FIRST FLIGHT COURIERS LTD., MUMBAI V. DCIT 12(2)(1), MUMBAI

ITA 2975/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2499 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Assessee Lawyers: NIKITA ASIJA
• Keywords: TDS
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 2975 / MUM . /2018 ( ASSESSMENT YEAR : 20 14 15 ) FIRST FLIGHT COURIERS LTD. G 1001/02, LOTUS CORPORATE PARK GRAHAM FIRTH STEEL COMPOUND GOREGAON (E), MUMBAI 400 063 PAN AAACF0841R . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 12(2)(1), MUMBAI . RESPONDENT ASSESSEE BY : MS. NIKITA ASIJA REVENUE BY : SHRI AJAY PRATAP SINGH DATE OF HEARING 27 . 02 .201 9 DATE OF ORDER 08.03.2019 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 19 TH DECEMBER 2017 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 20 , MUMBAI , FOR THE ASSESSMENT YEAR 20 14 15 . 2 . IN GROUND NO.1, THE ASSESSEE HAS CHALLENGED DISALLOWANCE OF DEDUCTION CLAIMED TOWARDS EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AMOUNTING TO ` 17,61,234, AND ESIC AMOUNTING TO ` 6,48,225. 2 FIRST FLIGHT COURIERS LTD. 3 . BRIEF FACTS ARE, THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF COURIER SERVICES. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 29 TH NOVEMBER 2014, DECLARING LOSS OF ` 16,70,04,388. IN COURSE OF THE ASSESSMENT PROCEEDINGS, WHILE EXAMINING ASSESSEES CLAIM OF DEDUCTION TOWARDS PAYMENT OF EMPLOYEES CONTRIBUTION PROVIDENT FUND AND ESIC , THE ASSESSING OFFICER NOTICED THAT EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AMOUNTING TO ` 17,61,234, WAS PAID BEYOND THE DUE DATE PROVIDED UNDER THE PROVIDENT FUND ACT. SIMILARLY, HE NOTICED THAT EMPLOYEES CONTRIBUTION TO ESIC AMOUNTING TO ` 6,48,228, WAS ALSO PAID BEYOND THE DUE DATE FOR PAYMENT PRESCRIBED UNDER ESIC ACT. THEREFORE, HE CALLED UPON THE ASSESSEE TO SHOW CAUSE WHY THE DEDUCTION CLAIMED ON ACCOUNT OF THE AFORESAID PAYMENT S SHOULD NOT BE DISALLOWED UNDER SECTION 43B R/W SECTION 36(1)(VA) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) AND SECTION 2(24)(X) OF THE ACT. THOUGH , THE ASSESSEE OBJECTED TO THE PROPOSED DISALLOWANCE STATING THAT EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AND ESIC WERE PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR AS PRESCRIBED UNDER SECTION 139(1) OF THE ACT, HENCE, IS ALLOWABLE H OWEVER, THE ASSESSING OFFICER DID NOT FIND THE SUBMISSIONS OF THE ASSESSEE ACCEPTABLE. ACCORDINGLY, HE DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE. 3 FIRST FLIGHT COURIERS LTD. 4 . THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID DISALLOWANCES BY FILING APPEA L BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, THE LEARNED COMMISSIONER (APPEALS) SUSTAINED THE DISALLOWANCES. 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , SINCE THE ASSESSEE HAS PAID THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESIC WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME PRESCRIBED UNDER SECTION 139(1) OF THE ACT, DEDUCTION CLAIMED FOR SUCH PAYMENT IS ALLOWABLE. SHE SUBMITTED , WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010 11 IN ITA NO.3138/ MUM./2014, DATED 14 TH JANUARY 2016, THE TRIBUNAL FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT IN CIT V/S ALOM EXCLUSIONS LTD., [2009] 319 ITR 306 (SC) AND THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S HINDUSTAN ORGANICS CHEMICALS LTD., [201 4] 366 ITR 001 (BOM.) HAS ALLOWED ASSESSEES CLAIM HOLDING THAT EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESIC , IF PAID WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME AS PRESCRIBED UNDER SECTION 139(1) OF THE ACT , IS ALLOWABLE AS DEDUCTION UNDER SEC TION 43B OF THE ACT. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001 02 TO 2002 03, 2003 04 AND 2004 04, THE HON'BLE JURISDICTIONAL HIGH COURT WHILE DECIDING THE APPEALS FILED BY THE ASSESSEE HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THUS, 4 FIRST FLIGHT COURIERS LTD. SHE SUBMITTED , THE ISSUE IS COVERED BY THE DECISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT AND THE TRIBUNAL IN ITS OWN CASE. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS). 7 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PER USED MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSING OFFICER HAS DISALLOWED ASSESSEES CLAIM OF DEDUCTION ON ACCOUNT OF PAYMENT MADE TO EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESIC ON THE GROUND THAT SUCH PAYMENTS WERE MADE BEYOND THE DATE PRESCRIBED UNDER THE PROVIDENT FUND AND ESIC ACT. HOWEVER, IT IS THE CONTENTION OF THE ASSESSEE THAT SINCE THE PAYMENT TOWARDS EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESIC WERE MADE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR AS PRESCRIBED UNDER SECTION 139(1) OF THE ACT, ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION. IT IS OBSERVED , THE HON'BLE JURISDICTIONAL HIGH COURT WHILE DECIDING ASSESSEES APPEALS IN ITA NO.807 OF 2008 AND ORS., FOR THE ASSESSMENT YEAR 2001 02, 2002 03, 2 003 04 AND 2004 50, VIDE ORDER DATED 2 ND AUGUST 2018, HAS FOLLOWED ITS OWN DECISION IN CIT V/S GHATGE PATIL TRANSPORT LTD., [2014] 368 ITR 749 (BOM.) AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT IF EMPLOYEES CONTRIBUTION TO PROVIDENT FU ND AND ESIC ARE DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN OF 5 FIRST FLIGHT COURIERS LTD. INCOME UNDER SECTION 139(1) OF THE ACT, THEY ARE ALLOWABLE AS DEDUCTION. THE TRIBUNAL, WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010 11 IN ITA NO.3138/MUM ./2014, DATED 14 TH JANUARY 2016, FOLLOWED THE DECISION OF THE HON'BLE SUPREME COURT IN ALOM EXCLUSIONS LTD. (SUPRA) AND THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN HINDUSTAN ORGANICS CHEMICALS LTD. (SUPRA) AND HELD THAT IF EMPLOYEES CONTRIBUT ION TO PROVIDENT FUND AND ESIC ARE PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT, THEY ARE ALLOWABLE AS DEDUCTION. THEREFORE, FOLLOWING THE RATIO LAID DOWN IN THE AFORESAID DECISIONS, I DIRECT THE ASSESSING OFFICER TO ALLOW ASSESSEES CLAIM OF DEDUCTION IN RESPECT OF PAYMENT MADE TOWARDS EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESIC , IF THEY WERE PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR AS PRESCRIBED UNDER SECTION 1 39(1) OF THE ACT. GROUND IS ALLOWED. 8 . I N GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN ALLOWING ASSESSEES CLAIM OF TDS AMOUNTING ` 2,40,000. 9 . BRIEF FACTS ARE, IN THE COURSE OF HEARING BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE RAISED THE ISSUE OF SHORT CREDIT OF TDS BY THE ASSESSING OFFICER. ON VERIFYING THE FACTS ON RECORD, LEARNED 6 FIRST FLIGHT COURIERS LTD. COMMISSIONER (APPEALS) NOTICED, THOUGH IN THE RETURN OF INCOME THE ASSES SEE HAS CLAIMED TDS OF ` 8,33,25,388, HOWEVER, THE ASSESSING OFFICER HAD ALLOWED TDS OF ` 8,31,93,152. THEREFORE, HE DIRECTED THE ASSESSING OFFICER TO EXAMINE ASSESSEES CLAIM AND ALLOW DUE CREDIT FOR THE TDS. FURTHER, THE LEARNED COMMISSIONER (APPEALS) OBSERVED THAT THOUGH IN THE RETURN OF INCOME THE ASSESSEE HAD CLAIMED TDS OF ` 8,33,25,388, HOWEVER, IN THE COURSE OF PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY , THE ASSESSEE HAD CLAIMED TDS CREDIT FOR ` 8,35,65,388. THE LEARNED COMMISSIONER (APPEALS) OBSERVED , SINCE THE ASSESSEE DID NOT MAKE ANY CLAIM OF THE ADDITIONAL TDS OF ` 2,40,000, IN THE RETURN OF INCOME , SUCH CLAIM CANNOT BE ALLOWED. 10 . THE LEARNED AUTHORISED REPRESENTA TIVE SUBMITTED , SINCE THE TDS OF ` 2,40,000 IS DEDUCTED FOR THE IMPUGNED ASSESSMENT YEAR, ASSESSEES CLAIM SHOULD BE ALLOWED. 11 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS). 12 . I HAVE CONSIDERED RI VAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. UNDISPUTEDLY, THOUGH IN THE RETURN OF INCOME THE ASSESSEE HAD CLAIMED TDS OF ` 8,33,25,388, HOWEVER, IN COURSE OF PROCEEDINGS BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE CLAIMED TDS CREDIT FOR AN AMOUNT OF ` 8,35,65,388. THE LEARNED COMMISSIONER 7 FIRST FLIGHT COURIERS LTD. (APPEALS) REJECTED ASSESSEES CLAIM FOR ADDITIONAL TDS AMOUNTING TO ` 2,40,000, SIMPLY ON THE REASONING THAT IT WAS NOT CLAIMED IN THE RETURN OF INCOME. ON A QUERY MADE BY THE BENCH LEARNED AUTHORISED REPRE SENTATIVE SUBMITTED THAT INCOME CORRESPONDING TO THE ADDITIONAL TDS OF ` 2,40,000, HAS BEEN OFFERED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. IN MY VIEW, IF THE ASSESSEE HAS OFFERED THE INCOME CORRESPONDING TO THE ADDITIONAL TDS OF ` 2,40,000, AND T HE AFORESAID TDS AMOUNT HAS BEEN DEDUCTED AND PAID TO THE GOVERNMENT ACCOUNT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEES CLAIM SHOULD BE ALLOWED. THEREFORE, I DIRECT THE ASSESSING OFFICER TO FACTUALLY VERIFY ASSESSEES CL AIM AND ALLOW CREDIT FOR ADDITIONAL TDS IN ACCORDANCE WITH THE STATUTORY PROVISION. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 13 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 08.03.2019 SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 08.03.2019 8 FIRST FLIGHT COURIERS LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI