HIGH VOLT ELECRICALS P.LTD, MUMBAI V. ITO WD W, PALGHAR

ITA 3813/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9895 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2013-2014
• Appeal Filed On: 25-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIRAG SHAH
• Section: 43B; 143(3); 139

Judgement Text

ITA NO. 3813/MUM/2017 M/S HIGH VOLT ELECTRICALS PVT. LTD. VS. ACIT 1 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, M UMBAI BEFORE SHRI MANOJ KUMAR AGGARWAL ,AM AND SHRI RAVISH SOOD , JM ITA NO (S) . 3813 /MUM/201 7 ( / ASSESSMENT YEAR: 20 13 - 14 ) M/S HIGH VOLT ELECTRICALS PVT. LTD., A - 102, INDER DARSHAN CHSL, NEXT TO JAIN TEMPLE, JAMBLI GULLY, BORIVALI (W), MUMBAI - 92. / VS. ACIT, PALGHAR CIRCLE , WARD (2), PALGHAR BIDCO ROAD, PALGHAR 401 504. ./ ./ PAN NO. AABCH7678H ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : S HRI. VIRAG SHAH, A.R. / RESPONDENT BY : SH RI . MANOJ KUMAR SINGH, D.R. / DATE OF HEARING : 18.09.2018 / DATE OF PRONOUNCEMENT : 26 . 0 9 .201 8 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE ASSESSEE FOR A.Y . 2013 - 14 IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMIS SIONER OF INCOME TAX (APPEALS) - 3 , THANE , DATED 25.04.2017 , WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) OF THE INCOME - TAX ACT, 1961 ITA NO. 3813/MUM/2017 M/S HIGH VOLT ELECTRICALS PVT. LTD. VS. ACIT 2 (FOR SHORT ACT), DATED 29.02.2016 . THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HA S RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: - 1. EMPLOYEES CONTRIBUTION TO PROVIDENT FUND OF RS. 6,30,867/ - A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS. 6,30,867/ - PAYMENT M ADE TOWARDS EMPLOYEE CONTRIBUTION TO PROVIDENT FUND AFTER SPECIFIC DUE DATE . 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND REPAIR OF ELECTRICAL TRANSFORMERS HAD FILE D ITS RETURN OF INCOME FOR A.Y. 2013 - 14 O N 27.08.2013, DECLARING TOTAL INCOME AT RS. 2,23,68,227/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2). 3. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS , IT WAS OBSERVED BY THE A.O , THAT THE ASSESSEE HAD DEPOSITED AN AMOUNT AGGREGATING TO RS. 6,30,867/ - TOWARDS EMPLOYEES CONTRIBUTION TO PROVIDENT FUND , BEYOND THE STIPULATED DATE CONTEMPLATED UNDER THE PROVIDENT FUND A CT. THE ASSESSEE RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. ( 2009 ) 319 ITR 306 (SC), SUBMITTED BEFORE THE A.O , THAT AS THE RESPECTIVE PAYMENTS WERE MADE BEFORE THE DUE DATE APPLICABLE IN ITS CASE FO R FURNISHING THE RETURN OF INCOME UNDER SUB - SEC TION (1) OF SEC. 139 FOR THE YEAR UNDER CONSIDERATION IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED, THUS , AS PER THE POST AMENDED SEC. 43B OF THE ACT, NO DISALLOWANCE OF THE AFORESAID AMOUNT WAS CALLE D FOR IN ITS HANDS. HOWEVER, THE A.O WAS NOT PERSUADED TO SUBSCRIBE TO THE AFORESAID CLAIM OF THE ASSESSEE. THE A.O HELD A CONVICTION T HAT AS THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF ALOM EXTRUSIONS LTD. (SUPRA) WAS RENDERED IN CONTEXT OF SEC. 43B OF THE ACT, THUS THE SAME WOULD HAVE NO BEARING AS REGARDS THE DISALLOWANCE OF THE AFORESAID AMOUNT UNDER SEC. ITA NO. 3813/MUM/2017 M/S HIGH VOLT ELECTRICALS PVT. LTD. VS. ACIT 3 36(1)(VA) R.W. SEC. 2(24)(X) OF THE ACT. IN ORDER TO FORTIFY HIS AFORESAID VIEW, THE A.O RELIED ON THE CBDT CIRCULAR NO. 22/2015, DATED 17.12.2015. ON THE BASIS OF HIS AFORESAID DELIBERATIONS, THE A.O INTER ALIA DISALLOWED THE AMOUNT OF RS. 6,30,867/ - UNDER SEC. 36(1)(VA) R.W.S. 2(24)(X) OF THE ACT. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING ON THE CONTENTIONS ADVANCED BY THE ASSESSEE BEFORE HIM, WAS HOWEVER, NOT PERSUADED TO ACCEPT THE SAME AND SUSTAINED THE AFORESAID DISALLOWANCE . 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATT ER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE SHRI. VIRAG SHAH SUBMITTED , THAT AS THE ASSESSEE HAD DEPOSITED THE AMOUNT OF THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND , BEFORE THE DUE DATE CONTEMPLA TED UNDER SEC. 139(1) FOR FILING OF ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y 2013 - 14 , THUS , NO DISALLOWANCE WAS CALLED FOR IN ITS HANDS. THE LD. A.R IN ORDER TO BUTTRESS HIS CLAIM THAT THE AFORESAID PAYMENTS WERE MADE BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2013 - 14 , FURNISHED A CHART WHICH READS AS UNDER : - MONTH EMPLOYERS SHARE EMPLOYEES SHARE P.F. ADMN CHARGES TOTAL DUE DATE OF PAYMENT (INCLUSIVE OF 5 DAYS GRACE PERIOD) ACTUAL DATE OF PAYMENT AUDITORS REMARKS APR - 12 48,590.00 47,255.00 4,358.00 1,00,173.00 20 - MAY - 12 28 - AUG - 12 DELAY MAY - 12 55,916.00 54,326.00 5,012.00 1,15,254.00 20 - JUN - 12 28 - AUG - 12 DELAY JUN - 12 54,026.00 52,450.00 4,840.00 1,11,316.00 20 - JUL - 12 10 - SEP - 12 DELAY JUL - 12 56,570.00 54,983.00 5,073.00 1,16,626.00 20 - AUG - 12 10 - SEP - 12 DELAY AUG - 12 56,839.00 55,205.00 5,094.00 1,17,138.00 20 - SEP - 12 08 - NOV - 12 DELAY SEP - 12 58,413.00 56,788.00 5,238.00 1,20,439.00 20 - OCT - 12 08 - NOV - 12 DELAY OCT - 12 63,248.00 61,562.00 5,677.00 1,30,487.00 20 - NOV - 12 10 - JAN - 13 DELAY ITA NO. 3813/MUM/2017 M/S HIGH VOLT ELECTRICALS PVT. LTD. VS. ACIT 4 NOV - 12 60,484.00 58,777.00 5,424.00 1,24,685.00 20 - DEC - 12 10 - JAN - 13 DELAY DEC - 12 64,620.00 62,880.00 5,799.00 1,33,299.00 20 - JAN - 13 16 - MAR - 13 DELAY JAN - 13 65,079.00 63,362.00 5,843.00 1,34,284.00 20 - FEB - 13 16 - MAR - 13 DELAY FEB - 13 60,730.00 58,996.00 5,444.00 1,25,170.00 20 - MAR - 13 16 - MAR - 13 NON - DELAY MAR - 13 65,077.00 63,309.00 5,840.00 1,34,226.00 20 - APR - 13 21 - MAY - 13 DELAY TOTAL 7,09,592.00 6,89,863.00 63,642.00 14,63,097.00 IT WAS THE CONTENTION OF THE LD. A.R THAT THE LOWER AUTHORITIES HAD ERRED IN OBSERVING THAT THE PROVISIONS OF SEC. 43B WERE APPLICABLE ONLY IN RESPECT OF THE EMPLOYERS CONTRIBUTION TO PROVIDENT FUND, AND WOULD NOT TAKE WITHIN ITS SWEEP THE DEDUCTION RELATI NG TO THE EMPLOYEES CONTRIB UTION TO THE SAID WELFARE FUND, WHICH AS PER THEM WOULD FALL WITHIN THE REALM OF SEC. 36(1)(VA) OF THE ACT. IT WAS SUBMITTED BY THE LD. A.R THAT THE ISSUE UNDER CONSIDERATION WAS NO LONGER RES INTEGRA AND IS SETTLED BY THE JUDGME NT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT CENTRAL, PUNE VS. GHATGE PATIL TRANSPORTS LTD. (ITA NO. 1002 & 1034 OF 2012; DATED 14.10.2014) (BOM). IT WAS SUBMITTED BY THE LD. A.R THAT THE HONBLE HIGH COURT OF BOMBAY IN THE AFOREMENTIONED CASE HAD OBSERVED THAT THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ALOM EXTRUSION LTD. (SUPRA) , RENDERED IN CONTEXT OF THE AMENDMENT TO SEC. 43B , WOULD BE APPLICABLE TO EMPLOYEES CONTRIBUTION AS WELL AS EMPLOYERS CONTRIBUTION. IT WAS SUBMITTED BY THE LD. A.R , THAT AS THE OBSERVATIONS OF THE LOWER AUTHORITIES THAT THE POST AMENDED SEC. 43B WOULD NOT BE APPLICABLE TO THE EMPLOYEES CONTRIBUTION TO PROVIDE NT FUND, WERE NOT IN CONFORMITY WITH THE AFORESAID JUDGMENT OF THE HONBLE HIGH COURT OF JURISDICT ION, THUS , THE SAME COULD NOT BE SUSTAINED AND WERE LIABLE TO BE VACATED. 6. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER S OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES , PERUSED THE ORDER S OF THE LOWER AUTHORITIES AND THE MATERIAL ITA NO. 3813/MUM/2017 M/S HIGH VOLT ELECTRICALS PVT. LTD. VS. ACIT 5 AVAILABLE ON RECORD. WE FIND THAT OUR INDULGENCE IN THE PRESENT APPEAL HAS BEEN SOUGHT BY THE ASSESSEE , FOR ADJUDICATING , AS TO WHETHER IN THE BACKDROP OF THE POST - AMENDED SEC. 43B OF THE ACT, THE LOWER AUTHORITIES WERE JUSTIFIED IN DISALLOWING THE AMOUNT OF THE EMPLOYEES CONTRIBUTION TO PROVIDENT FUND THAT WAS DEPOSITED BY THE ASSESSEE BEYOND THE STIPULATED PERIOD CONTEMPLATED UNDER THE PROVIDENT FUND ACT, BUT BEFOR E THE DUE DATE OF FILING OF ITS RETURN OF INCOME UNDER SEC. 139(1) OF THE ACT . WE FIND THAT IT IS AN ADMITTED FACT , THAT THOUGH THE ASSESSEE HAD DEPOSITED THE EMPLOYEE S CONTRIBUTION TO PROVIDENT FUND BEYOND THE TIME PERIOD ALLOWED UNDER THE PF ACT, HOWEV ER , THE SAID AMOUNTS WERE PAID BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME BY THE ASSESSEE UNDER SEC. 139(1) OF THE ACT. WE ARE UNABLE TO ACCEPT THE OBSERVATIONS OF THE LOWER AUTHORITIES , THAT THE PROVISIONS OF SEC. 43B WOULD NOT BE APPLICABLE AS REGARDS THE E MPLOYEES CONTRIBUTION TO PROVIDENT FUND, AND THE SAME WOULD CONTINUE TO BE GOVERNED BY SEC. 36(1)(VA) R.W.S. 2(24)(X) OF THE ACT. WE FIND THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT CENTRAL, PUNE VS. GHATGE PATIL TRANSPORTS LTD. (ITA NO. 1002 & 1034 OF 2012; DATED 14.10.2014) (BOM). THE HONBLE HIGH COURT IN ITS AFORESAID ORDER HAD CLEARLY OBSERVED THAT BOTH EMPLOYEES AND EMPLOYERS CONTRIBUTION WOULD BE COVERED UNDER THE AMENDMENT TO SEC. 43B OF THE ACT AND THE ALOM EXTRUSIONS (SUPRA) JUDGMENT. WE THUS, ARE OF THE CONSIDERED VIEW THAT THE DISALLOWANCE OF RS. 6,30,867/ - UPHELD BY THE CIT(A), NOT BEING IN CONFORMITY WITH THE AFORESAID JUDGMENT OF T HE HONBLE HIGH COURT CANNOT BE SUSTAINED AND IS HEREBY VACATED . 8. THE DISALLOWANCE OF RS. 6,30,867/ - IS DELETED, AND THE ORDER OF THE CIT(A) TO THE EXTENT SUSTAINING THE SAID DISALLOWANCE IS SET ASIDE. 9 . THE APPEAL OF THE ASSESSEE IS ALLOWED . ITA NO. 3813/MUM/2017 M/S HIGH VOLT ELECTRICALS PVT. LTD. VS. ACIT 6 ORDER PRO NOUNCED IN THE OPEN COURT ON 26 / 0 9 /201 8 SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 26 . 0 9 .201 8 PS. ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI