Equipment Fabricators, Bengaluru V. Deputy Commissioner Of Income Tax, CPC, Bangalore

ITA 386/BANG/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2804 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 13-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Period of limitation; Question of law; Reasonable cause; Condonation of delay
• Section: 43B; 234B; 143(1); 192; 139(1); 43; 13; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER IT A NO. 386/BANG/2021 ASSESSMENT YEAR: 2018 - 19 EQUIPMENT FABRICATORS, F-10, WHITEFIELD-HOSAKOTE ROAD, KANAMANGALA POST, BENGALURU 560 037. PAN: AAAFE 4613P VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL PROCESSING CENTRE (CPC), P.B. NO.1, ELECTRONICS CITY P.O., BENGALURU 560 100. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI SANKAR GANESH K. JT.CI T(DR)(ITAT), B ENGALURU. DATE OF HEARING : 21 . 1 0 .202 1 DATE OF PRONOUNCEMENT : 21 . 1 0 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER CIT(APPEALS), NATIONAL FACELESS APPEAL CENTRE [NFAC ], DELHI DATED 30.7.2021. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS :- LEGAL GROUNDS: 1. THE ORDER DATED 30 JUNE 2021 PASSED BY THE COMMI SSIONER OF INCOME-TAX (APPEALS), NATIONAL FACELESS APPEAL C ENTRE IS BAD AND ERRONEOUS AND AGAINST THE FACTS AND CIRCUMSTANC ES OF THE CASE IN SO FAR AS IT IS AGAINST THE APPELLANT; ITA NO.386/BANG/2021 PAGE 2 OF 16 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN NOT CONDONING THE DELAY WITHOUT APPRECIATING THAT THE D ELAY WAS NOT DELIBERATE AND WAS SOLELY DUE TO THE REASON THAT TH E ACCOUNTANT RESPONSIBLE FOR FILING THE APPEAL HAD NOT FILED THE APPEAL AND THEREAFTER LEFT THE ORGANIZATION DURING WHICH TIME THE NATION WAS GOING THROUGH THE PANDEMIC. 3. THE LD AO ERRED IN SUMMARILY DISMISSING THE APPE AL WITHOUT PROVIDING AN EFFECTIVE OPPORTUNITY OF HEARI NG TO THE APPELLANT. 4. THE LD CIT (A) HAS WHILE DISPOSING THE CONDONATI ON APPLICATION FILED BY THE APPELLANT ERRED IN DISMISS ING THE APPEAL WITHOUT APPRECIATING THE FACTS OF THE CASE. 5. THE LD CIT (A) ERRED IN NOT APPRECIATING THAT A LENIENT VIEW OUGHT TO HAVE BEEN TAKEN WHEN MAJOR PART OF TH E DELAY WAS ATTRIBUTABLE TO THE COVID-19 PANDEMIC. GROUND ON MERITS: 6. THE LD CIT(A) AND THE LD AO ERRED IN DETERMINING THE TOTAL INCOME OF THE APPELLANT FOR AY 2018-19 AT RS. 66,68,662/- AGAINST THE RETURNED INCOME OF RS.54,95,175/-. 7. THE LD CIT(A) WHILE DISMISSING THE APPEAL ON TEC HNICAL GROUNDS, ERRED IN UPHOLDING THE ADDITION OF RS, 11, 73,481/- MADE BY THE LD AO TOWARDS DISALLOWANCE OF PF AND ESI CON TRIBUTION OF EMPLOYEES PAID BEYOND THE DUE DATE UNDER SECTION 36(1)(VA) READ WITH SECTION 43B OF THE ACT. 8. THE LD CIT (A) AND THE LD AO HAVE ERRED IN MAKIN G THE ADDITION DESPITE THE FACT THAT THE APPELLANT HAD MA DE THE REMITTANCES TOWARDS PF AND ESI CONTRIBUTION OF EMPL OYEES BEFORE THE DUE DATE OF FILING RETURN UNDER SECTION 139(1) OF THE ACT, WHICH FACT HAS NOT BEEN DISPUTED BY THE LD CIT (A) OR LD AO. 9. THE LD CIT(A) AND THE LD AO ERRED IN NOT APPRECI ATING THAT THE ISSUE WAS COVERED BY THE DECISIONS OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V SHABARI E NTERPRISES (2008) 298 ITR 141 (KAR), CIT V SPECTRUM CONSULTANT S INDIA PVT ITA NO.386/BANG/2021 PAGE 3 OF 16 LTD (WA NO.4077/2013), ESSAE TERAOKA PVT LTD V DCIT (ITA NO.480/2013); INTEREST UNDER SECTION 234A: 10. THE LD AO ERRED IN LEVYING INTEREST OF RS.16,00 3/- UNDER SECTION 23A OF THE ACT, THE LD CIT(A) ERRED IN CONF IRMING THE SAME. 11. THE LD CIT (A) AND LD AO ERRED IN NOT APPRECIAT ING THAT THE DUE DATE FOR FILING RETURN FOR AY 2018-19 IN AU DIT CASES WAS EXTENDED TO 31 OCTOBER 2018 AND THE APPELLANT HAD F ILED THE RETURN OF INCOME ON 31 OCTOBER 2018, HENCE INTEREST UNDER SECTION 234A WAS NOT LEVIABLE. INTEREST UNDER SECTION 234B AND 234C: 12. THE LD. AO ERRED IN LEVYING INTEREST UNDER SECT ION 234B AND 234C OF THE ACT. EACH ONE OF THE ABOVE GROUNDS IS WITHOUT PREJUDICE TO THE OTHER AND WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL TAKE N EARLIER. THE APPELLANT RESERVES THE RIGHT TO FURTHER ADD, AL TER OR AMEND EACH ONE OF THE ABOVE GROUNDS OF APPEAL. 3. THE ASSESSEE IS IN THE BUSINESS OF ALLOY STEEL F ABRICATION & DESIGN, ALLOY FABRICATION AND SKID MOUNTED PROCESS SYSTEMS. IT FILED RETURN OF INCOME U/S. 139(1) OF THE INCOME-TAX ACT, 1961 [THE ACT] ON 31.10.2018 DECLARING TOTAL INCOME OF RS.54,95,175. IN THE INT IMATION U/S. 143(1) AN ADDITION OF RS.11,78,481 WAS MADE BY THE AO ON ACCO UNT OF DELAY OF DEPOSIT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDEN T FUND AND ESIC. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING. WE PROCEED TO DISPOSE OF THE APPEAL AFTER PERUSING THE MATERIAL ON RECORD AND AFTER HEARING THE LD. DR. 4. IN APPEAL BEFORE THE CIT(APPEALS), THERE WAS A DELAY OF 508 DAYS AND THE CIT(APPEALS) REJECTED CONDONATION OF DELAY IN FILING THE APPEAL ITA NO.386/BANG/2021 PAGE 4 OF 16 HOLDING THAT NO COGENT REASONS WERE GIVEN BY THE AS SESSEE FOR THE INORDINATE DELAY OF 508 DAYS AND DISMISSED THE APPE AL. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. THERE WAS A DELAY OF 508 DAYS IN FILING THE APPEAL BEFORE THE CIT(APPEALS), NFAC. THEREFORE, WE HAVE TO CONSIDER WHETHER THE AC COUNTANT/AUDITOR /COUNSELS FAILURE IS SUFFICIENT CAUSE FOR CONDONIN G THE DELAY. 6. THE MADRAS HIGH COURT CONSIDERED AN IDENTICAL IS SUE IN THE CASE OF SREENIVAS CHARITABLE TRUST V. DY. CIT (280 ITR 357) AND HELD THAT MIXING UP OF PAPERS WITH OTHER PAPERS ARE SUFFICIENT CAUSE FOR NOT FILING THE APPEAL IN TIME. THE MADRAS HIGH COURT FURTHER OBSERVED THA T THE EXPRESSION SUFFICIENT CAUSE SHOULD BE INTERPRETED TO ADVANCE SUBSTANTIAL JUSTICE. THEREFORE, ADVANCEMENT OF SUBSTANTIAL JUSTICE IS TH E PRIME FACTOR WHILE CONSIDERING THE REASONS FOR CONDONING THE DELAY. 7. ON MERITS, THE ISSUE IS IN FAVOUR OF THE ASSESSE E. BUT THERE IS A TECHNICAL DEFECT IN THE APPEAL SINCE THE APPEAL WAS NOT FILED WITHIN THE PERIOD OF LIMITATION. THE ASSESSEE FILED AN AFFIDAV IT BEFORE THE CIT(A) SAYING THAT THE APPEAL WAS NOT FILED BECAUSE OF THE ACCOUN TANTS INABILITY TO FILE THE APPEAL. THE REVENUE HAS NOT FILED ANY COUNTER-AFFID AVIT TO DENY THE ALLEGATION MADE BY THE ASSESSEE. WHILE CONSIDERING A SIMILAR ISSUE THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION V. MST. KATIJI AND ORS. (167 ITR 471) LAID DOWN SIX PRINCIPLES. FOR THE PURPOSE OF CONVE NIENCE, THE PRINCIPLES LAID DOWN BY THE APEX COURT ARE REPRODUC ED HEREUNDER:- (1) ORDINARILY, A LITIGANT DOES NOT STAND TO BENEF IT BY LODGING AN APPEAL LATE. (2) REFUSING TO CONDONE DELAY CAN RESULT IN A MERI TORIOUS MATTER BEING THROWN AT THE VERY THRESHOLD AND CAUSE OF JUS TICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS COND ONED, THE ITA NO.386/BANG/2021 PAGE 5 OF 16 HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DE CIDED ON MERITS AFTER HEARING THE PARTIES. (3) EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOU RS DELAY, EVERY SECONDS DELAY? THE DOCTRINE MUST BE A PPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. (4) WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDE RATION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE O F A NON- DELIBERATE DELAY. (5) THERE IS NO PRESUMPTION THAT DELAY IS OCCASION ED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT, HE RUNS A SERIOUS RISK . (6) IT MUST BE GRASPED THAT THE JUDICIARY IS RESPE CTED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE ON TECHN ICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUS TICE AND IS EXPECTED TO DO SO. 8. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTIC E DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT FOR INJUSTICE BEING DONE BECAUSE OF NONDELIBERATE DELAY. IN THE CASE ON OUR HAND, THE ISSUE ON MERITS REGARDING ALLOWABILITY OF DEDUCTION U/S. 36(1)(VA) R.W.S. 43B OF THE ACT WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL. MOREOVER, NO COUNTER-AFFIDAVIT WAS FILED BY THE REVENUE DENYING THE ALLEGATION MADE BY THE ASSESSEE. IT IS NOT THE CASE OF THE REVENUE THAT THE APPEAL WAS NOT FILED DELIBERATELY. THEREFORE, W E HAVE TO PREFER SUBSTANTIAL JUSTICE RATHER THAN TECHNICALITY IN DEC IDING THE ISSUE. AS OBSERVED BY APEX COURT, IF THE APPLICATION OF THE A SSESSEE FOR CONDONING THE DELAY IS REJECTED, IT WOULD AMOUNT TO LEGALISE INJUSTICE ON TECHNICAL GROUND WHEN THE TRIBUNAL IS CAPABLE OF REMOVING INJ USTICE AND TO DO JUSTICE. ITA NO.386/BANG/2021 PAGE 6 OF 16 9. THEREFORE, THIS TRIBUNAL IS BOUND TO REMOVE THE INJUSTICE BY CONDONING THE DELAY ON TECHNICALITIES. IF THE DELAY IS NOT CONDONED, IT WOULD AMOUNT TO LEGALISING AN ILLEGAL ORDER WHICH WOULD R ESULT IN UNJUST ENRICHMENT ON THE PART OF THE STATE BY RETAINING THE TAX RELAT ABLE THERETO. UNDER THE SCHEME OF CONSTITUTION, THE GOVERNMENT CANNOT RETAI N EVEN A SINGLE PIE OF THE INDIVIDUAL CITIZEN AS TAX, WHEN IT IS NOT AUTHO RISED BY AN AUTHORITY OF LAW. THEREFORE, IF WE REFUSE TO CONDONE THE DELAY, THAT WOULD AMOUNT TO LEGALISE AN ILLEGAL AND UNCONSTITUTIONAL ORDER PASSED BY THE LOWER AUTHORITY. THEREFORE, IN OUR OPINION, BY PREFERRING THE SUBSTA NTIAL JUSTICE, THE DELAY OF 508 DAYS HAS TO BE CONDONED. 10. THE NEXT QUESTION MAY ARISE WHETHER 508 DAYS WA S EXCESSIVE OR INORDINATE. THERE IS NO QUESTION OF ANY EXCESSIVE O R INORDINATE WHEN THE REASON STATED BY THE ASSESSEE WAS A REASONABLE CAUS E FOR NOT FILING THE APPEAL. WE HAVE TO SEE THE CAUSE FOR THE DELAY. WHE N THERE WAS A REASONABLE CAUSE, THE PERIOD OF DELAY MAY NOT BE RE LEVANT FACTOR. 11. IN FACT, THE MADRAS HIGH COURT IN THE CASE OF CIT V. K.S.P. SHANMUGAVEL NADAI AND ORS. (153 ITR 596) CONSIDERED THE DELAY OF CONDONATION AND HELD THAT THERE WAS SUFFICIENT AND REASONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION. ACCORDINGLY, THE MADRAS HIGH COURT COND ONED NEARLY 21 YEARS OF DELAY IN FILING THE APPEAL. 12. WHEN COMPARED TO 21 YEARS, 508 DAYS CANNOT BE C ONSIDERED TO BE INORDINATE OR EXCESSIVE. FURTHERMORE, THE CHENNAI T RIBUNAL BY MAJORITY OPINION IN THE CASE OF PEOPLE EDUCATION AND ECONOMIC DEVELOPMENT SOCIETY (PEEDS) V. ITO (100 ITD 87) (CHENNAI) (TM ) CONDONED MORE THAN SIX HUNDRED DAYS DELAY. IT IS PERTINENT TO MENTION HEREIN THAT THE VIEW TAKEN BY THE PRESENT AUTHOR IN THAT CASE WAS OVERRULED BY THE THIRD MEMBER. ITA NO.386/BANG/2021 PAGE 7 OF 16 13. THE MADRAS HIGH COURT IN THE CASE OF SREENIVAS CHARITABLE TRUST (SUPRA) HELD THAT NO HARD AND FAST RULE CAN BE LAID DOWN IN THE MATTER OF CONDONATION OF DELAY AND THE COURT SHOULD ADOPT A P RAGMATIC APPROACH AND THE COURT SHOULD EXERCISE THEIR DISCRETION ON T HE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PR IME IMPORTANCE AND THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBE RAL CONSTRUCTION. THEREFORE, THIS JUDGMENT OF THE MADRAS HIGH COURT ( SUPRA) CLEARLY SAYS THAT IN ORDER TO ADVANCE SUBSTANTIAL JUSTICE WHICH IS OF PRIME IMPORTANCE, THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBERAL CONSTRUCTION. 14. IN THIS CASE, THE ISSUE ON MERIT REGARDING GRAN TING OF DEDUCTION U/S. 36(1)(VA) R.W.S. 43B OF THE ACT IS COVERED IN FAVOU R OF THE ASSESSEE BY THE JUDGMENT OF THE MADRAS HIGH COURT. THEREFORE, FOR T HE PURPOSE OF ADVANCING SUBSTANTIAL JUSTICE WHICH IS OF PRIME IMP ORTANCE IN THE ADMINISTRATION OF JUSTICE, THE EXPRESSION SUFFICIE NT CAUSE SHOULD RECEIVE A LIBERAL CONSTRUCTION. IN OUR OPINION, THE ABOVE JUD GMENT IS ALSO SQUARELY APPLICABLE TO THE FACTS OF THIS CASE. A SIMILAR VIE W WAS TAKEN BY THE MADRAS HIGH COURT IN THE CASE OF VENKATADRI TRADERS LTD. V. CIT (2001) 168 CTR (MAD) 81 : (2001) 118 TAXMAN 622 (MAD) . 15. THE MUMBAI BENCH OF THIS TRIBUNAL IN THE CASE O F BAJAJ HINDUSTHAN LTD. V. JT. CIT (AT) (277 ITR 1) HAS CONDONED THE DELAY OF 180 DAYS WHEN THE APPEAL WAS FILED AFTER THE PRONOUNCEMENT OF THE JUDGMENT OF THE APEX COURT. FURTHERMORE, THE REVENUE HAS NOT FILED ANY C OUNTER-AFFIDAVIT OPPOSING THE APPLICATION OF THE ASSESSEE FOR CONDON ATION OF DELAY. THE APEX COURT IN THE CASE OF MRS. SANDHYA RANI SARKAR VS. SMT. SUDHA RANI DEBI (AIR 1978 SC 537) HELD THAT NON-FILING OF AFFIDAVIT IN OPPOSITION TO AN APPLICATION FOR CONDONATION OF DELAY MAY BE A SUFFI CIENT CAUSE FOR CONDONATION OF DELAY. IN THIS CASE, THE REVENUE HAS NOT FILED ANY COUNTER- AFFIDAVIT OPPOSING THE APPLICATION OF THE ASSESSEE, THEREFORE, AS HELD BY THE ITA NO.386/BANG/2021 PAGE 8 OF 16 APEX COURT, THERE IS SUFFICIENT CAUSE FOR CONDONATI ON OF DELAY. THE SUPREME COURT OBSERVED THAT WHEN THE DELAY WAS OF S HORT DURATION, A LIBERAL VIEW SHOULD BE TAKEN. IT DOES NOT MEAN THAT WHEN THE DELAY WAS FOR LONGER PERIOD, THE DELAY SHOULD NOT BE CONDONED EVE N THOUGH THERE WAS SUFFICIENT CAUSE. THE APEX COURT DID NOT SAY THAT L ONGER PERIOD OF DELAY SHOULD NOT BE CONDONED. CONDONATION OF DELAY IS THE DISCRETION OF THE COURT/TRIBUNAL. 16. THEREFORE, IT WOULD DEPEND UPON THE FACTS OF EA CH CASE. IN OUR OPINION, WHEN THERE IS SUFFICIENT CAUSE FOR NOT FIL ING THE APPEAL WITHIN THE PERIOD OF LIMITATION, THE DELAY HAS TO BE CONDONED IRRESPECTIVE OF THE DURATION/PERIOD. IN THIS CASE, THE NON-FILING OF AN AFFIDAVIT BY THE REVENUE FOR OPPOSING THE CONDONATION OF DELAY ITSELF IS SUF FICIENT FOR CONDONING THE DELAY OF 508 DAYS. 17. IN CASE THE DELAY IS NOT CONDONED, IT WOULD AMO UNT TO LEGALISE AN ILLEGAL AND UNCONSTITUTIONAL ORDER. THE POWER GIVEN TO THE TRIBUNAL IS NOT TO LEGALISE AN INJUSTICE ON TECHNICAL GROUND BUT TO DO SUBSTANTIAL JUSTICE BY REMOVING THE INJUSTICE. THE PARLIAMENT CONFERRED PO WER ON THIS TRIBUNAL WITH THE INTENTION THAT THIS TRIBUNAL WOULD DELIVER JUSTICE RATHER THAN LEGALISE INJUSTICE ON TECHNICALITIES. 18. THEREFORE, WHEN THIS TRIBUNAL IS EMPOWERED AND CAPABLE OF REMOVING INJUSTICE, IN OUR OPINION, THE DELAY OF 50 8 DAYS HAS TO BE CONDONED AND THE APPEAL OF THE ASSESSEE HAS TO BE A DMITTED AND DISPOSED OF ON MERITS. IN VIEW OF THE ABOVE, WE CONDONE THE DELAY OF 508 DAYS IN FILING THE APPEAL AND ADMIT THE APPEAL FOR ADJUDICA TION. 19. COMING TO THE MERITS OF THE ISSUE, THE GRIEVANC E OF THE ASSESSEE IS DISALLOWANCE OF RS.11,78,481 BEING PF & ESI CONTRIB UTION OF EMPLOYEES PAID BEYOND THE DUE DATE U/S. 36(1)(VA) R.W.S. 43B OF THE ACT. IT WAS ITA NO.386/BANG/2021 PAGE 9 OF 16 DEPOSITED WITHIN THE DUE DATE OF FILING RETURN U/S. 139(1) OF THE ACT. THIS ISSUE CAME UP FOR CONSIDERATION BEFORE THIS TRIBUNA L IN THE CASE OF M/S. JANA URBAN SERVICES FOR TRANSFORMATION PVT. LTD. V. DCIT, ITA NO.308/BANG/2021 . THE TRIBUNAL VIDE ORDER DATED 11.10.2021 HELD AS UNDER:- 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE MADE CONTRIBUTION TO THE PF AS FOLLOWS:- ITA NO.386/BANG/2021 PAGE 10 OF 16 7. AS SEEN FROM THE ABOVE, THE ASSESSEE MADE A SUM OF RS.19,04,700/- BEYOND THE TIME PRESCRIBED UNDER THE RELEVANT ACT. NOW THE CLAIM OF ASSESSEE IS THAT THE ABOVE PA YMENT HAS BEEN MADE TOWARDS PF BEYOND DUE DATE PRESCRIBED UND ER THE RELEVANT ACT, HOWEVER, THE SAME WAS MADE WITHIN DUE DATE OF FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT F OR THE YEAR UNDER CONSIDERATION. AS SUCH THE SAID AMOUNT CANNOT BE DISALLOWED U/S 36(1)(VA) OF THE ACT AND IT IS NOT H IT BY EXPLANATION 2 TO SEC.36(1)(VA) OF THE ACT WHICH CAL LS FOR PAYMENT WITHIN THE DUE DATE PRESCRIBED UNDER THE RELEVANT A CT. FOR THIS PURPOSE HE RELIED ON THE JUDGMENT IN THE CASE OF ES SAC TERAOKA (P.) LTD. V. DY. CIT 366 ITR 408 (KAR.), WHEREIN IT HAS HELD AS UNDER: 15. FROM BARE PERUSAL OF THIS PROVISION, IT IS CLE AR THAT UNDER THE PROVISION, FOR IT ACT, AN EXTENSION IS GI VEN TO THE EMPLOYER TO MAKE PAYMENT OF CONTRIBUTION TO PROVIDENT FUND OR ANY OTHER FUND TILL THE 'DUE DATE ' APPLICABLE FOR FURNISHING THE RETURN OF INCOME UNDE R SUB- SECTION(1) OF SECTION 139 OF THE IT ACT IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SU M WAS INCURRED AND THE EVIDENCE OF SUCH PAYMENT IS FURNIS HED BY THE ASSESSEE ALONG WITH SUCH RETURN. IN SHORT, THIS PROVISION STATES, NOTWITHSTANDING ANYTHING CONTAINE D IN ANY OTHER PROVISION CONTAINED IN THIS ACT, A DEDUCT ION OTHERWISE ALLOWABLE IN THIS ACT IN RESPECT OF ANY S UM PAYABLE BY THE ASSESSEE AS AN EMPLOYER BY WAY OF CONTRIBUTION TO ANY FUND SUCH AS PROVIDENT FUND SHA LL BE ALLOWED IF IT IS PAID ON OR BEFORE THE DUE DATE AS CONTEMPLATED UNDER SECTION 139(1) OF THE IT ACT. TH IS PROVISION HAS NOTHING TO DO WITH THE CONSEQUENCES, PROVIDED FOR UNDER THE PF ACT/PF SCHEME/ESI ACT, FO R NOT DEPOSITING THE 'CONTRIBUTION' ON OR BEFORE THE DUE DATES THEREIN. 16. IN THE PRESENT CASE, ADMITTEDLY, THOUGH THE EMP LOYER DID NOT DEPOSIT THE CONTRIBUTION, WITHIN THE STIPUL ATED TIME, AS CONTEMPLATED BY PARAGRAPH-30 OF THE PF SCH EME OR BEFORE THE DUE DATE UNDER THE PROVISIONS OF THE PF SCHEME/ACT, HE DEPOSITED THE CONTRIBUTION TO THE PF /ESI FUND BEFORE THE DUE DATE CONTEMPLATED UNDER SECTION 139(1) OF THE ACT. ITA NO.386/BANG/2021 PAGE 11 OF 16 17. SECTION 6 OF THE PF ACT PROVIDES FOR CONTRIBUTI ONS AND MATTERS WHICH MAY BE PROVIDED FOR IN SCHEMES. PARAGRAPH-29 OF THE PF SCHEME STATES WHAT IS 'CONTRIBUTION'. THE EXPRESSION 'CONTRIBUTION' IS AL SO DEFINED UNDER THE PF ACT BY SECTION 2(C) OF THE PF ACT, WHICH MEANS A CONTRIBUTION PAYABLE IN RESPECT OF A MEMBER UNDER THE SCHEME OR THE CONTRIBUTION PAYABLE IN RESPECT OF AN EMPLOYEE TO WHOM THE INSURANCE SCHEME APPLIES. IF THIS DEFINITION IS READ WITH SUBPARA(1) OF PARAGRAPH-29 IN CHAPTER-V OF THE PF SCHEME, IT WOUL D MEAN THAT THE CONTRIBUTIONS PAYABLE BY THE EMPLOYER UNDER THE SCHEME SHALL BE AT A PARTICULAR RATE AND THE CONTRIBUTION PAYABLE BY THE ASSESSEE SHALL BE EQUAL TO THE CONTRIBUTION PAYABLE BY THE EMPLOYER. 18. PARAGRAPH-30 OF THE PF SCHEME PROVIDES FOR PAYM ENT OF CONTRIBUTIONS. SUB-PARA(1) OF PARAGRAPH30 STATES THAT THE EMPLOYER SHALL, IN THE FIRST INSTANCE, PAY BOTH THE CONTRIBUTION PAYABLE BY HIMSELF (IN THIS SCHEME REF ERRED TO AS THE EMPLOYER'S CONTRIBUTION) AND ALSO, ON BEH ALF OF THE MEMBER EMPLOYED BY HIM DIRECTLY OR BY OR THROUG H A CONTRACTOR, THE CONTRIBUTION PAYABLE BY SUCH MEMBER (IN THIS SCHEME REFERRED TO AS THE MEMBER'S CONTRIBUTIO N). 19. FROM BARE PERUSAL OF SUB-PARA(1) OF PARAGRAPH-3 0, IT IS CLEAR THAT THE WORD 'CONTRIBUTION' IS USED NOT ONLY TO MEAN CONTRIBUTION OF THE EMPLOYER BUT ALSO CONTRIBU TION TO BE MADE ON BEHALF OF THE MEMBER EMPLOYED BY THE EMPLOYER DIRECTLY. 2O. PARAGRAPH-38 OF THE PF SCHEME PROVIDES FOR MODE OF PAYMENT OF CONTRIBUTIONS. AS PROVIDED IN SUBPARA(1) , THE EMPLOYER SHALL, BEFORE PAYING THE MEMBER, HIS WAGES , DEDUCT HIS CONTRIBUTION FROM HIS WAGES AND DEPOSIT THE SAME TOGETHER WITH HIS OWN CONTRIBUTION AND OTHER CHARGES AS STIPULATED THEREIN WITH THE PROVIDENT FU ND OR THE FUND UNDER THE ESI ACT WITHIN FIFTEEN DAYS OF T HE CLOSURE OF EVERY MONTH PAY. IT IS CLEAR THAT THE WO RD 'CONTRIBUTION' USED IN CLAUSE(B) OF SECTION 43B OF THE IT ACT BEANS THE CONTRIBUTION OF THE EMPLOYER AND THE EMPLOYEE. THAT BEING SO, IF THE CONTRIBUTION IS MAD E ON OR BEFORE THE DUE DATE FOR FURNISHING THE RETURN OF IN COME UNDER SUBSECTION(1) OF SECTION 139 OF THE IT ACT IS MADE, THE EMPLOYER IS ENTITLED FOR DEDUCTION. ITA NO.386/BANG/2021 PAGE 12 OF 16 21. THE SUBMISSION OF MR. ARAVIND, LEARNED COUNSEL FOR THE REVENUE THAT IF THE EMPLOYER FAILS TO DEDUCT THE EM PLOYEES CONTRIBUTION ON OR BEFORE THE DUE DATE, CONTEMPLATE D UNDER THE PROVISIONS OF THE PF ACT AND THE PF SCHEM E, THAT WOULD HAVE TO BE TREATED AS INCOME WITHIN THE MEANING OF SECTION 2(24)(X) OF THE IT ACT AND IN WH ICH CASE, THE ASSESSEE IS LIABLE TO PAY TAX ON THE SAID AMOUNT TREATING THAT AS HIS INCOME, DESERVES TO BE REJECTE D. 22. WITH RESPECT, WE FIND IT DIFFICULT TO ENDORSE T HE VIEW TAKEN BY THE GUJARAT HIGH COURT. WE AGREE WITH THE VIEW TAKEN BY THIS COURT IN W.A.NO.407712013. 23. IN THE RESULT, THE APPEAL IS ALLOWED AND THE SU BSTANTIAL QUESTION OF LAW FRAMED BY US IS ANSWERED IN FAVOUR OF THE APPELLANT-ASSESSEE AND AGAINST THE RESPONDENT-REVEN UE. THERE SHALL BE NO ORDER AS TO COSTS. 8. FURTHER, HE RELIED ON THE JUDGMENT OF HONBLE KA RNATAKA HIGH COURT IN THE CASE OF CIT V. SABARI ENTERPRISES [200 8] 298 ITR 141 (KAR.) HAS HELD AS UNDER: THIS CLAUSE IS INSERTED BY THE FINANCE ACT WITH EF FECT FROM APRIL 1, 1988. THE EXPLANATION TO THIS CLAUSE IS RE AD VERY CAREFULLY. 'DUE DATE' HAS BEEN EXPLAINED STATING TH AT: MEANS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT CONTRIBUTION TO THE EMPLOYEES' A CCOUNT IN THE RELEVANT FUND UNDER ANY ACT, RULE OR ORDER O R NOTIFICATION ISSUED THEREUNDER OR UNDER ANY STANDIN G ORDER, AWARD, CONTRACT OF SERVICE OR OTHERWISE.' PR IOR TO THE ABOVE CLAUSE WAS INSERTED TO SECTION 36 GIVING STATUTORY DEDUCTIONS OF PAYMENT OF TAX UNDER THE PROVISIONS OF THE ACT, SECTION 43B(B) WAS INSERTED BY THE FINANCE ACT, 1983, WHICH CAME INTO FORCE WITH EFFEC T FROM APRIL 1, 1984. THEREFORE, AGAIN THE PROVISION OF SE CTION 43B(B) CLEARLY PROVIDES THAT NOTWITHSTANDING ANYTHI NG CONTAINED IN THE OTHER PROVISIONS OF THE ACT INCLUD ING SECTION 36(L) CLAUSE (VA) OF THE ACT, EVEN PRIOR TO THE INSERTION OF THAT CLAUSE THE ASSESSEE IS ENTITLED T O GET STATUTORY BENEFIT OF DEDUCTION OF PAYMENT OF TAX FR OM THE REVENUE. IF THAT PROVISION IS READ ALONG WITH THE F IRST PROVISO OF THE SAID SECTION WHICH WAS INSERTED BY T HE FINANCE ACT, 1987, WHICH CAME INTO EFFECT FROM APRI L 1, 1988, THE LETTERS NUMBERED AS CLAUSE (A), OR CLAUSE (C) OR CLAUSE (D) OR CLAUSE (E) OR CLAUSE (F) ARE OMITTED FROM THE ITA NO.386/BANG/2021 PAGE 13 OF 16 ABOVE PROVISO AND THEREFORE DEDUCTION TOWARDS THE EMPLOYEES CONTRIBUTION PAID CAN BE CLAIMED BY THE ASSESSEE. THE EXPLANATION TO CLAUSE (VA) OF SECTION 36(1) OF THE INCOME-TAX ACT FURTHER MAKES IT VERY CLEAR THAT THE AMOUNT ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE T HE DUE DATE APPLICABLE IN THIS CASE AT THE TIME OF SUBMITT ING RETURNS OF INCOME UNDER SECTION 139 OF THE ACT TO T HE REVENUE IN RESPECT OF THE PREVIOUS YEAR CAN BE CLAI MED BY THE ASSESSEES FOR DEDUCTION OUT OF THEIR GROSS INCO ME. THE ABOVE SAID STATUTORY PROVISIONS OF THE INCOME-TAX A CT ABUNDANTLY MAKES IT CLEAR THAT, THE CONTENTION URGE D ON BEHALF OF THE REVENUE THAT DEDUCTION FROM OUT OF GR OSS INCOME FOR PAYMENT OF TAX AT THE TIME OF SUBMISSION OF RETURNS UNDER SECTION 139 IS PERMISSIBLE ONLY IF TH E STATUTORY LIABILITY OF PAYMENT OF PROVIDENT FUND OR OTHER CONTRIBUTION FUNDS REFERRED TO IN CLAUSE (B) ARE PA ID WITHIN THE DUE DATE UNDER THE RESPECTIVE STATUTORY ENACTME NTS BY THE ASSESSEES AS CONTENDED BY LEARNED COUNSEL FOR T HE REVENUE IS NOT TENABLE IN LAW AND THEREFORE THE SAM E CANNOT BE ACCEPTED BY US. 9. THE LD.AR DREW OUR ATTENTION TO THE DELETION OF THE SECOND PROVISO TO SECTION 43B OF THE INCOME-TAX ACT BY THE FINANCE ACT 2003, WHICH PROVISION HAS COME INTO FORCE, WITH EFF ECT FROM APRIL 1, 2004. THE RELIANCE PLACED UPON THE DECISIO N OF THE APEX COURT IN ALLIED MOTORS P. LTD. V. CIT [1997] 224 IT R 677 AND ALSO ON THE DECISION IN GENERAL FINANCE CO. V. CIT (ASST.) [2002] 257 ITR 338 (SC) IN RESPECT OF APPLICABILITY OF SEC TION 43B(B) AND ALSO OMISSION OF CLAUSE (A) OR (C) OR (D ) OR ( E) OR (B REFERRED TO ABOVE OCCURRED IN THE FIRST PROVISO TO SECTION 4 3B, SUPPORTS THE CASE OF THE ASSESSEES AND ALSO RELEVANT PARAGRAPHS EXTRACTED FROM ALLIED MOTOR'S CASE [1997] 224 ITR 677 AND PARAGRAP H 59 REFERRED TO SUPRA IN THIS JUDGMENT FROM THE FINANCE BILL WITH ALL FOURS SUPPORTS THE CASE OF THE ASSESSEE/ RESPONDENT S. THEREFORE, WE HAVE TO ANSWER THE SUBSTANTIAL QUESTION OF LAW N O. 1 FRAMED BY THIS COURT IN THESE APPEALS AT THE INSTANCE OF T HE REVENUE AGAINST THEM, VIZ., IN THE NEGATIVE. ACCORDINGLY, W E ANSWER THE SUBSTANTIAL QUESTION NO. 1 FRAMED IN THESE APPEALS IN THE NEGATIVE. ITA NO.386/BANG/2021 PAGE 14 OF 16 10. FURTHER HE RELIED ON THE FOLLOWING JUDGMENTS:- 1. IN RE-COGNIZANCE FOR EXTENSION OF LIMITATION - SUPREME COURT OF INDIA IN M.P NO.665/2021 IN SMW(C) NO.3/2020 DT.19/7/2021. 2. SALZGITTER HYDRAULICS PVT LTD VS ITO [2021] 128 TAXMAN.COM 192 [HYDERABAD TRIBUNAL] 3. M/S CRESCENT ROADWAYS PVT LTD VS DYCIT - ITA.NO. 1952 HYDERABAD/20 18 4. M/S MAHADEV COLD STORAGE VS JURISDICTIONAL AO - ITA.NO.41 & 42/AGRA/ 2021 5. M/S ESSAE TERAOKA (P.) LTD VS DCIT - [2014] 43 TAXMANN.COM 33 (KARNATAKA) 6. ANAND KUMAR JAIN VS ITO - ITA NO 4192/MUM/2012 VALUE MOMENTUM SOFTWARE SERVICES PRIVATE LIMITED VS. DCIT I.T.A. NO. 2 197/HYD/20 17 [ASSESSMENT YEAR: 2013-14] DATED 19.05.2021; 7. MOHAN RAM CHAUDHARY VS. ITO ITA NO. 51&54- 55/JODH/2021 [ASSESSMENT YEAR: 2018-19] DATED 28.09.2021; 8. CIT V. AIMIL LTD. [2010] 321 ITR 508 9. CIT V. NIPSO POLYFABRIKS LTD. [2013] 350 ITR 326 10. CIT VS. MERCHEM LTD. 378 ITR 443 (KERALA)) 11. SAGUN FOUNDRY (P.) LTD. VS. CIT [2017] 291 CTR 557 (ALLAHABAD) 12. BATA INDIA LTD. VS. DCIT [2020] 180 LTD 464 (KOLKATA - TRIB.) 13. DCIT VS. EASTERN POWER DISTRIBUTION COMPANY OF A.P. LTD. [2016] 160 LTD 432 (VISAKHAPATNAM - TRIB. ) ITA NO.386/BANG/2021 PAGE 15 OF 16 14. NUZIVEDU SWATI COASTAL CONSORTIUM VS. ITO [2015 ] 62 TAXMANN.COM 258 (HYDERABAD - TRIB.) 15. DCIT VS. TEESTA VALLEY TEA CO. LTD. [2017] 85 TAXMANN.COM 301 (KOLKATA - TRIB.) 11. THE LD.DR CONTENTION IS THAT AS PER SEC.43B(B) OF THE INCOME- TAX ACT AND EXPLANATORY NOTES TO FINANCE ACT 1983, THAT EMPLOYEES CONTRIBUTION WAS NEVER INTENDED TO BE CO VERED BY SEC.43B. THIS HAS BEEN REITERATED AND REINFORCED TH ROUGH EXPLANATION 5 TO SEC.43B AND EXPLANATION 2 TO 36(1) (VA) INSERTED BY FINANCE ACT 2021. IF IT WAS THE INTENTION OF THE LEGISLATURE EXPRESSLY MADE CLEAR IN THE FINANCE ACT 2021, THROU GH THE EXPLANATORY NOTES, IT WOULD NECESSARILY TO BE HELD THAT EXPLANATION 5 TO SEC. 43B AND EXPLANATION 2 TO SEC. 36(1)(VA) WOULD APPLY TO ALL PENDING MATTERS AS ON DATE. 12. WE FIND NO MERIT IN THE ARGUMENT OF THE LD.DR S INCE THE EXPLANATION AS PROVIDED IN FINANCE ACT 2021 PRESCRI BES THAT THE AMENDMENT IN BOTH SEC.36(VA) AS WELL AS 43B BY INSE RTING CORRESPONDING EXPLANATION THAT ALTHOUGH IMPUGNED PF COMES IN THE FORM OF PROVISION AND THE SAME IS APPLICABLE FR OM 1/4/2021 ONWARDS ONLY. IN THE PRESENT CASE WE ARE CONCERNED WITH THE ASST. YEAR 2017-18 AND THE AMENDED PROVISION COULD NOT BE APPLIED RETROSPECTIVELY AS IT IS ONLY APPLICABLE W.E.F 1/4/ 2021. BEING SO NO DISALLOWANCE COULD BE MADE BY THE AO IN RESPECT OF PF/ESI PAID WITHIN THE DUE DATE OF FILING RETURN OF INCOME . THOUGH, IT WAS BEYOND THE DATE MENTIONED IN THE RESPECTIVE ACT . THIS VIEW OF OURS IS SUPPORTED BY VARIOUS JUDGMENT RELIED ON BY THE LD.AR. ACCORDINGLY THE APPEAL OF THE ASSESSEE IS ALLOWED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 20. TAKING A CONSISTENT VIEW AND FOLLOWING THE ABOV E ORDER OF THE TRIBUNAL, WE ALLOW THIS GROUND TAKEN BY THE ASSESSE E AND THERE CANNOT BE ANY DISALLOWANCE BY INVOKING THE PROVISIONS OF SECT ION 36(1)(VA) R.W.S. 43B OF THE ACT. ITA NO.386/BANG/2021 PAGE 16 OF 16 21. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF OCTOBER, 2021. SD/- SD/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMB ER ACCOUNTANT MEMBER BANGALORE, DATED, THE 21 ST OCTOBER, 2021. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.