TOWARDS TAX, ITA NO. 2844/MUM/2016 M/S. EYEGLOBAL TECHNOLOGIES PVT. LTD., 5 DUTY CESS AND FEE ON THE ONE HAND AND CONTRIBUTION TO THE EMPLOYEES' PROVIDENT FUND, SUPERANNUATION FUND AND OTHER WELFARE FUNDS ON THE OTHER. THESE DEDUCTIONS BEING CLAIMED IN THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2006 - 07, THE AMENDMENTS TO SECTION 43 B WHICH CAME INTO FORCE WITH EFFECT F ROM 1ST APRIL 2004 WOULD HAVE CLEARLY A PPLIED TO THE ASSESSEE'S CASE. IN THIS VIEW OF THE MATTER ALSO, WE FIND THAT THE ITAT WAS VRD 8 ITXA399 / 12 FULLY JUSTIFIED IN DELETING THE ADDITION OF RS.1,82,77,138/ - ON ACCOUNT OF DELAYED PAYMENT OF PROVIDENT FUND OF EMPLOYEES CONTRIBUTION. RESPECTFUL LY FOLLOWING THE DECISIONS OF THE HONBLE APEX COURT IN THE CASE OF ALOM EXTRUSIONS LTD., (SUPRA) AND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN ORGANIC CHEMICALS LTD., (SUPRA), WE UPHOLD THE ORDER OF THE LEARNED CIT(A) IN DELETING THE DISALLOW ANCE OF RS.62,02,772/ - IN RESPECT OF PAYMENTS OF EMPLOYEES CONTRIBUTION TO ESIC AND PF MADE BY THE AO U/S.36(1)(VA) OF THE ACT. CONSEQUENTLY, FINDING NO MERIT IN THE GROUNDS RAISED BY REVENUE, THE SAME ARE DISMISSED. 4. IN THE RESULT, REVENUES APPEAL FOR A.Y.2011 - 12 IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 04 / 01 /2017 SD/ - (RAM LAL NEGI ) SD/ - ( JASON P BOAZ ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 04 / 01 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//