RMP Bearings Ltd., Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-3(1)(2), Ahmedabad

ITA 3401/AHD/2016

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5701 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 16-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Section: 43B; 143(3); 201; 143(2); 139(1); 254(2); 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER RMP BEARINGS LTD. AHMEDABAD PAN: AABCR0266K (APPELLANT) VS THE D CIT, CIRCLE - 3( 1 )(2) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI MUDIT NAGPAL , SR. D . R. ASSESSEE BY: SHRI P.M. MEHTA, A.R. DATE OF HEARING : 29 - 10 - 2 018 DATE OF PRONOUNCEMENT : 30 - 11 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A. Y. 2013 - 14 , ARI SES FROM ORDER OF THE CIT(A) - 9, AHMEDABAD DATED 24 - 10 - 2 016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2 . THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IN THIS CASE IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE DISALLOWA NCE MADE BY THE ASSESSING OFFICER U/S. 36(1)(VA) OF RS. 41 ,60, 052/ - PERTAINING TO EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND AND EMPLOYEES STATE INSURANCE CORPORATION. I T A NO . 3401 / A HD/20 16 A SS ESSMENT YEAR 2013 - 14 I.T.A NO. 3401 /AHD/20 16 A.Y. 2013 - 14 PAGE NO RMP BEARINGS LTD. VS. D CIT 2 3. THE FACT IN BRIEF OF THE CASE IS THAT RETURN OF INCOME DECLARING INCOME OF RS. 3 , 29 , 39 ,454/ - WAS FILED O N 29TH SEP, 2013. SUBSEQUENTLY , THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NO TICE U/S. 143(2) OF THE ACT ON 4 TH SEP, 2014. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE W A S CALLED UPON TO FURNISH DETAIL OF EMPLO YEES CONTRITION TO PROVIDENT FUND AND EMPLOYEES STATE INSURANCE CORPORATION . THE DETAIL OF THE SAME IS REPRODUCED AS UNDER: - MONTH AMOUNT RS. DUE DATE DT.OF PAYMENT APRIL, 2012 3,40,142 20/05/2012 17/07/2012 MAY, 2012 3,55,938 20/06/2012 17/0 7/2012 JUNE, 2012 3,43,884 20/07/2012 21/08/2012 JULY, 2012 3,49,090 20/08/2012 19/11/2012 AUG. 2012 3,46,761 20/09/2012 19/11/2012 SEPT. 2012 3,46,761 20/10/2012 28/12/2012 OCT.2012 3,51,201 20/11/2012 18/01/2013 NOV. 2012 3,40 ,247 20/12/2012 24/01/2013 DEC. 2012 3,53,476 20/01/2013 19/02/2013 JAN. 2013 3,49,482 20/02/2013 13/03/2013 FEB. 2013 3,26,485 20/03/2013 28/05/2013 MARCH, 2013 3,56,585 20/04/2013 15/06/2013 TOTAL 41,60,052 4. AFTER TAKING INTO CONSIDERATION THE DETAIL FILED BY THE ASSESSEE. ASSESSING OFFICER HAS ASKED THE ASSESSEE TO SHOW CA U SE WHY NOT THE LATE PAYMENT OF PF & ESIC COLLECTED FROM EMPLOYEES SHOULD NOT BE DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE A SSESSEE WHICH CO MES TO RS 41 , 60 ,052/ - . THE ASSESSEE EXPLAINED VIDE LETTER DATED 13 - 10 - 2015 THAT THE AFORESAID PAYMENTS WERE PAID WELL BEFORE THE DUE DATE OF F ILING OF RETURN OF INCOME FOR YEAR 2013 - 14 AND BEFORE T HE END OF THE Y EAR UNDER CONSIDERATION . IT HAS ALSO MEN TIONED THAT FINANCE A C T I.T.A NO. 3401 /AHD/20 16 A.Y. 2013 - 14 PAGE NO RMP BEARINGS LTD. VS. D CIT 3 2003 HAS DELETED THE SECOND PROVISO AND AMENDED FIRST PROVISO W.E.F ASSESSMENT YEAR 2004 - 05 WHEREIN IT HAS BEEN STATED THAT IF PAYMENT OF PROVIDENT FUND CONTRIBUTION HAS BEEN MADE WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME , T HE SAME IS ALLOWABLE AS DEDUCTION U/S. 43 OF THE ACT. THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE A SSESSE E IN VIEW OF THE SPECIFIC PROVISION OF SECTION 36(1)(VA) R.W . SECTION 2 (24)(X) OF THE ACT THE DEDUCTION FOR THE EMPLOYEES CONTRIBU TION IS ALLOWABL E ONLY IF SUCH SUM IS CREDITED BY THE ASSE SSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE. SINCE THE ASSESSEE HAS DEPOSITED THE EMPLOYEES CONTRIBUTION BEYOND THE TIME ALLOWED , THEREFORE , IN VIEW OF TH E PROVISION OF SECTION 36(1 ) (VA) OF T HE ACT THE AMOUNT OF RS . 41 , 60 , 052/ - BEING PF & ESIC ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) HAS SUSTAINED THE DISALLOWANCE MA DE BY THE ASSESSING OFFICER. RELEVANT PART O F T H E DECISION OF LD . CIT(A) IS REPRODUCED AS UNDER: - 7.2 I HAVE CAREFULLY CONSIDERED RIVAL CONTENTION, CASE LAW RELIED UPON AS WELL AS OBSERVATIONS MADE BY THE A.O. IN THE ASSESSMENT ORDER IT CAN BE OBSERVED FROM PARA - 3 OF THE ASSESSMENT ORDER THAT THE APPELLANT HAS FAILED IN DEPOSI TING, EMPLOYEES CONTRIBUTION IN RESPECT OF PF & ESI AMOUNTING TO RS.41,60,052/ - AS PER THE RESPECTIVE DUE DATE. THE A.O HAS DISALLOWED THE SAID AMOUNT AND ADDED TO THE TOTAL INCOME OF THE APPELLANT AS PER THE PROVISIONS OF SEC. 2(24)(X) R.W.S, 36(1)(VA) OF THE ACT. THE PROVISIONS OF SECTION 43B ARE APPLICABLE IN RESPECT OF EMPLOYEES CONTRIBUTION AND IN THIS CONTEXT IT IS DIFFERENT FROM THE PROVISIONS OF SEC.36(1 )(VA); THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS GUJARAT STATE ROAD TRANSPORT CORP ORATION 265 CTR 64 HAVE HELD THAT WHEN THE EMPLOYER HAS NOT CREDITED THE SUM RECEIVED BY IT AS EMPLOYEES CONTRIBUTION TO EMPLOYEES ACCOUNT IN RELEVANT FUND ON OR BEFORE DUE DATE AS PRESCRIBED IN EXPLANATION TO SECTION 36(1)(VA), THE ASSESSEE SHALL NOT BE E NTITLED TO DEDUCTION OF SUCH AMOUNT THOUGH HE DEPOSITS THE SAID SUM BEFORE THE DUE DATE PRESCRIBED U/S,43B, I.E. PRIOR TO FILING OF RETURN U/S. 139(1) OF THE IT.ACT. SINCE IN THIS CASE, THE EMPLOYEES CONTRIBUTION TOWARDS P.P. & ESIC WAS NOT DEPOSITED BEFOR E DUE DATE AS PRESCRIBED IN EXPLANATION TO SECTION 36(1 )(VA), ACCORDINGLY, ADDITION OF RS.41,60,052/ - IS CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 5. DURING THE COURSE O F APPELLATE PROCEEDINGS BEFORE US LD. COUNSEL HAS REFERRED THE DECISION OF HON BLE HIGH COURT OF GUJARAT IN THE CASE OF SALASAR LA MINATES LTD. VS. DCIT APPEAL NO . 1186 OF 2018 DATED 1 ST OCT , 2018. HE HAS CONTENDED T HAT VIDE THE REFERRED JUDGMENT THE JURISDICTIONAL HIGH C OURT HAS DISMISSED THE APPEAL OF THE ASSESSEE WITH THE REMARKS THAT IF THE HON BLE SUPREME COURT REVERSED THE JUDGMENT IN CASE OF CIT VS. GSRTC IT WOULD BE OPEN TO ASSESSEE TO REVIVE THE APPEAL THE BY FILING AN APPLICATION FOR SUCH I.T.A NO. 3401 /AHD/20 16 A.Y. 2013 - 14 PAGE NO RMP BEARINGS LTD. VS. D CIT 4 PURPOSE WITH IN THE THREE MONTHS FORM THE DATE OF THE JUDGMENT. HE HAS CONTENDED THAT H IS CASE SHOULD BE DECIDED AFTER CONSIDERI NG THE REFERRED JUDGMENT OF HON BLE HIGH COURT. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS VEHEMENTLY CONTEND ED THAT LD. CIT(A) S DECISION IS JUSTIFIED AFTER TAKING INTO CONSIDERATION THE DECISION OF T HE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. G S R TC REPORTED IN 366 ITR 170 . 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON R ECORD CAREFULLY. THE ASSESSEE HAS NOT DEPOSITED THE CONTRIBUTION RECEIVED FROM THE EMPLOYEES UNDER THE PROVIDENT FUND ACT AND THE ESI ACT WITHIN THE DUE DATES AS PRESCRIBED UNDER THE PROVIDENT FUND ACT AND THE ESI ACT AMOUNTING TO RS. 41,60,052/ - . WE CON SID ER THAT HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION 265 CTR 64 HAS HELD THAT WHEN THE EMPLOYER HAS NOT CREDITED THE SUM RECEIVED BY IT AS EMPLOYEES CONTRIBUTION TO EMPLOYEE S ACCOUNT IN RELEVANT FUND ON OR BEFORE DUE DATE AS PRESCRIBED IN EXPLANATION TO SECTION 36(I)(VA) THE ASSESSEE SHALL NOT BE ENTITLED TO DEDUCTION. IN VIEW OF THE ABOVE FACTS AND THE JUDICIAL FINDINGS, WE UPHOLD THE DECISION OF LD. CIT(A). ACCORDINGLY, THE APPEAL OF THE ASSES SEE IS DISMISSED. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS REFERRED THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF SALADAR LAMINATES LTD. VS. DCIT CIRCLE 4(1)(1) VIDE R/TAX APPEAL NO. 11 86 OF 2018 WHEREIN THE ASSESSEE HAS STAT ED THE APPEAL AGAINST THE DECISION OF HON BLE COURT OF GUJARAT IN THE CASE OF THE C I T VS. GSRTC IS PENDING BEFORE THE HON BLE SUPREME COURT AND THE BENEFIT OF TH E JUDGMENT OF THE SUPREME C OURT MAY BE MADE AVAILABLE TO THE ASSESSE AS AND WHEN RENDERED AND IN CASE JUDGMENT OF THE H ON BLE COUR T IN THE CASE OF GSRTC IS REVERSED . THE JURISDICTIONAL HIGH COURT HAS DISMISSED THE APPEAL OF THE ASSESSE WITH THE REMARK THAT IF THE SUPREME COURT REVERSES THE JUDGMENT IN THE CASE OF CIT VS. GSRTC , IT WOULD BE OPEN FOR THE ASSSESSEE TO REVIVE THE APPEAL BY FILING AN APPLICATION FOR SUCH PURPOSE WITHIN THREE MONTH FROM THE DATE OF THE JUDGMENT. ON THE STRENGTH I.T.A NO. 3401 /AHD/20 16 A.Y. 2013 - 14 PAGE NO RMP BEARINGS LTD. VS. D CIT 5 OF HON BLE GUJARAT HIGH COURT DECISION RENDERED IN THE CASE OF SALADAR LAMINATES LTD. VS. DCIT CIRCLE 4(1)(1) VIDE R/TAX APPEAL NO. 1186 OF 2018 LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH HON BLE HIGH COURT HAS UPHELD THE DISALLOWANCES MADE U/S. 36(1)(IV) OF THE INCOME TAX ACT IN CASE IF ASSESSEE FAILED TO DEPOSIT THE EMPLOYEE S CON TRIBUTION WITHIN THE TIME LIMIT PROVIDED IN PF AND ESIC ACT BUT IN THE CONCLUDING PARAGRAPHS HON BLE HIGH COURT HAS GIVEN LIBERTY TO THE ASSESSEE TO FILE APPLICATION WITHIN THREE MONTHS FROM THE DECISION OF HON BLE HIGH COURT RENDERED ON THE APPEAL OF GSRT C IF HON BLE SUPREME COURT REVERSED THE ORDER OF HON BLE HIGH COURT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IDENTICAL DIRECTION BE GIVEN IN THE PRESENT CASE APPEAL. WE HAVE CONSIDERED THE ABOVE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE, IT IS PERTINENT TO OBSERVE THAT IF JUDGMENT OF THE HON BLE GUJARAT HIGH COURT RELIED UPON BY THE TRIBUNAL WHILE DECIDING THE APPEAL IS BEING REVERSED BY THE HON BLE SUPREME COURT THE SAME WOULD BE SUFFERING AN APPARENT ERROR. AN APPLICATION AS PROVIDED U/S. 254(2) C AN BE FILED BY THE ASSESSEE ON SUCH REVERSAL WITHIN THE TIME LIMIT PROVIDED IN THE ACT AND NO SEPARATE DIRECTIONS ARE REQUIRED TO BE ISSUED. IT IS ALSO OBSERVED THAT BY GIVING DIRECTIONS SIMILAR TO THE DIRECTIONS GIVEN BY THE HON BLE HIGH COURT , THE ITAT WOULD BE ENHANCING T HE TIME LIMIT IF ANY APPLICA BLE IN THE PRESENT CASE U/S. 254(2) FOR WHICH IT HAS NO SUCH POWER , T HEREFORE, WE DO NOT FIND ANY FORCE IN THE ALTERNATIVE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE AND THE SAME IS REJECTED. 7. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS REJECTED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 30 - 11 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOU NTANT MEMBER AHMEDABAD : DATED 30 /11 /2018 / COPY OF ORDER FORWARDED TO: - I.T.A NO. 3401 /AHD/20 16 A.Y. 2013 - 14 PAGE NO RMP BEARINGS LTD. VS. D CIT 6 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,