DCIT 9(1)(2), MUMBAI V. AVION SYSTEMS P.LTD, MUMBAI

ITA 3282/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8015 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 10-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTALDR
• Section: 43B; 143(3); 260A; 37(1); 147; 148; 28; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.3282/MUM/2016 ASSESSMENT YEAR: 2012-13 DCIT-9(1)(2), R. NO.260A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 / VS. M/S AVION SYSTEMS PVT. LTD. 302/A, SAGAR TECH PLAZA, ANDHERI KURLA ROAD, SAKI NAKA JUNCTION, ANDHERI (E), MUMBAI-400072 ( / REVENUE) ( ! /ASSESSEE) PAN. NO. AAECA3188Q / REVENUE BY SHRI RAJAT MITTAL-DR ! / ASSESSEE BY MS. DINKLE HARIA ' # $ ! % / DATE OF HEARING : 20/12/2017 $ ! % / DATE OF ORDER: 20/12/2017 M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 05/02/2016 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, DELETING THE ADDITION OF RS.50,36,946/- ON ACCOUNT OF LATE PAYMENT OF PF & ESIC IGNORING THE FACT THAT THE PRO VISION OF SECTION 43B OF THE INCOME TAX ACT, 1961 (HEREINA FTER THE ACT) IS NOT APPLICABLE TO EMPLOYEES CONTRIBUTION. 2. DURING HEARING, THE LD. DR, SHRI RAJAT MITTAL, DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER BY ADVANCING ARGUMENTS WHICH IS IDENTICAL TO THE GROUN D RAISED. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE, MS. DINKLE HARIYA, CONTENDED THAT THE ISS UE IS COVERED BY VARIOUS DECISIONS INCLUDING FROM HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS HINDUSTAN ORGANIC CHEMICALS LTD. (2014) 366 ITR 1 (BOM.), CIT VS GHATGE PATIL TRANSPORT LTD. (2014) 368 ITR 749 (BOM .) AND ANOTHER IN CIT VS RAJASTHAN STATE GANGANAGAR SUGAR MILLS LTD. (2017) 393 ITR 0421 (RAJ.) AND THE SLP WAS DIS MISSED M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 3 BY HON'BLE APEX COURT IN (2017) 84 TAXMAN.COM 185(S C). THIS CLAIM OF THE ASSESSEE WAS NOT CONTROVERTED BY LD. DR. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE ORDER FROM HON'BLE BOMBAY HIGH COURT IN TH E CASE OF CIT VS GHATGE PATIL TRANSPORT LTD. (SUPRA) FOR READY REFERENCE AND ANALYSIS:- THIS ORDER DISPOSES OF THE ABOVE TWO APPEALS UNDER SECTION 260A OF THE INCOME-TAX ACT, 1961 ('THE I. T. ACT'), WHICH INVOLVE COMMON QUESTIONS OF LAW, WHICH READ AS UNDE R : '(1) WHETHER THE DECISION OF THE INCOME-TAX APPELLA TE TRIBUNAL IGNORING THE PROVISIONS OF SECTION 2(24)(X) READ WI TH SECTION 36(1)(VA) AS PER WHICH THE EMPLOYEES' CONTRIBUTION TO THE ESI, PF AND PENSION FUND IS DEDUCTIBLE ONLY IF PAYMENT I S MADE BEFORE THE DUE DATE AS PRE SCRIBED IN THE RESPECTIV E ACTS, RULES ORDER OR NOTIFICATION GOVERNING SUCH FUNDS IS ERRON EOUS AND CONTRARY TO THE PROVISIONS OF THE INCOME- TAX ACT, 1961 ? (2) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS RIGHT IN IGNORING THE CLEAR DISTINCTION BETWEEN THE EMPLOYEES' CONTRIBUTION TO THE ESI, PF AND PENSION FUND AND THE EMPLOYER'S CONTRIBUTION AN D THE FACT THAT THE DECISION OF THE HON'BLE SUPREME COURT IN T HE CASE OF CIT V. ALOM EXTRUSIONS LTD. [2009] 319 ITR 306 (SC) IS APPLICABLE ONLY TO THE EMPLOYER'S CONTRI BUTION ? (3) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE PAYMENT OF THE EMPLOYEES' CONTRIBUTION TO THE PF/ESI/PENSIO N FUND IS SUBJECT TO THE PROVISIONS OF SECTION 43B OF THE ACT ? (4) WHETHER THE INCOME-TAX APPELLATE TRIBUNAL FAILE D TO APPRECIATE THE FACT THAT THE AMENDMENT TO SECTION 4 3B IS APPLICABLE ONLY TO THE EMPLOYER'S CONTRIBUTION AND NOT TO THE M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 4 EMPLOYEES' CONTRIBUTION AND, HENCE, WHETHER THE SEC OND PROVISO TO SECTION 43B OMITTED WITH EFFECT FROM APR IL 1, 2004, IS RETROSPECTIVE OR NOT, IS NOT GERMANE TO THE ISSUE O F THE EMPLOYEES' CONTRIBUTION ?' 2. AT THE OUTSET, MR. VIMAL GUPTA, LEARNED SENIOR C OUNSEL APPEARING ON BEHALF OF THE APPELLANT, SUBMITTED THA T THE APPELLANT IS NOT PRESSING QUESTION NO. 1. IT IS, TH EREFORE, NOT NECESSARY TO ANSWER THE SAME. 3. THE APPEALS AS FILED PERTAIN TO THE ORDERS PASSE D BY THE INCOME-TAX APPELLATE TRIBUNAL, PUNE 'A' BENCH ON JU LY 29, 2011, IN INCOME TAX APPEAL NO. 340/PN/10 IN RESPECT OF THE ASSESSMENT YEAR 2003-04 AND INCOME TAX APPEAL NO. 341/PN/10 IN RESPECT OF THE ASSESSMENT YEAR 2004-05 . 4. THE FACTS BEING SIMILAR, WE WILL REFER TO THE FA CTS PERTAINING TO INCOME TAX APPEAL NO. 1002 OF 2012 IN RESPECT OF THE ASSESSMENT YEAR 2003-04. THE ASSESSEE HAD FILED A RETURN OF INCOME DECLARING A TOTAL LOSS OF RS. 1,88,71,600 ON NOVEMBER 27, 2003. A NOTICE C AME TO BE ISSUED UNDER SECTION 148 OF THE INCOME-TAX ACT, 196 1 ('THE I. T. ACT') ON AUGUST 30, 2004, AND WHILE COMPLETING T HE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 1 47 OF THE INCOME-TAX ACT, ADDITIONS WERE MADE ON ACCOUNT OF T HE PAYMENT OF THE EMPLOYEES' CONTRIBUTION TOWARDS PROV IDENT FUND, ESI AND PENSION FUND IN A SUM OF RS. 32,03,94 7. 5. WHILE DISALLOWING THE CLAIM FOR DEDUCTION, THE D EPARTMENT CONTENDED THAT THE PAYMENT OF THE EMPLOYEES' CONTRI BUTION HAD TO BE MADE WITHIN THE DUE DATE, VIZ., ON OR BEFORE THE 15TH OF EVERY SUCCEEDING MONTH. ADMITTEDLY, THESE PAYMENTS WERE NOT SO MADE BUT WERE PAID AFTER THE DUE DATES. THE ASSE SSING OFFICER, THEREFORE, DISALLOWED THE DEDUCTION MADE T O THE EXTENT OF RS. 32,03,547. 6. THE COMMISSIONER OF INCOME-TAX (APPEALS) DISMISS ED THE ISSUE OF DISALLOWANCE ON ACCOUNT OF THE PAYMENT OF THE EMPLOYEES' CONTRIBUTION WHICH WAS COVERED UNDER SEC TION 36(1)(VA) OF THE INCOME-TAX ACT RELYING ON THE DECI SION OF THIS COURT REPORTED IN CIT V. GODAVERI (MANNAR) SAHAKARI SAKHAR KARKHANA LTD. [2008] 298 ITR 149 (BOM) AND HELD THAT THE AMENDMENTS TO SECTION 43B, ON THE BASIS OF WHICH RE LIEF COULD HAVE BEEN GIVEN TO THE ASSESSEE, WERE NOT RETROSPEC TIVE. THE TRIBUNAL HELD THAT THE DISALLOWANCE OF THE EMPLOYEE S' CONTRIBUTION MADE ON ACCOUNT OF PROVIDENT FUND, ESI AND PENSION FUND FOR ASSESSMENT YEAR 2003-04 WAS ON ACC OUNT OF DELAY IN PAYMENT OF THE EMPLOYEES CONTRIBUTION WAS NOT SUSTAINABLE. M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 5 7. THE QUESTION ARISING, THEREFORE, IS (A) WHETHER THE TRIBUNAL WAS RIGHT IN IGNORING THE DISTINCTION BETWEEN THE E MPLOYEES' CONTRIBUTION AND EMPLOYER'S CONTRIBUTION AND WHETHE R THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT V. ALOM EXTRUSIONS LTD. REPORTED IN [2009] 319 ITR 306 (SC) WOULD APPLY ONLY IN THE CASES OF THE EMPLOYEES' CON TRIBUTION ; AND (B) WHETHER THE TRIBUNAL WAS RIGHT IN HOLDING T HAT THE PAYMENT OF THE EMPLOYEES' CONTRIBUTION IS SUBJECT T O THE PROVISIONS OF SECTION 43B OF THE INCOME-TAX ACT ENT AILING THAT THE AMENDMENT TO SECTION 43B WOULD LEAD TO THE INCL USION OF THE EMPLOYERS' CONTRIBUTION AS WELL. 8. MR. GUPTA SUBMITTED THAT THE TRIBUNAL ERRED IN D ELETION OF THE ADDITION OF THE AMOUNT TO THE EXTENT OF RS. 32, 03,947 AND THAT THE IMPUGNED ORDER DATED JULY 29, 2011, IS LIA BLE TO BE QUASHED. MR. GUPTA RELIED UPON THE JUDGMENT OF THE PUNJAB AND HARYANA HIGH COURT IN CIT V. LAKHANI RUBBER WOR KS REPORTED IN [2010] 326 ITR 415 (P&H) AND SUBMITTED THAT QUESTIONS NOS. 1 AND 2 IN THAT CASE HAD ALREADY BEE N DECIDED AGAINST THE REVENUE IN VIEW OF THE DECISION OF ALOM EXTRUSIONS LTD. (SUPRA). IT IS FOR THIS REASON THAT HE DID NOT PRESS FOR AN ANSWER TO QUESTION NO. 1 IN THESE APPEALS. 9. MR. NANIWADEKAR, LEARNED COUNSEL APPEARING ON BE HALF OF THE ASSESSEE, ON THE OTHER HAND, RELIED UPON THE DECISI ON OF THE SUPREME COURT UPON THE DECISION OF ALOM EXTRUSIONS (SUPRA) AND POINTED OUT THAT THE SCHEME OF THE INCOME-TAX A CT, 1961, AS IT EXISTED PRIOR TO APRIL 1, 1984, AND THEREAFTE R. 10. HE SUBMITTED THAT SECTION 43B MADE IT MANDATORY FOR THE DEPARTMENT TO GRANT DEDUCTION IN COMPUTING THE INCO ME UNDER SECTION 28 IN THE YEAR IN WHICH TAX, DUTY, CESS, ET C., IS ACTUALLY PAID. HOWEVER, PARLIAMENT TOOK COGNIZANCE OF THE FA CT THAT THE ACCOUNTING YEAR OF A COMPANY DID NOT ALWAYS TALLY W ITH THE DUE DATES UNDER CERTAIN STATUTES AND, THEREFORE, BY WAY OF THE FIRST PROVISO, AN INCENTIVE/RELAXATION WAS SOUGHT TO BE G IVEN IN RESPECT OF TAX, DUTY, CESS OR FEE BY EXPLICITLY STA TING THAT IF SUCH TAX, DUTY, CESS OR FEE IS PAID BEFORE THE DATE OF F ILING OF THE RETURN UNDER THE INCOME- TAX ACT, THE ASSESSEE WOUL D BE ENTITLED TO DEDUCTION. IT DID NOT APPLY TO CONTRIBU TIONS TO LABOUR WELFARE FUNDS. 11. THE SECOND PROVISO RESULTED IN IMPLEMENTATION P ROBLEMS AND WHICH LED TO DELETION OF THE SECOND PROVISO IN THE FINANCE ACT, 2003, AND BRINGING ABOUT UNIFORMITY IN THE FIR ST PROVISO BY EQUATING TAX, DUTY, CESS AND FEE WITH CONTRIBUTIONS TO WELFARE FUNDS LIKE EMPLOYEES' PROVIDENT FUND, SUPERANNUATIO N FUND AND OTHER WELFARE FUNDS. THE FIRST PROVISO BY THE FINAN CE ACT, 2003, WAS MADE APPLICABLE WITH EFFECT FROM APRIL 1, 2004, AND THE ASSESSEE WOULD ARGUE THAT IT WAS CURATIVE IN NATURE , M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 6 CLARIFICATORY AND, THEREFORE, APPLIED RETROSPECTIVE LY FROM APRIL 1, 1988. THE DEPARTMENT ARGUED THAT IT WAS CLARIFAC TORY AND, THEREFORE, APPLIED PROSPECTIVELY. THE SUPREME COURT HELD THAT THE FINANCE ACT, 2003, WOULD BE APPLICABLE RETROSPE CTIVELY AND DEFAULTER WHO FAILS TO PAY THE CONTRIBUTION TO THE WELFARE FUND RIGHT UP TO APRIL 1, 2004, AND WHO PAYS THE CONTRIB UTION AFTER APRIL 1, 2004, WOULD GET THE BENEFIT OF DEDUCTION U NDER SECTION 43B OF THE INCOME-TAX ACT. IT IS HELD THAT THE FINA NCE ACT, 2003, TO THE EXTENT INDICATED ABOVE WOULD BE CURATI VE IN NATURE AND, HENCE, IS RETROSPECTIVE. THE REASON BEING TO B E THAT THE EMPLOYERS SHOULD NOT SIT ON THE COLLECTED CONTRIBUT IONS AND DEPRIVE THE WORKMEN OF THE RIGHTFUL BENEFITS UNDER SOCIAL WELFARE LEGISLATIONS BY DELAYING THE PAYMENT OF CON TRIBUTIONS TO THE WELFARE FUNDS. 12. MR. NANIWADEKAR ALSO RELIED UPON THE JUDGMENT D ATED JULY 11, 2014, IN INCOME TAX APPEAL NO. 399 OF 2012 (CIT V. HINDUSTAN ORGANICS CHEMICALS LTD. [2014] 366 ITR 1 (BOM) PASSED BY THIS COURT, TO WHICH ONE OF US (S. C. DHA RMADHIKARI J.) WAS A PARTY WHERE THE FOLLOWING TWO ISSUES OF L AW WERE RAISED (PAGE 3) : '(A) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL, IN LAW, WAS RIGHT IN ALLOWING T HE CLAIM OF THE ASSESSEE ON ACCOUNT OF DELAYED PAYMENTS OF P. F. OF THE EMPLOYEES' CONTRIBUTION AMOUNTING TO RS. 1,82,77,138 BY RELYING ON THE DECI SION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT V. ALOM EX TRUSIONS LTD. [2009] 319 ITR 306 (SC) ? (B) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL IN LAW, WAS RIGHT IN DELETING THE DISA LLOWANCE OF RS. 10,00,300 ON BOND REGISTRATION CHARGES AND ALLO WING THE CLAIM OF THE ASSESSEE UNDER SECTION 37(1) OF THE IN COME-TAX ACT, 1961 ?' 13. IN THAT JUDGMENT, THIS COURT HELD THAT NO SUBST ANTIAL QUESTIONS OF LAW WOULD ARISE SINCE SECTION 43B IS I NSERTED IN THE INCOME-TAX ACT WITH EFFECT FROM APRIL 1, 1984, BY W HICH THE MERCANTILE SYSTEM OF ACCOUNTING WITH REGARD TO TAX, DUTY AND CONTRIBUTION TO WELFARE FUNDS STOOD DISCONTINUED. U NDER SECTION 43B OF THE INCOME-TAX ACT, IT BECAME MANDATORY FOR THE ASSESSEE TO ACCOUNT FOR SUCH PAYMENT INCLUDING TO W ELFARE FUNDS NOT ON THE MERCANTILE BASIS BUT ON CASH BASIS . THE JUDGMENT FURTHER MENTIONS THAT THIS SITUATION CONTI NUED BETWEEN APRIL 1, 1984, AND APRIL 1, 1988. IT IS ALS O NOTICED THAT SECTION 43B WAS AGAIN AMENDED AND THE FIRST PROVISO THERETO HAS BEEN ADDED WHICH WAS RESTRICTED TO TAX, DUTY, C ESS OR FEE M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 7 EXCLUDING LABOUR WELFARE. IN VIEW THEREOF, THE SECO ND PROVISO AS FOLLOWS CAME TO BE INSERTED : 'PROVIDED FURTHER THAT NO DEDUCTION SHALL, IN RESPE CT OF ANY SUM REFERRED TO IN CLAUSE (B), BE ALLOWED UNLESS SUCH S UM HAS ACTUALLY BEEN PAID DURING THE PREVIOUS YEAR ON OR B EFORE THE DUE DATE AS DEFINED IN THE EXPLANATION BELOW CLAUSE (VA) OF SUB-SECTION (1) OF SECTION 36.' THE SECOND PROVISO WAS FURTHER AMENDED WITH EFFECT FROM APRIL 1, 1989, TO READ AS UNDER : 'PROVIDED FURTHER THAT NO DEDUCTION SHALL, IN RESPE CT OF ANY SUM REFERRED TO IN CLAUSE (B), BE ALLOWED UNLESS SUCH S UM HAS ACTUALLY BEEN PAID IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE ON OR BEFORE THE DUE DATE AS DEFINED IN THE EXPLANATION BELOW CLAUSE (VA) OF SUB-SECTION (1) OF SECTION 36, AND WHERE SUCH PAYMENT HAS BEEN MADE OTHERWISE THAN IN CASH, THE SUM HAS BEEN REALISED WITHIN FIFTEEN DAYS FROM THE DUE DATE.' 14. FROM A READING OF ABOVE, IT IS CLEAR THAT THE E MPLOYER- ASSESSEE WOULD BE ENTITLED TO DEDUCTION ONLY IF THE CONTRIBUTION TO THE EMPLOYEES' WELFARE FUND STOOD CREDITED ON OR BEFORE THE DUE DATE AND NOT OTHERWISE. IT TRANSPIRES THAT INDU STRY ONCE AGAIN MADE REPRESENTATIONS TO THE MINISTRY OF FINAN CE TO REMOVE THIS ANOMALY. THE RESULT WAS THAT AN AMENDME NT WAS INSERTED WHICH CAME INTO FORCE WITH EFFECT FROM APR IL 1, 2004, AND TWO CHANGES WERE MADE IN SECTION 43B, FIRSTLY, BY DELETING THE SECOND PROVISO AND FURTHER AMENDMENT IN THE FIR ST PROVISO WHICH READS AS UNDER : 'PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SH ALL APPLY IN RELA TION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR F URNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 1 39 IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED AS AFORESAID AND THE EVIDENCE OF S UCH PAYMENT IS FURNISHED BY THE ASSESSEE ALONG WITH SUC H RETURN.' 15. IN THIS MANNER, THE AMENDMENT PROVIDED BY THE F INANCE ACT, 2003, PUT ON PAR THE BENEFIT OF DEDUCTIONS OF TAX, DUTY, CESS AND FEE ON THE ONE HAND WITH CONTRIBUTIONS TO VARIOUS EMPLOYEES' WELFARE FUNDS ON THE OTHER. ALL THIS CAM E UP FOR CONSIDERATION BEFORE THE HON'BLE SUPREME COURT IN T HE CASE OF ALOM EXTRUSIONS LTD. (SUPRA). THE TRIBUNAL IN THE C ASE AT HAND RELIED UPON THE SAID JUDGMENT. THERE IS NO REASON T O FAULT THE ORDER PASSED BY THE TRIBUNAL. WE ARE OF THE VIEW TH AT THE DECISION OF THE SUPREME COURT IN ALOM EXTRUSIONS LT D. APPLIES TO THE EMPLOYEES' CONTRIBUTION AS WELL AS EMPLOYERS ' M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 8 CONTRIBUTION. QUESTIONS NOS. 2, 3 AND 4 ARE ACCORDI NGLY ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 16. THE FACTS IN INCOME TAX APPEAL NO. 1034 OF 2012 ARE SIMILAR, EXCEPT FOR THE CHANGE IN THE ASSESSMENT YE AR AND THE QUESTIONS ARISE OUT OF THE COMMON ORDER OF THE TRIB UNAL DATED JULY 29, 2011, AND, ACCORDINGLY, QUESTIONS NOS. 2, 3 AND 4 ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. WE HOLD THAT BOTH EMPLOYEES' AND EMPLOYER'S CONTRIB UTIONS ARE COVERED UNDER THE AMENDMENT TO SECTION 43B OF THE I NCOME- TAX ACT AND THE ALOM EXTRUSIONS JUDGMENT. HENCE, TH E TRIBUNAL WAS RIGHT IN HOLDING THAT PAYMENTS THEREOF ARE SUBJ ECT TO BENEFITS OF SECTION 43B. BOTH THE APPEALS ARE DISPO SED OF ACCORDINGLY. NO ORDER AS TO COSTS. 2.2. IN THE AFORESAID DECISION, THE HON'BLE HIGH C OURT HAS DULY CONSIDERED SECTION 43B OF THE ACT. SUCH PAYMENT/DEPOSIT, IF DEPOSITED WITH DUE DATE OF FILI NG OF RETURN OF INCOME U/S 139(1) OF THE ACT THEN IT IS A N ALLOWABLE DEDUCTION. THE RATIO LAID DOWN IN FOLLOWI NG CASES ALSO FORTIFIES THE CASE OF THE ASSESSEE. I. CIT VS RAJASTHAN STATE GANGANAGAR SUGAR MILLS LTD. (2017) 393 ITR 0421 (RAJ.) SLP DISMISSED: [(2017) 84 TAXMANN.COM 185 (SC)] II. BIHAR STATE WAREHOUSING CORP. LTD. V. CIT [(2017) 3 93 ITR 386 (PATNA HC)] III. SAGUN FOUNDRY (P.) LTD. V. CIT [(2017) 291 CTR 557 (ALL.)(HC)] IV. CIT V. MAGUS CUSTOMERS DIALOG P. LTD. [(2015) 371 I TR 242 (KAM.) (HC)] V. CIT V. NUCHEM LTD. [(2015) 59 TAXMANN.COM 455 (PUNJAB & HARYANA)] VI. ESSAE TERA OKA (P) LTD .. V. DCIT [(2014) 366 ITR 408 (KAM.)(HC)] M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 9 VII. CIT V. HERNIA EMBROIDERY MILLS (P.) LTD. [(2014) 36 6 ITR 167 (P&H)(HC)] VIII. CIT V. JAIPUR VIDYUT VITRAN NIGAM LTD. [(2014) 363 ITR 307 (RAJASTHAN)] IX. CIT V. STATE BANK OF BIKANER & JAIPUR [(2014) 363 ITR 70 (RAJ.) (HC)] X. CIT V. MARK AUTO INDUSTRIES LTD. [(2014) 358 ITR 43 (P&H)] XI. CIT V. SPECTRUM CONSULTANTS INDIA (P) LTD[(2014) 26 6 CTR 241 (KRN.)(HC)] XII. CIT V. VIJAY SHREE LTD.[ (2014) 43 TAXMANN.COM 396 (CAL.)(HC)] XIII. CIT V. KICHHA SUGAR CO. LTD. [(2013) 356 ITR 351 (UTTARAKHAND)] XIV. CIT VIS. ANZ INFORMATION TECHNOLOGY (P) LTD. {(2009) 318 ITR 123 (KARN)} XV. CIT V. AIMIL LTD.[(2010) 321 ITR 508 (DEL)] IN A LATER DECISION, HON'BLE RAJASTHAN HIGH COURT I N THE CASE OF CIT VS RAJASTHAN STATE GANGANAGAR SUGAR MILLS LTD. (2017) 393 ITR 0421 (RAJ.) HELD AS UNDER:- 41. AS REGARDS THE SUBSTANTIAL QUESTION FRAMED IN DB INCOME TAX APPEAL NO.120/2012. REFERRED TO SUPRA, IN REGARD TO DELETING ADDITION OF RS.7,61,777/- MADE ON ACCOUNT OF DEPOSITING THE PF/ESI PAYMENT BEYOND THE PRESCRIBED TIME, COUNSEL FOR THE APPELLANT-REVENUE CONTENDED THAT THE SAID AMOUNT WAS REQUIRED TO BE DISALLOWED AS ONCE IT WAS PAID BEYOND THE PRESCRIBED TIME UNDER THE RELEVANT STATUTES OF PROVIDENT FUND/ESI, THE AMOUNT COULD NOT HAVE BEEN ALLOWED. HE THUS CONTENDED THAT THE MANDATE OF THE STATUTE HAS TO BE STRICTLY FOLLOWED AND THE ASSESSEE OUGHT TO HAVE PAID THE AMOUNT ACCORDING TO THE DUE DATE ACCORDING TO THE RELEVANT PROVISIONS OF PF/ESI AND M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 10 SINCE THERE WAS VIOLATION OF THOSE ACTS, THEREFORE, THE BENEFIT/DEDUCTION CANNOT BE GRANTED/ALLOWED. 41.1 HOWEVER, LEARNED COUNSEL FOR THE ASSESSEE, IN SO FAR AS THE ABOVE QUESTION IS CONCERNED, CONTENDED THAT THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. M/S. STATE BANK OF BIKANER & JAIPUR AND COMMISSIONER OF INCOME TAX VS. JAIPUR VIDYUT VITARAN NIGAM LTD. : (2014) 363 ITR 70 (RAJ.), HAS HELD THAT IF THE AMOUNT IS PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN OF INCOM E, THE SAME IS ALLOWABLE. 41.2. WE HAVE CONSIDERED THE ARGUMENTS AND IN OUR VIEW, THE ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. M/S. STATE BANK OF BIKANER & JAIPUR AND OF INCOME TAX VS. JAIPUR VIDYUT VITARAN NIGAM LTD. (SUPRA) AND CIT VS. UDAIPUR DUGDH UTPADAK SAHKARI SANGTH LTD.: (2014) 366 ITR 163 (RAJ.) WHEREIN, THIS COURT, AFTER TAKING INTO CONSIDERATION THE JUDGMENTS OF THE APEX COURT, HAS COME TO THE CONCLUSION THAT IF PF/EPF/CPF/GPF ETC., IF PAID AFT ER DUE DATE UNDER THE RESPECTIVE ACT BUT BEFORE FILING OF THE RETURN OF INCOME UNDER SECTION 139(1) OF THE IT ACT, THE SAME CANNOT BE DISALLOWED. 42. TAKING INTO CONSIDERATION THE SAME AND THE FACT S NOTICED HEREIN BEFORE, THE QUESTION RELATING TO PF/ ESI PAYMENT BEYOND THE PRESCRIBED TIME IS ALSO ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 2.3. IT IS NOTEWORTHY THAT SLP AGAINST THE AFORESA ID ORDER WAS DISMISSED BY HON'BLE APEX COURT IN (2017) 84 TAXMAN.COM 185 (SC). CONSIDERING THE AFORESAID JUDI CIAL PRONOUNCEMENTS, WE ARE OF THE VIEW, IF THE PAYMENT WAS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN O F INCOME U/S 139(1) OF THE ACT THEN IT IS AN ALLOWABLE DEDUC TION. WE M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 11 HOLD SO. ACCORDINGLY, THE LD. ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIMED DEDUCTION IN THE LIGHT OF THE AFO RESAID OBSERVATION, IF THE PAYMENT OF EMPLOYEES CONTRIBUTI ON TOWARDS PF & ESIC IS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN. THUS, WE FIND NO INFIRMITY IN THE CONCLU SION OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) THE APPEAL OF THE REVENUE IS DISMISSED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 20/12/2017. SD/- SD/- ( RAMIT KOCHAR ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER ' # MUMBAI; ' DATED : 20/12/2017 F{X~{T? P.S/. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. )*+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / ' 0! ( )* ) / THE CIT, MUMBAI. 4. / / ' 0! / CIT(A)- , MUMBAI 5. 23 -! , / )*% ) 4 , ' # / DR, M/S AVION SYSTEMS PVT. LTD. ITA NO.3282/MUM/2016 12 ITAT, MUMBAI 6. 5 6# / GUARD FILE. / BY ORDER, .2*! -! //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ' # / ITAT, MUMBAI