Nemhans Solutions Private Limited, Bhubaneswar V. ACIT, Circle-2(2), Bhubaneswar

ITA 346/CTK/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7544 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 19-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEVENDU DUTTA
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N. S SAINI, ACCOUNTANT MEMBER ITA NO.346/CTK/2016 ASSESSMENT YEAR : 2012 - 2013 NEMHANS SOLUTIONS PVT LTDS., PLOT NO.N - 4, 234, IRC VILLA G E, BHUBANESWAR . VS. ACIT, CIRCLE - 2(2), AAYAKAR BHAVAN, BHUBANESWAR PAN/GIR NO. AEQPR 5276 P (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE (ADJOURNMENT PETITION ) REVENUE BY : SHRI SEVENDU DUTTA , DR DATE OF HEARING : 30 /11 / 2016 DATE OF PRONOUNCEMENT : 30/11 / 2016 O R D E R THIS AN APPEAL FILED BY THE ASSESSEE AGAINST ORDER OF CIT(A) - 1, BHUBANESWAR DATED 8 TH JULY, 2016 , FOR THE ASSESSMENT 2012 - 2013. 2. THE SOLE IS SUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PF AND ESI AMOUNTING TO RS.4,02,695/ - IN VIEW OF THE FACT THAT THE SAID AMOUNTS WERE NOT DEPOSITED BEFORE THE DUE DATE UNDER THE RESPECTIVE ACT. 2 ITA NO.346/CTK/2016 ASSESSMENT YEAR :2012 - 2013 3. LD A.R. OF THE ASSESSEE HAS FILED AN ADJOURNMENT PETITION, WHICH WAS REJECTED ON THE GROUND THAT THE REASON FOR SEEKING ADJOURNMENT WAS NOT PLAUSIBLE. 4. I HAVE HEARD LD D.R. AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER FOUND THAT THE ASSESSE E HAD NOT REMITTED THE EMPLOYEES CONTRIBUTIONS TOWARDS EPF AND ESI TOTALLING RS.4,02,695/ - WITHIN THE DUE DATE AS SPECIFIED IN THE RESPECTIVE STATUTES. ACCORDINGLY, HE DISALLOWED THE SAME U/S.36(1)(VA) R.W.S 2(24)(X) OF THE ACT. 5. ON APPEAL, LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER RELYING ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION (TAX APPEAL NO.637 OF 2013). 6. AFTER HEARING LD D.R., I FIND THAT THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF ESSAE TERAOKA (P) LTD.VS DCIT, (2014) 366 ITR 408 VIDE JUDGMENT DATED 4.2.2014 HELD THAT THE WORD CONTRIBUTION WOULD MEAN IN EPF AND ESI ACT REFERS TO BOTH EMPLOYEES AND EMPLOYERS CONTRIBUTION TO PF AND , THEREFORE , NO DISALLOWANCE IS TO BE MADE UNDER SECTION 43B. THEREFORE, DEDUCTION IS ALSO AVAILABLE TO EMPLOYEES CONTRIBUTION TO PF U/S.43B OF THE ACT. FURTHER, THE HONBLE RAJASTHAN HIGH CO URT IN THE CASE OF CIT VS. STATE BANK OF BIKANER AND JAIPUR (201 4) 363 ITR 70 (RAJ) (HC). AND JAIPUR VIDYUT 3 ITA NO.346/CTK/2016 ASSESSMENT YEAR :2012 - 2013 VITARAN NIGAM LYTD., (2014) 363 ITR 307 (RAJ ) HELD THAT SECTION 43B OVERRIDES SECTION 36(1)(VA) AND DEDUCTION IS AVAILABLE FOR EMPLOYEES CONTRIBUTION U/S.43B OF THE ACT TO SAME EFFECT IS THE DECISION OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF CIT VS.KICHHA SUGAR COMPANY LTD . (2013) 356 ITR 351 (UTTARAKHAND H C) ORDER DATED 20.5.2013. TO THE SAME EFFECT IS ALSO THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V S. UDA IPUR DUGDH UTPADAK SAHAKARI SANG H LTD (2013) 35 TAXMANN.COM 616 (RAJ). THE CONTRARY VIEW IS THAT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS GUJARAT STATE ROAD TRANS PORT CORPN. (2014) 366 ITR 170 (GUJ) ORDER DATED 26.12.2013, WHEREIN, IT WAS HELD THAT 43B DOES NOT A PPLY TO EMPLOYEES CONTRIBUTION AND ONLY SECTION 2(24)(X) READ WITH SECTION 36(1)(VA) IS APPLICABLE , WHICH IS RELIED UPON BY LD CIT(A) IN HIS ORDER FOR CONFIRMING THE DISALLOWANCE . THEREFORE, EMPLOYEES CONTRIBUTION IS DISALLOWED IF NOT PAID WITHIN THE DUE DATE AS PER EPF/ESI ACT. THE SAID DECISION WAS RENDERED AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF ALOM EXTRUSIONS (SUPRA). THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS VIJAYA SHREE LTD., (2011) TMI 30 HELD THAT EMPLOYEES CONTRIBUTION TO PF/ESI IS ALSO COVERED BY SECTION 43B AND IS ALLOWABLE AS DEDUCTION IF PAID BEFORE DUE DATE OF FILING THE RETURN OF INCOME. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GHATGE PATIL TRANSPORTS LTD. IN IT APPEAL NOS.1002 & 1034 OF 2012, VIDE ORDER DATED 4 ITA NO.346/CTK/2016 ASSESSMENT YEAR :2012 - 2013 14.10.2014 HAS HELD THAT EMPLOYEES CONTRIBUTION TO PF AND ESI IS ALLOWABLE IF THE SAME IS DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S.2(24)(X) R.W.S. 36(1)(VA) AND 43B OF THE ACT. THE HONBLE DELHI HIGH COURT IN CIT VS. AIMIL LIMITED [2010] 321 ITR 508 (DEL) HAS HELD THAT THE EMPLOYEES CONTRIBUTION TOWARDS EPF AND ESI ETC. DEPOSITED AFTER THE DUE DATE BUT BEFORE THE TIME ALLOWED FOR FILING THE RETURN U/S.139(1) WILL NOT CALL FOR ANY DISALLOWANCE U/S.36(1)(VA) 7. IT IS ALSO SETTLED POSITION OF LAW THAT IF THERE ARE CONTRARY VIEWS OF DIFFERENT HIGH COURTS AND NONE OF THEM IS THE HONBLE JURISDICTIONAL HIGH COURT, THEN THE DECISION FAVOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED. MY VIEW IS SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLES PRODUCT LTD., 88 ITR 192 (SC) . THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF ESSAE TERAOKA (P) LTD.VS DCIT (SUPRA) AND OTHER DECI SIONS REFERRED ABOVE (SUPRA), I HOLD THAT EMPLOYEES CONTRIBUTION TO PF AND ESI IS ALLOWABLE DEDUCTION TO THE ASSESSEE IF DEPOSITED BEFORE DUE DATE OF FILING OF RETURN U/S.139(1)OF THE ACT. 8. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE CONTRIBUTION TO PF AND ESI WAS DEPOSITED BY THE ASSESSEE BEFORE DUE DATE OF FILING THE RETURN OF INCOME U/S.139(1) OF THE ACT. THEREFORE, I SET ASIDE THE ORDERS OF LOWER 5 ITA NO.346/CTK/2016 ASSESSMENT YEAR :2012 - 2013 AUTHORITIES AND DELETE THE DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PF AND ESI OF RS.4,02,695/ - AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 30 /11 /2016 . S D / - ( N. S SAINI ) A CCOUNTANT MEMBER CUTTACK; DATED 30 /11 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT :NEMHANS SOLUTIONS PVT LTDS., PLOT NO.N - 4, 234, IRC VILLAGE, BHUBANESWAR . 2. THE RESPONDENT. ACIT, CIRCLE 2 ( 2), BHUBANESWAR 3. THE CIT(A) - 1 , BHUBANESWAR 4. CIT , BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY// BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 6 ITA NO.346/CTK/2016 ASSESSMENT YEAR :2012 - 2013