ACIT, UDAIPUR V. M/s. Udaipur Dugdh Utpadak Sahakari Sangh Ltd., UDAIPUR

ITA 296/JODH/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70264 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-10-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 01-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.296/JODH/2012 (A.Y. 2009-10) ACIT, CIRCLE-1, VS. M/S. UDAIPUR DUGDH UDAIPUR. UTPADAK SAHAKARI SANGH LTD. UDAIPUR. PAN NO. AAAFU 4403 B (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 24/10/2013. DATE OF PRONOUNCEMENT : 25/10/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 15/06/2012 OF LD. CIT (A), UDAIPUR. THE ONLY GROUN D RAISED IN THIS APPEAL READS AS UNDER: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 19 ,01,255/- MADE U/S 36(1)(VA) R.W.S. 2(24)(X) OF THE I.T. ACT. THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELETE O R MODIFY ANY OR ALL THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2 2. DURING THE COURSE OF HEARING, NOBODY WAS PRESENT O N BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT WAS SOUGHT. WE, THEREF ORE, PROCEED TO DECIDE THE APPEAL EXPARTE, QUA THE ASSESSEE, AFTER HEARING THE LEARNED D.R., OF COURSE ON MERIT. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSI NG OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASS ESSEE MADE DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO PF AND EMPLOYE R-EMPLOYEES CONTRIBUTION TO ESI FUND. THE DETAILS OF THE PAYME NTS MADE ON ACCOUNT OF PROVIDENT FUND OF RS. 18,93,266/- AND ESI FUND OF R S. 7,989/- ALONG WITH THE DATE OF PAYMENTS HAD BEEN GIVEN AT PAGE NO.3 OF THE ASSESSMENT ORDER DATED 21/12/2011, FOR THE COST OF REPETITION, THE SAME ARE NOT REPRODUCED HEREIN. THE ASSESSING OFFICER POINTED OUT THAT THE ABOVE PAYMENTS WERE BEYOND PRESCRIBED DUE DATE AS PER EXP LANATION TO 36(1)(VA) OF THE I.T. ACT, 1961 (HEREINAFTER REFERR ED TO AS ACT, IN SHORT) AND THE SIMILAR DELAYED PAYMENTS HAVE BEEN DISALLOW ED IN THE A.Y. 2008- 09. ACCORDINGLY, THE ASSESSING OFFICER DISALLOWED RS. 19,01,255/-. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LEARNED CIT(A) AND THE SUBMISSIONS MADE BY HIM AS INCORPORA TED IN PARA 3.2 OF THE IMPUGNED ORDER ARE REPRODUCED VERBATIM AS UNDER :- 3 THAT ASSESSEE HAVE DEPOSITED ESI LATE BY 2 TO 4 D AYS RS. 7989/- BUT IT WAS DEPOSITED BEFORE FILING OF INCOME TAX RETURN U/S. 1 39(1). SIMILARLY PF RS. 18,93,266/- WAS ALSO DEPOSITED LATE BY 2 TO 3 DAYS BUT THE AFORESAID AMOUNT WAS DEPOSITED BEFORE FILING OF THE INCOME TA X RETURN U/S. 139(1). THAT I AM SUBMITTING DETAILS OF THE PF & ESI MONTHW ISE STATEMENT & I AM ALSO ENCLOSING HEREWITH CHALLAN FOR PAYMENTS OF PF & ESI WHOLE OF THE YEAR. THAT THESE ADDITIONS WERE ALSO MADE IN THE EARLIER ASSESSMENT 2006-07, 2007-08 & 2008-09. ADDITION MADE IN THESE YEARS HA VE ALSO BEEN DELETED BY YOUR HONOUR. THERE ARE MANY CASES AND BY THE VARIOUS JUDGMENTS OF THE COURTS U/S. 139(1). CIT VS. VINAY CEMENT LTD. 213 CTR 268 (SC) CIT VS. P.M. ELECTRONICS LTD. (2009) 177 TAXMAN 1 (DEL) CIT VS. NEXUS COMPUTERS PVT. LTD. (2009) 177 TAXMA N 2002 (MAD) CIT VS. M.N. CHERRY (2009) 310 ITR 445 (KAR). 5. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, DELETED THE ADDITION BY OBSERVING IN PARA 3.3 OF TH E IMPUGNED ORDER, WHICH READS AS UNDER:- 3.3 I HAVE CONSIDERED THE CONTENTIONS OF THE APPEL LANT AS WELL AS ASSESSMENT ORDER. IT IS SEEN THAT AS PER THE CHART SUBMITTED ON PAGE NO.3 OF THE ASSESSMENT ORDER SHOWING THE DATE OF PAYMENT S OF ESI AND PF FUNDS, THERE IS SLIGHT DELAY WHILE DEPOSITING THESE PAYMEN TS. HOWEVER, ALL THE PAYMENTS HAVE BEEN DEPOSITED BY 16/04/2009 I.E. WEL L BEFORE THE DUE DATE OF FILING THE RETURN FOR A.Y. 2009-10. THE APPELLA NT HAS SUBSTANTIATED THE FACT OF PAYMENT BY WAY OF CHALLANS. IN FACT THE A. O. HAS ALSO MENTIONED THAT ASSESSEE HAS MADE THE SAID PAYMENTS, THOUGH IN DELAYED MANNER. SIMILAR ISSUE HAS BEEN DECIDED IN THE A.Y. 2006-07 AS UNDER:- I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED A /R VIS--VIS THE DECISION OF VARIOUS COURTS RELIED UPON BY THE APPEL LANT ALONGWITH THE FINDINGS OF THE A.O. GIVEN IN THE ASSESSMENT ORDER. IN MY VIEW, NOW IT IS A SETTLED POSITION OF LAW THAT WHERE PAYMENTS ON ACCOUNT OF CONTRIBUTION TO THE PF, ESI ETC. ARE MADE WITHIN TH E DUE DATE OF FILING THE RETURN, SUCH DEDUCTIONS ARE ALLOWABLE. IN THE CASE OF APPELLANT, 4 THERE IS NO DISPUTE THAT THE P.F. CONTRIBUTION AND ESI WAS DEPOSITED BY THE APPELLANT BEFORE THE DUE DATE OF FILING THE RET URN. THEREFORE, THE DISALLOWANCE MADE BY THE A.O. DESERVES TO BE DELETE D AND I ORDER ACCORDINGLY. THE APPELLANT WILL GET A RELIEF OF RS . 14,61,385/- ON THIS ACCOUNT SIMILAR BEING THE FACTS DURING THIS YEAR AND ASSES SEES RELIANCE ON THE ABOVE ISSUE IN THIS CONTEXT ESPECIALLY IN THE DECISION IN CASE OF CIT VS. VINAY CEMENT LTD. 213 CTR 268 (SC), THE ADDITION MADE ON THIS ACCOUNT OF RS. 19,01,255/- IS DELETED. THE APPEAL IS ALLOWED ON T HIS GROUND. NOW THE DEPARTMENT IS IN APPEAL. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED D.R., WHO MAINLY RELIED ON ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER AND ALSO GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE ALTHOUGH M ADE THE PAYMENTS OF THE PROVIDENT FUND AND ESI FUND, BUT THE SAID PAYME NTS WERE BEYOND THE PRESCRIBED DUE DATE AS PER EXPLANATION TO SECTION 3 6(1)(VA) OF THE ACT. 7 . ON A SIMILAR ISSUE, THE HON'BLE KARNATAKA HIGH CO URT IN THE CASE OF CIT AND ANOTHER VS. M.N. CHARI (2009) 310 ITR 445 HAS HELD AS UNDER:- THAT THE CONTRIBUTIONS MADE BY THE ASSESSEE WERE ALLOWABLE DEDUCTIONS EVEN THOUGH THEY WERE MADE BEYOND THE ST IPULATED PERIOD UNDER SECTION 36(1)(VA) OF THE INCOME-TAX ACT, 1961 , READ WITH SECTION 2(24)(X) AND SECTION 43B AS THE AMOUNTS WERE PAID B Y THE ASSESSEE ON OR BEFORE THE DUE DATE FOR FURNISHING THE RETURN UN DER SECTION 139(1) OF THE ACT. 8. NOW, THIS ISSUE HAS BEEN SETTLED BY THE HON'BLE SU PREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. (2009) 319 ITR 306 , WHEREIN THEIR LORDSHIP AT PAGES 315 & 316 HAVE HELD AS UNDER:- 5 LASTLY, WE MAY POINT OUT THE HARDSHIP AND THE INV IDIOUS DISCRIMINATION WHICH WOULD BE CAUSED TO THE ASSESSE E(S) IF THE CONTENTION OF THE DEPARTMENT IS TO BE ACCEPTED THAT THE FINANCE ACT, 2003, TO THE ABOVE EXTENT, OPERATED PROSPECTIVELY. TAKE AN EXAMPLE- IN THE PRESENT CASE, THE RESPONDENTS HAVE DEPOSITED THE CONTRIBUTIONS WITH THE R.P.F.C. AFTER MARCH, 31 (END OF THE ACCOU NTING YEAR) BUT BEFORE FILING OF THE RETURNS UNDER THE INCOME-TAX A CT AND THE DATE OF PAYMENT FALLS AFTER THE DUE DATE UNDER THE EMPLOYEE S PROVIDENT FUND ACT, THEY WILL BE DENIED DEDUCTION FOR ALL TIMES. IN VIEW OF THE SECOND PROVISO, WHICH STOOD ON THE STATUTE BOOK AT THE REL EVANT TIME, EACH OF SUCH ASSESSEE(S) WOULD NOT BE ENTITLED TO DEDUCTION UNDER SECTION 43B OF THE ACT FOR ALL TIMES. THEY WOULD LOSE THE BENEF IT OF DEDUCTION EVEN IN THE YEAR OF ACCOUNT IN WHICH THEY PAY THE CONTRI BUTIONS TO THE WELFARE FUNDS, WHEREAS A DEFAULTER, WHO FAILS TO PA Y THE CONTRIBUTION TO THE WELFARE FUND RIGHT UP TO APRIL, 2004, AND WH O PAYS THE CONTRIBUTION AFTER APRIL 1, 2004, WOULD GET THE BEN EFIT OF DEDUCTION UNDER SECTION 43B OF THE ACT. IN OUR VIEW, THEREFO RE, THE FINANCE ACT, 2003, TO THE EXTENT INDICATED ABOVE, SHOULD BE READ AS RETROSPECTIVE. IT WOULD, THEREFORE, OPERATE FROM APRIL 1, 1988, WH EN THE FIRST PROVISO WAS INTRODUCED. IT IS TRUE THAT PARLIAMENT HAS EXP LICITLY STATED THAT THE FINANCE ACT, 2003, WILL OPERATE WITH EFFECT FRO M APRIL 1, 2004. HOWEVER, THE MATTER BEFORE US INVOLVES THE PRINCIPL E OF CONSTRUCTION TO BE PLACED ON THE PROVISIONS OF THE FINANCE ACT, 2003. 9. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY MERIT IN TH IS APPEAL OF THE DEPARTMENT. 10. IN THE RESULT, APPEAL IS DISMISSED. (ORDER PRONOUNCED IN THE COURT ON 25 TH OCTOBER, 2013). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH OCTOBER , 2013. VR/- 6 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.