Shishir Kumar Das , Hyderabad V. Dy. Commissioner of Income Tax , Circle-1, Amravathi

ITA 38/Hyd/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6176 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 09-01-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PAVITHRAN KUMAR
• Assessee Lawyers: M V ANIL KUMAR
• Section: 43B; 37(1); 143(1); 192; 139(1); 113

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 38/HYD/2020 ASSESSMENT YEAR: 2018 - 19 SHISHIR KUMAR DAS, HYDERABAD 500 029. PAN: AITPD 6386 K VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 10(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI M.V. ANIL KUMAR REVENUE BY: SHRI PAVITHRAN KUMAR DATE OF HEARING: 19/01/2021 DATE OF PRONOUNCEMENT: 02 /0 2 /2021 ORDER PER SMT. P. MADHAVI DEVI, J.M.: THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2018 - 19 AGAINST THE ORDER OF THE LD. CIT(A) - 6, HYDERABAD, DATED 22/11/ 2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ELECTRONICALLY ON 29/10/2018 DECLARING TOTAL INCOME OF RS. 13,92,360/ - . THE RETURN OF INCOME WAS PROCESSED U/S. 143(1) OF THE ACT BY THE ASSESSING OFFICER AT CPC, B E NGALURU DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 2 40,14,930/ - BY MAKING ADJUSTMENT OF RS. 26,22,570/ - U/S. 36(1)(VA) OF THE ACT. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) STATING THAT THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI OF RS. 26,22,570/ - WA S REMITTED BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME U/S. 139(1) OF THE ACT AND THEREFORE, THE SAME SHOULD NOT HAVE BEEN DISALLOWED U/S. 36(1)(VA) OF THE ACT. THE LD. CIT(A) HOWEVER, OBSERVED THAT THOUGH THERE ARE SOME DECISIONS IN FAVOUR OF T HE ASSESSEE, THERE WERE DECISIONS IN FAVOUR OF THE REVENUE AS WELL. HE FURTHER OBSERVED THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD REPORTED IN (2009) 319 ITR 306 (SC) WAS IN THE CONTEXT OF SECTION 43B OF THE ACT AND THE EMPLOYERS CONTRIBUTION TO PROVIDENT FUND AND ESI. THE LD. CIT(A) RELIED UPON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF UNIFAC MANAGEMENT SERVICES (INDIA) (P.) LTD VS. DCIT REPORTED IN [2018] 409 ITR 225 (MADRAS) TO HOLD THE ISSUE AGAINST THE ASSESSEE AND HE ACCORDINGLY BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL: - 1. YOUR APPELLANT SUBMITS THAT THE CIT(A) ERRED IN LAW IN CONFIRMING THE ADDITION MAD E U/S. 36(1)(VA) OF THE INCOME TAX ACT, 1961 IGNORING THE SUBMISSIONS MADE BY YOUR APPELLANT IN RESPONSE TO THE PROPOSED ADJUSTMENT NOTICE. 2. YOUR APPELLANT SUBMITS THAT THE LD. CIT(A) AS WELL AS CPC OUGHT TO HAVE CONSIDERED THE REPLY FILED BY YOUR APPELL ANT AND OUGHT NOT TO 3 HAVE MADE THE ADDITION OF RS. 26,22,570/ - BEING EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI U/S. 36(1)(VA) OF THE INCOME TAX ACT, 1961 IGNORING THE FACT THAT IS OTHERWISE ALLOWABLE U/S. 43B OF THE ACT. 3. YOUR APPELLANT SUBMITS THAT LD. CIT(A) HAS PROVIDED ONLY ONE OPPORTUNITY OF HEARING AND OUGHT TO HAVE PROVIDED ANOTHER OPPORTUNITY OF HEARING TO THE APPELLANT. 4. YOUR APPELLANT SUBMITS THAT LD. CIT(A) AS WELL AS THE CPC OUGHT TO HAVE APPRECIATED THE FACT THAT THE ENTIRE AMOUNT OF RS. 26,22,570/ - WAS PAID WITHIN THE FINANCIAL YEAR OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. HENCE, THE SAME SHOULD BE ALLOWED AS A DEDUCTION. 5. YOUR APPELLANT SUBMITS THAT CIT(A) AS WELL AS THE CPC ERRED IN NOT TREATING THE EXPEN DITURE AS ALLOWABLE U/S. 37(1) OF THE INCOME TAX ACT, 1961, AS THE PAYMENT OF EMPLOYEES AND EMPLOYERS CONTRIBUTION TO PF AND ESI WAS INCURRED IN THE COURSE OF BUSINESS AND FOR THE PURPOSES OF BUSINESS. 6. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACT T HAT IN CASE OF CONFLICTING JUDGMENTS BY THE HIGH COURTS, THE VIEW FAVOURABLE TO THE APPELLANT HAS TO BE CONSIDERED. 7. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING YOUR APPELLANT PRAYS THAT THE HONBLE MEMBERS MAY DELETE THE AD DITION OF RS. 26,22,570/ - . 4. LEARNED COUNSEL FOR THE ASSESSEE SHRI M.V. ANIL KUMAR PLACED RELIANCE UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD (SUPRA) AND SUBMITTED THAT VARIOUS BENCHES OF THE TRIBUNAL IN A NUMBER OF CASES HAVE HELD THAT THE SAID DECISION IS APPLICABLE TO THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI AS WELL. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE LD. CIT(A) AND THE DECISIONS RELIED UPON BY HIM. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL AVAILABLE ON RECORD, I FIND THAT THERE IS NO DECISION OF THE HONBLE JURISDICTIONAL 4 HIGH COURT ON THIS ISSUE AND OUT OF DECISIONS OF THIRTEEN HIGH COURTS, THE DECISIONS OF T EN HIGH COURTS ARE IN FAVOU R OF THE ASSESSEE WHILE THE DECISIONS OF T HREE HIGH COURTS ARE AGAINST THE ASSESSEE. IN SOME OF THE OTHER HIGH COURTS, THE ISSUE HAS BEEN DECIDED BOTH AGAINST THE ASSESSEE AS WELL AS IN FAVOUR OF THE ASSESSEE AND THEREFORE, THIS IS A DEBATABLE ISSUE AT PR ESENT. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. M/S. VEGETABLE PRODUCTS LTD REPORTED IN 88 ITR 192 (SC) HAS HELD THAT IF THERE ARE TWO VIEWS POSSIBLE ON THE SAME ISSUE, THE ONE WHICH IS IN FAVOUR OF THE ASSESSEE SHOULD BE AD OPTED. FURTHER, THE HO NBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GODAVARI SARAF REPORTED IN [1978] 113 ITR 589 (BOM.) HAS HELD THAT IF THERE IS NO DECISION OF THE JURISDICTIONAL HIGH COURT THEN, THE DECISION OF THE NON - JURISDICTIONAL HIGH COURT IS ALS O BINDING. THEREFORE, CONSIDERING THE ABOVE , I H O LD THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD (SUPRA) IS APPLICABLE TO BOTH THE EMPLOYER AS WELL AS EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESI AND IF TH E ASSESSEE HAS NOT REMITTED THE AMOUNT COLLECTED FROM THE EMPLOYEES BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S. 139(1) OF THE ACT, THEN THE SAME HAS TO BE DISALLOWED AND BROUGHT TO TAX. WITH THESE DIRECTIONS, THE APPEAL OF THE ASSESSEE IS ALLOW ED AND THE A.O. IS FURTHER DIRECTED TO RECONSIDER THE ISSUE , IF THE CONTRARY VIEW IS UPHELD BY THE 5 APEX COURT IN THE APPEALS BEFORE THE HONBLE SUPREME COURT ON THIS ISSUE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 02 ND FEBRUARY , 2021. SD/ - (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED: 02 ND FEBRUARY , 2021 OKK COPY TO: - 1) SHISHIR KUMAR DAS C/O. M. ANANDAM & CO., CHARTERED ACCOUNTANTS, FLAT NO. 7A, SURYA TOWERS, S.P. ROAD, SECUNDERABAD. 2) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 10(1), HYDERABAD. 3) THE CIT(A) - 6 , HYDERABAD 4) THE PR. CIT - 6 , HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE