M/s. Backbone Enterprise Ltd., Rajkot V. The Additional Commissioner of Income Tax, Range-2(1), Rajkot

ITA 341/RJT/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7027 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 05-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT AND MS. MADHUMITA ROY, JUDICIAL MEMBER ITA No. 341/Rjt/2017 Assessment Year : 2014-15 M/s. Backbone Enterprise Ltd., 417, Shivam Complex, Jagnath Plot, Dr. Yagnik Road, Rajkot PAN : AABCB 9255 E Vs The Additional Commissioner of Income-tax, Range-2(1), Rajkot / (Appellant) / (Respondent) Assessee by : Shri D.M. Rindani, AR Revenue by : Shri B.D. Gupta, Sr DR /Date of H ear in g : 09/06/2022 /Date of Pr on ou nc ement: 15/06/2022 आदेश/O R D E R PER P.M. JAGTAP, VICE-PRESIDENT : This appeal filed by the assessee is directed against the order of learned Commissioner of Income-tax (Appeals)-2, Rajkot (“CIT(A)” in short) dated 22.08.2017 for Assessment Year 2014-15. 2. The solitary grievance of the assessee is that the learned CIT(A) has erred in confirming the addition of Rs.8,53,905/-, which was added by the Assessing Officer with the aid of Section 2(24)(x) r.w.s. 36(1)(va) of the Income-tax Act, 1961 (“the Act” in short), for the late payment of employees’ contribution to Provident Fund. 3. At the time of hearing before us, the learned representatives of both sides fairly agree that the aforesaid issue is squarely covered against the assessee by the decision of Hon’ble jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj.), wherein it is categorically held that in the case of delayed deposit of employees’ contribution to PF, the same will not be deductable in computing income under Section 28 of the Act. It is observed that in the case of Gujarat State Road Transport Corporation (supra), the Hon’ble ITA No. 341/Rjt/2017 M/s. Backbone Enterprise Ltd Vs. ACIT AY : 2014-15 2 jurisdictional High Court has decided a similar issue vide its judgment dated 26.12.2013; the relevant paragraphs of which i.e. paragraph No.7.12 to 8 are reproduced below: “7.12 Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Sarabhai Sons Ltd. (supra), by the learned counsel appearing on behalf of the assessee and his submission that if two views are possible and different High Courts have taken a particular view, this Court may not take a different view, is concerned, we are of the opinion that in the present case, and as discussed hereinabove, only one view is possible as canvassed on behalf of the revenue and as observed by under section hereinabove and we are not in agreement with the view taken by the Himachal Pradesh High Court; Karnataka High Court; Rajasthan High Court and Punjab and Haryana High Court in the cases refereed to hereinabove, and therefore, the submission made on behalf of the assessee to follow the decisions of the different High Courts refereed to hereinabove and/or not to take a contrary view cannot be accepted. 8.00 In view of the above and for the reasons stated above, and considering section 36(1)(va) of the Income Tax Act, 1961 read with sub-clause (x) of clause 24 of section 2, it is held that with respect to the sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees' account in the relevant fund or funds on or before the "due date" mentioned in explanation to section 36(1)(va). Consequently, it is held that the learned tribunal has erred in deleting respective disallowances being employees' contribution to PF Account / ESI Account made by the AO as, as such, such sums were not credited by the respective assessee to the employees' accounts in the relevant fund or funds (in the present case Provident Fund and/or ESI Fund) on or before the due date as per the explanation to section 36(1)(va) of the Act i.e. date by which the concerned assessee was required as an employer to credit employees' contribution to the employees' account in the Provident Fund under the Provident Fund Act and/or in the ESI Fund under the ESI Act.” As the issue involved in the present case as well as all the material facts relevant thereto are similar to the case of Gujarat State Road Transport Corporation (supra), we respectfully follow the decision of Hon’ble jurisdictional High Court rendered in the said case and uphold the impugned order of the learned CIT(A) confirming the disallowance made ITA No. 341/Rjt/2017 M/s. Backbone Enterprise Ltd Vs. ACIT AY : 2014-15 3 by the Assessing Officer on account of belated payment of employees’ contribution towards Provident Fund. 4. In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 15 th June, 2022 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad, Dated 15/06/2022 *Bt /Copy of the Order forwarded to : 1. ! / The Appellant 2. "# ! / The Respondent. 3. $%$&' # # ( / Concerned CIT 4. # # ( ) (/ The CIT(A)- 5. + , # &' , # # &' /DR,ITAT, Rajkot, 6. , ./ 0 /Guard file. / BY ORDER, TRUE COPY ह # $ज (Asstt. Registrar) # # &' ITAT, Rajkot 1. Date of dictation- ...10.06.2022...- ... 2. Date on which the typed draft is placed before the Dictating Member ...14.06.2022......... Other member ... 14.06.2022.................. 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ...14.06.2022 ............... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement 15.06.2022.. 5. Date on which the file goes to the Bench Clerk...15.06.2022......... 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order..................... 8. Date of Despatch of the Order..................