ACIT, CHENNAI V. Spell Semiconductor Ltd., CHENNAI

ITA 3263/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7578 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 29-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R CLEMENT RAMESH KUMAR
• Keywords: Question of law; Set aside
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.3263/CHNY/2018 ! ' / ASSESSMENT YEAR : 2013-2014. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6 (OSD) CHENNAI 600 034. VS. M/S. SPEL SEMICONDUCTOR LTD, 5, CMDA INDUSTRIAL ESTATE, MARAIMALAI NAGAR, KANCHEEPURAM, TAMIL NADU 603 209. [PAN AAACS 8519B] ( / APPELLANT) ( /RESPONDENT) # $ % / APPELLANT BY : SHRI. R. VIJAYARAGHAVAN, ADV &' # $ % /RESPONDENT BY : SHRI. R. CLEMENT RAMESH KUMAR, ADDL. CIT. ( ) $ * /DATE OF HEARING : 22-07-2019 +,'! $ * /DATE OF PRONOUNCEMENT : 23-07-2019 / O R D E R PER INTURI RAMA RAO , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-16, CHENNAI ITA NO.3263/2018 :- 2 -: (CIT(A) FOR SHORT) DATED 25.09.2018 FOR THE ASSE SSMENT YEAR (AY) 2013-2014. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LD. CIT(A) IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A) ERRED IN ALLOWING THE DISALLOWAN CE U/S.36(1) (VA) R.W.S. 2(24)(X) OF C72,77,266/- BY R ELYING ON THE DECISION OF HONBLE MADRAS HIGH COURT IN TH E CASE & INTELLIGENCE INDIA PRIVATE LIMITED IN THE MDS. 58 5 AND 586 OF 2015 & M M.P.NO.1 OF 2015 DATED 24-07-20 15. 2.1. THE DECISION OF THE CIT(A) BASED ON THE DECISI ON OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PRIVATE LI MITED IS MISPLACED IN VIEW OF THE SUBSEQUENT PRONOUNCEMENT O F THE HONBLE MADRAS HIGH COURT IN THE CASE OF UNIFAC MANAGEMENT SERVICES (INDIA) VS. DCIT IN W.P. NO. 52 64 OF 2018 AND 6461 OF 2018. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OF FICER BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE RESPONDENT-ASSESSEE NAMELY M/S. SPEL SEMICONDUCTOR LTD ., IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANY ACT, 1956. IT IS ENGAGED IN THE BUSIN ESS OF MANUFACTURING INTEGRATED CIRCUITS. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 WAS FILED ON 16.08.2013 DEC LARING LOSS OF ITA NO.3263/2018 :- 3 -: C6,59,44,129/-. AGAINST THE SAID RETURN OF INCOM E, THE ASSESSMENT WAS COMPLETED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE- 6(2), CHENNAI, (HEREINAFTER REFERRED AS AO') VIDE ORDER DATED 31.03.2016 PASSED U/S.143(3) OF THE INCOME TAX AC T, 1961 (IN SHORT THE ACT) AT TOTAL LOSS OF RS.5,86,66,863/-. WHILE DOING SO, THE LD. ASSESSING OFFICER MADE AN ADDITION OF RS.72,77,266/ - U/S.36(1)(VA) R.W.S. 2(24)(X) OF THE ACT ON ACCOUNT OF BELATED RE MITTANCE OF EMPLOYEES CONTRIBUTION TOWARDS EMPLOYEES PROVIDENT FUND (PF) AND EMPLOYEES STATE INSURANCE (ESI) WHICH ARE NOT MADE WITHIN THE STIPULATED PERIOD UNDER THE PROVISIONS OF RESPECTIV E STATUTE. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT( A), WHO VIDE IMPUGNED ORDER DELETED THE ADDITION. BEING AGGRIEVE D WITH THE ORDER OF THE LD.CIT(A), THE REVENUE IS BEFORE US IN THE P RESENT APPEAL. 4. LD. COUNSEL FOR THE REVENUE PLACED RELIANCE IN THE DECISION OF UNIFIC MANAGEMENT SERVICES (INDIA) LTD. VS.DCIT (SU PRA) AND SUBMITTED THAT REVENUE HAD NOT ACCEPTED THE JUD GMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT LTD. (TCS NO.585 & 586 OF 2 015, DATED 24.07.2015). ACCORDING TO HIM, CONTRIBUTION BY THE EMPLOYEES, TOWARDS WELFARE FUNDS, REMITTED AFTER DUE DATE PRE SCRIBED IN THE RESPECTIVE ENACTMENTS HAD TO BE DISALLOWED U/S.36(I ) (VA) OF THE ACT. ITA NO.3263/2018 :- 4 -: 5. ON THE OTHER HAND, LD. AUTHORISED REPRESENTATIVE STRONGLY SUPPORTED THE ORDER OF THE LD. COMMISSIONE R OF INCOME TAX (APPEALS). FURTHER, THE LD.AR SUBMITTED THAT THE LD . COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION BY FOLLO WING THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. INDUSTRIAL SECURITY &INTELLIGENCE INDIA PVT. LTD IN TC NOS.585 & 586 OF 2015, DATED 24.07.2015, HAD HELD THAT WHEN EPF/ESI CONTRIBUTION ARE MADE WITHIN DUE DATE OF FILING THE RETURN, THE SAME SHOULD BE ALLOWED AS DEDUCTION. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE SOLE ISSUE IN THE PRESENT APPEAL IS WHETHER THE EMPLOYEES CONTRIBUTION TO EPF/ESI CRE DITED BY THE APPELLANT TO THE EMPLOYEES ACCOUNT IN THE RELEVANT PF ACCOUNT ON OR BEFORE DUE DATE PRESCRIBED UNDER EXPLANTION-1 TO SE CTION 36(1)(VA) OF THE ACT IS ENTITLED TO DEDUCTION OR NOT. IN THE PR ESENT CASE, ADMITTEDLY THE CONTRIBUTION RECEIVED FROM EMPLOYEES FOR PF A ND ESI ARE NOT CREDITED BY THE RESPONDENT TO THE EMPLOYEES ACCOUN T WITHIN DUE DATE STIPULATED UNDER THE RELEVANT STATUTE, BUT BEFORE T HE DUE DATE OF FILING OF RETURN. WE FIND THAT THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF UNIFIC MANAGEMENT SERVICES (INDIA) LTD. VS. DCIT (SUPRA) IS BY A SINGLE JUDGE, HOWEVER A CONTRARY VI EW WAS TAKEN BY THE ITA NO.3263/2018 :- 5 -: DIVISION BENCH OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT LTD. (SUPRA) WHEREIN THE DIVISION BENCH HELD AS FOLLOWS:- 5. WE FIND THAT THE TRIBUNAL HAS RIGHTY RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS . ALOM EXTRUSIONS LTD, REPORTED IN 319 ITR 306, WHEREBY TH E SUPREME COURT HELD THAT OMISSION OF SECOND PROVISO TO SECTION 43B AND AMENDMENT TO FIRST PROVISO BY FINAN CE ACT, 2003 ARE CURATIVE IN NATURE AND ARE EFFECTIVE RETRO SPECTIVELY. I.E. WITH EFFECT FROM 01.01.1988 I.E THE DATE OF IN SERTION OF FIRST PROVISO. THE DELHI HIGH COURT IN THE CASE OF CIT VS. AMIL LTD, REPORTED IN 321 ITR 508 HELD THAT IF THE ASSESSEE HAD DEPOSITED EMPLOYEES CONTRIBUTION TOWARDS PROVI DENT FUND AND ESI AFTER DUE DATE AS PRESCRIBED UNDER THE RELEVANT ACT, BUT BEFORE THE DUE DATE OF FILING OF RETURN UNDER THE INCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VIEPW OF THE PROVISIONS OF SECTION 43B AS AMENDE D BY FINANCE ACT, 2003. 6.IN THE PRESENT CASE, THE ASSESSEE HAD REMITTED TH E EMPLOYEES CONTRIBUTION BEYOND THE DUE DATE FOR PAYMENT, BUT W ITHIN THE DUE DATE FOR FILING THE RETURN OF INCOME. HENCE, FO LLOWING THE ABOVE SAID DECISIONS, WE FIND NO REASON TO DIFFER W ITH THE FINDINGS OF THE TRIBUNAL. ACCORDINGLY, WE FIND NO Q UESTION OF LAW MUCH LESS ANY SUBSTANTIAL QUESTION OF LAW ARISES FO R CONSIDERATION IN THESE APPEALS. FURTHER WE NOTE THAT THE DECISION OF THE SINGLE JUD GE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF UNIFIC MAN AGEMENT SERVICES (INDIA) LTD. (SUPRA) IS ALSO REVERSED SUBSEQUENTLY BY THE DIVISIONAL BENCH IN THE CASE OF UNIFIC MANAGEMENT SERVICES (I NDIA) LTD. THEREFORE, WE ARE BOUND TO FOLLOW THE DECISION OF T HE DIVISION BENCH IN THE CASE OF M/S. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD ITA NO.3263/2018 :- 6 -: (SUPRA) . ACCORDINGLY, WE APPROVE THE REASONING GIVEN BY T HE LD.CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 23RD DAY OF JULY, 2019, AT CH ENNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER -) / CHENNAI . / DATED:23RD JULY, 2019. KV /0 $0& *12032'* / COPY TO: 0 1 . # / APPELLANT 3. 0 ( 4*056 / CIT(A) 5. 278 0& * 9 / DR 2. &' # / RESPONDENT 4. 0 ( 4* / CIT 6. 8:0;) / GF