Gujarat Terce Laboratories Ltd., Ahmedabad V. Income Tax Officer,Ward-2(1)(1), Ahmedabad

ITA 3112/AHD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0745 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 04-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P S CHAUDHARY
• Assessee Lawyers: ASHWIN C SHAH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 3112/AHD/2015 / ASSESSMENT YEAR : 2005-06 GUJARAT TERCE LABORATORIES LTD. 301, AKASHRATH COMPLEX, NR. LAW GARDEN, NAVRANGPURA, AHMEDABAD-380009 PAN : AAACG 5528 L VS ITO, WARD-2(1)(1), AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI ASHWIN C. SHAH, AR REVENUE BY : SHRI P.S. CHAUDHARY, SR DR / DATE OF HEARING : 29/08/2016 / DATE OF PRONOUNCEMENT: 30/08/2016 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, AHMEDABAD D ATED 21.10.2015 FOR AY 2005-06. 2. THE SOLE GROUND RAISED IS AS UNDER:- THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDIT ION OF PF & ESIC TO THE EXTENT OF RS.7,51,251 [EXCLUDING ESI CONTRIBUTION F OR THE MONTH OF APRIL, AUGUST AND SEPTEMBER AMOUNTING TO RS.20,853] ON THE G ROUND THAT THE SAME IS NOT PAID WITHIN THE PRESCRIBED TIME LIMIT I NASMUCH AS THE PF & ESIC IS PAID BEFORE THE END OF FINANCIAL YEAR AND IN CAS E OF MONTH OF MARCH, IT IS PAID WITHIN DUE DATE AS PER WORKING GIVEN IN THE CI T(A) ORDER. THEREFORE THE QUESTION OF ANY ADDITION DOES NOT ARISE. 3. THE LD. DR, AT THE OUTSET, CONTENDS THAT THE ISS UE RAISED IN ASSESSEES APPEAL IS COVERED BY HONBLE GUJARAT HIGH COURT JUD GMENT IN THE CASE OF GSRTC VS. CIT, REPORTED IN 366 ITR 170, WHEREIN IT WAS HELD THAT THE DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION OF PF BEY OND GRACE PERIOD CANNOT BE ALLOWED AS EXPENDITURE TO THE ASSESSEE. THIS JUDGMENT OF THE HONBLE GUJARAT HIGH COURT HAS BEEN FOLLOWED IN VAR IOUS OTHER JUDGMENTS OF HONBLE GUJARAT HIGH COURT AND ITAT. SMC-ITA NO. 3112/AHD/2015 GUJARAT TERCE LABORATORIES LTD VS. ITO AY : 2005-06 2 4. LD. COUNSEL FOR THE ASSESSEE, SHRI ASHWIN C. SHA H, VEHEMENTLY CONTENDS THAT THE HONBLE GUJARAT HIGH COURT HAS NO T CONSIDERED THE FOLLOWING TWO JUDGMENTS, WHICH ARE DIRECTLY ON THE POINTS:- I) CIT VS. SITALDAS TIRATHDAS, 41 ITR 367 (SC) II) CIT VS. C.K. THAKORE, 136 ITR 464 (BOM) 4.1 IT IS FURTHER CONTENDED THAT THE EMPLOYER HAS T WO OBLIGATIONS (I) HE HAS CONTRACTUAL OBLIGATION WITH EMPLOYEE TO THE EFF ECT THAT THE EMPLOYER SHALL DEPOSIT THE MONEY SO RECEIVED WITH THE PF/ESI AUTHORITIES AND THAT SUCH OBLIGATION IS CONTRACTUAL OBLIGATION AND (II) THE EMPLOYER IS UNDER STATUTORY OBLIGATION UNDER PF ESI ACT TO DEPOSIT EM PLOYEES CONTRIBUTION WITH THE SAID AUTHORITIES, FAILING WHICH THE EMPLOY ER IS LIABLE TO BE PROSECUTED. 4.2 IN RESPECT OF PF, THE ASSESSEE ACTS AS TRUSTEE TO DEPOSIT THE PORTION OF EPF CONTRIBUTED BY EMPLOYEE IN THE BANK ACCOUNT. T HUS, ASSESSEE ACTS IN THE FIDUCIARY CAPACITY. ANY VIOLATION OF FIDUCIARY OBLIGATIONS IS PENALIZABLE UNDER PF ACT. IMPLIEDLY, IT AMOUNTS TO DEEMED INCO ME WHICH ACCORDING TO THE HONBLE SUPREME COURT IN THE CASE OF SITALDAS T IRATHDAS (SUPRA) AND THE HONBLE BOMBAY HIGH COURT IN THE CASE OF C.K. THAKO RE (SUPRA) CANNOT BE HELD AS INCOME OF THE ASSESSEE. PLETHORA OF OTHER HIGH COURT JUDGMENTS HAVE ELABORATELY INTERPRETED SECTION 36(1)(VA) HOLD ING THAT DUE DATE WILL MEAN THE LAST DAY OF FILING OF THE RETURN BY THE AS SESSEE. IN THE ASSESSEES CASE, THE PAYMENTS HAVE BEEN MADE BEFORE THE DUE DA TE BUT AFTER THE GRACE PERIOD. IT IS CONTENDED THAT THE ASSESSEES CLAIM MAY BE ALLOWED. 5. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES B ELOW, THE JUDGMENTS OF HONBLE SUPREME COURT IN THE CASE OF SITALDAS TIRAT HDAS (SUPRA) AND HONBLE BOMBAY HIGH COURT IN THE CASE OF C.K. THAKO RE (SUPRA). SMC-ITA NO. 3112/AHD/2015 GUJARAT TERCE LABORATORIES LTD VS. ITO AY : 2005-06 3 6. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. IT IS NOT DISPUTED THAT THE HONBLE GUJARAT HIGH COURT JUDGME NT IN THE CASE OF GSRTC (SUPRA) CLINCHES THE ISSUE IN FAVOUR OF THE R EVENUE. THE SAME IS BINDING ON ITAT. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, ASSESSEES APPEAL IS DISMISSED. 7. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 30 TH AUGUST, 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 30/08/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD