The ACIT,Vapi Circle, Vapi V. M/s. Speciality Paper Ltd., Vapi

ITA 3306/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76800 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 22-05-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 14-12-2010
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Section: 43B; 15

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , ! ' ! ' ! ' ! '0 00 0 0 00 0 #' #' #' #', , , , $ $ $ $ % % % % BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 3306/AHD/2010 ASSESSMENT YEAR 2003-04 ASSISTANT COMMISSIONER OF INCOME TAX, VAPI CIRCLE, VAPI. VS M/S SPECIALITY PAPER LTD. VILLAGE-MORAI, N.H. NO. 8, VAPI. PAN: AAECS0861Q &'/ APPELLANT )&' / RESPONDENT REVENUE BY : SHRI K.C. MATHEWS, SR. DR ASSESSEE(S) BY : NONE *' + , -$/ // / DATE OF HEARING : 22 2222 22 /05/2014 /01 , -$ / DATE OF PRONOUNCEMENT : 30/05/2014 2 2 2 2/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 30.09.20 10. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING DISALLOWANCE OF RS 10,32,172/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF BELATED PAYMENT OF PF AND ESI WITHOUT CONSIDERING THE RELEVANT PROV ISIONS U/S. 2(24)(X) READ ITA NO. 3306/AHD/2010 M/S SPECIALITY PAPER LTD. FOR A.Y. 2003-04 - 2 - WITH SECTION 36(1)(VA) READ WITH 2 ND PROVISO TO SECTION 43B(B) OF THE I.T. ACT, 1961. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE PAID PF AND ESI CONTRIBU TION BEYOND THE TIME ALLOWED IN THE RELEVANT ACT I.E. 15 TH AND 21 ST OF THE NEXT MONTH RESPECTIVELY. ACCORDING TO THE ASSESSING OFFICER, UNDER THE PROVI SIONS OF SECTION 43B, IN CASE OF CONTRIBUTION TO RECOGNIZED PF OR ESI, DEDUCTION SHALL BE ALLOWED ONLY IF A SUM WAS ACTUALLY PAID ON OR BEFORE THE DUE DAT E PRESCRIBED UNDER THE RULES OF THAT PARTICULAR FUNDS I.E. 15 TH AND 21 ST OF NEXT MONTH. HE OBSERVED THAT IN THE AUDIT REPORT, THE ASSESSEE HAS ALSO INC LUDED THE GRACE PERIOD OF FIVE DAYS AND SHOWN 20 TH AND 26 TH OF THE NEXT MONTH AS THE LAST DATE FOR PAYING THE DUES. ACCORDING TO THE ASSESSING OFFICE R, IF THE PAYMENTS ARE NOT MADE WITHIN THE DUE DATE, THE DEFAULTING ASSESSEE W ILL NOT BE ENTITLED TO THE BENEFIT OF DEDUCTION WHICH IS OTHERWISE ALLOWABLE T O IT UNDER THE PROVISIONS OF THE ACT. HE FURTHER OBSERVED THAT GRACE PERIOD IS ONLY FOR NON-LEVY OF PENALTY AND DOES NOT COMPLY WITH SECTION 43B OF THE I.T. ACT. THEREFORE, THE ASSESSING OFFICER DISALLOWED DEDUCTION FOR CONTRIBU TION OF EMPLOYEES AND EMPLOYERS CONTRIBUTION TO PF AND ESI MADE AFTER TH E DUE DATE I.E. 15 TH AND 21 ST OF NEXT MONTH AND THEREBY MADE ADDITION OF RS 8,44 ,044/- UNDER THE HEAD PF AND RS 1,88,138/- UNDER THE HEAD ESI. 4. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPE ALS) ALLOWED THE DEDUCTION ON THE GROUND THAT THE HONBLE SUPREM E COURT IN THE CASE OF ALOM EXTRUSION LIMITED 219 ITR 306 (SC) HAS HELD TH AT DEDUCTION FOR CONTRIBUTION TO PF AND ESI WAS ALLOWABLE TO THE ASS ESSEE IF THE PAYMENTS WERE MADE BEFORE THE DUE DATE OF FILING OF RETURN O F INCOME U/S. 139(1) OF THE ACT. 5. THE DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ISSUE AT HAND WAS COVERED IN FAVOUR OF THE REVENUE BY THE DE CISION OF THE HONBLE ITA NO. 3306/AHD/2010 M/S SPECIALITY PAPER LTD. FOR A.Y. 2003-04 - 3 - GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE ROA D TRANSPORT CORPORATION (2014) 41 TAXMANN.COM 100 (GUJ.) WHETHER IT WAS HEL D THAT EMPLOYEES CONTRIBUTION TO PF, IF NOT PAID WITHIN THE DUE DATE PRESCRIBED U/S. 36(1)(VA), CANNOT BE ALLOWED AS DEDUCTION TO THE ASSESSEE. 6. NOTICE OF HEARING WAS SENT TO THE RESPONDENT AS SESSEE BY REGISTERED POST WITH ACKNOWLEDGMENT DUE ON 01.05.20 14 AND THE SAME WAS NOT RETURNED UNSERVED BY THE POSTAL AUTHORITIES. N ONE APPEARED WHEN THE CASE WAS CALLED FOR HEARING AND NEITHER ANY ADJOURN MENT PETITION WAS FILED ON BEHALF OF THE ASSESSEE. THE BENCH BEING OF THE VIEW THAT THE APPEAL CAN BE DISPOSED OFF IN THE ABSENCE OF AND WITHOUT THE A SSISTANCE OF THE ASSESSEE, THEREFORE THE BENCH PROCEEDED TO HEAR AND DECIDE TH E APPEAL TAKING INTO CONSIDERATION THE SUBMISSIONS OF DEPARTMENTAL REPRE SENTATIVE AND THE MATERIAL AVAILABLE ON RECORD. 7. WE HAVE HEARD THE DEPARTMENTAL REPRESENTATIVE A ND WE FIND THAT IN THE INSTANT CASE, THE ASSESSING OFFICER DIS ALLOWED PF PAYMENT OF RS 8,44,034/- AND ESI OF RS 1,88,138/- AS DEDUCTION TO THE ASSESSEE ON THE GROUND THAT THE PAYMENTS WERE NOT MADE WITHIN THE D UE DATE PRESCRIBED UNDER THE RESPECTIVE ACT. WE WOULD LIKE TO CLARIFY HERE THAT THE ABOVE AMOUNTS OF PF AND ESI CONTRIBUTION INCLUDE BOTH EMP LOYER AND EMPLOYEES CONTRIBUTION AS WELL AS ADMINISTRATIVE CHARGES PAID TO THE PF AND ESI AUTHORITIES. THE COMMISSIONER OF INCOME TAX (APPEA LS) FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F ALOM EXTRUSION LIMITED (SUPRA) HAD ALLOWED THE CLAIM FOR DEDUCTION TO THE ASSESSEE ON THE GROUND THAT THE PAYMENTS WERE MADE WITHIN THE DUE DATE PRE SCRIBED FOR FILING OF RETURN OF INCOME U/S. 139(1) OF THE ACT. 8. WE FIND THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT CORPORATION (SUPRA) AF TER CONSIDERING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F ALOM EXTRUSION LIMITED ITA NO. 3306/AHD/2010 M/S SPECIALITY PAPER LTD. FOR A.Y. 2003-04 - 4 - (SUPRA) HAS HELD THAT PAYMENT MADE FOR EMPLOYEES C ONTRIBUTION TO PF AND ESI IS ALLOWABLE DEDUCTION TO THE ASSESSEE IF THE S AME WAS PAID WITHIN THE DUE DATE PRESCRIBED UNDER THE RESPECTIVE ACTS AND N OT IF THE PAYMENTS WERE MADE WITHIN THE DUE DATE FOR FILING OF RETURN OF IN COME U/S. 139(1) OF THE ACT. THIS DECISION WAS FOLLOWED BY THE HONBLE GUJ ARAT HIGH COURT ALSO IN THE CASE OF CIT VS. BILAG INDUSTRIES LIMITED (2014) TAXCORP (DT) 57024 (HC- GUJ.). THEREFORE, FOLLOWING THE DECISION OF THE HO NBLE GUJARAT HIGH COURT PAYMENTS MADE FOR EMPLOYEES CONTRIBUTION TOWARDS P F AND ESI IS NOT ALLOWABLE AS DEDUCTION TO THE ASSESSEE IF NOT PAID WITHIN THE RESPECTIVE DUE DATES PRESCRIBED UNDER THOSE ACT. HOWEVER, WE FIND THAT NEITHER THE ASSESSING OFFICER NOR THE COMMISSIONER OF INCOME TA X (APPEALS) HAS GIVEN THE DETAILS OF THE DATE AND THE AMOUNT OF PAYMENT O F PF AND ESI CONTRIBUTION. THEREFORE, WE ARE UNABLE TO ADJUDICA TE THE ISSUE COMPLETELY. THEREFORE, WE RESTORE THIS ISSUE BACK TO THE FILE O F THE ASSESSING OFFICER WITH THE DIRECTION TO ALLOW DEDUCTION FOR EMPLOYEES CON TRIBUTION TO PF AND ESI IF SUCH PAYMENTS ARE MADE WITHIN THE DUE DATE UNDER TH E RESPECTIVE ACTS AND TO ALLOW DEDUCTION FOR EMPLOYERS CONTRIBUTION TO P F AND ESI IF THE SAID PAYMENT IS MADE BEFORE THE DUE DATE OF FILING OF RE TURN OF INCOME U/S. 139(1) OF THE ACT. THUS, THE GROUND OF APPEAL OF T HE REVENUE IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 30 TH OF MAY, 2014 AT AHMEDABAD. SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED /05/2014 GHANSHYAM MAURYA, SR. P.S.