ASST CIT 11(3)(1), MUMBAI V. TRUMAN CONSULTANCY SOLUTIONS P.LTD, MUMBAI

ITA 4518/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0973 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 03-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: JIGAR MEHTA
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 4518 / MUM/20 15 ( ASSESSMENT YEAR : 2011 - 12 ) ASST CIT 11(3)(1) R.NO.427, AAYAKAR BHAVAN M.K.ROAD, MUMBAI 400 020 VS. M/S. TRUMAN CO NSULTANCY SOLUTIONS PVT. LTD., 5, ROYAL PALMS GOLF AND COUNTRY CLUB AAREY MILK COLONY, GOREGAON (E) MUMBAI 400 065 PAN/GIR NO. AABCT9010H APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI V. JUSTIN ASSESSEE BY SHRI JIGAR MEHTA DAT E OF HEARING 03 / 01 /201 8 DATE OF PRONOUNCEME NT 08 / 01 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 18, MUMBAI DATED 25/05/2015 FOR A.Y. 2011 - 12 IN THE MATTER O F ORDER PASSED U/S. 143(3) OF THE IT ACT. 2. THE ONLY GRIEVANCE OF REVENUE RELATES TO DELETING DISALLOWANCE MADE BY AO ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF ACCOUNT. 3. THE CIT(A) HAS DELETED THE DISALLOWANCE AFTER OBSERVING AS UNDER: - 4.3 I HAVE CONS IDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE ASSESSING OFFICER AND FACTS OF THE CASE CAREFULLY. IT IS NOTICED THAT THE ASSESSING OFFICER HAS OBSERVED THAT ASSESSEE HAS MADE LATE PAYMENT OF PROVIDENT FUND AND ESIC FROM THE DATE PRESCRIBED UNDER THE RELEVANT ACT. THEREFORE, THE ASSESSEE WAS ASKED TO EXPLAIN WHY IT MAY NOT BE ITA NO. 4518/MUM/2015 M/S. TRUMAN CONSULTANCY SOLUTIONS PVT. LTD., 2 DISALLOWED. THE AR OF THE APPELLANT HAS SUBMITTED THAT ALL THE PAYMENTS WERE MADE BEFORE FILING OF THE RETURN OF INCOME. THEREFORE, THE DISALLOWANCE MADE MAY NOT BE CALLED FOR. HOWEVER, THE ASSESSING OFFICER HAS NOT AGREED WITH THE ARGUMENT OF THE APPELLANT AND MADE DIS ALLOWANCE OF RS,94,70,5807 - AS PER THE PROVISIONS OF SECTION 2 (24)(X) R.W.S.36(1)(VA) OF THE I .T. ACT. ON THE OTHER HAND THE AR OF THE APPELLANT HAS SUBMITTED THA T THE PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESIC WERE MADE LATE BUT WERE PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S. 139(1) IF THE INCOME TAX ACT. THE PROVISIONS OF SECTION 43B RECUES THE ASSESSEE THE ASSESSEE IN THE EVENT OF PAYMENT OF RELEVANT EXPENSES ON OR BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. TO STRENGTHEN ITS VIEW THE AR OF THE APPELLANT HAS RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF VINAY CEMENT LTD, IN THE CASE OF CIT V. KICH HA SUGAR COMPANY LTD AND IN THE CASE OF CIT - 4 V HINDUSTAN ORGANICS CHEMICALS LTD (SUPRA) FROM THE PERUSAL OF THE SUBMISSIONS AND FACTS OF THE CASE IT IS CLEAR THAT THE ASSESSEE HAS MADE PAYMENT OF EMPLOYEES CONTRIBUTION TO P.P. AND E.S.I.C. R ATE AS PRESCR IBED IN THE RELEVANT ACT. BUT IT ALSO CORRECT AND UNDISPUTABLE THAT THE PAYMENT WAS MADE BEFORE FILING OF THE RETURN OF INCOME U/S. 139(1) OF THE IT ACT NOW THE QUESTION ARISES WHETHER THE ASSESSING OFFICER CAN MAKE DISALLOWANCE U/S.2(24)(X) R.W.S.36(1)(VA) WHEN THE PAYMENT IS MADE BEFORE FILING OF THE INCOME TAX RETURN TO ANSWER THIS QUESTION THE HON'BLE SUPREME COURT IN THE CASE OF VINAY CEMENT LTD HAS HELD THAT THE PRINCIPLE THAT 'INSOFAR AS THE INCOME TAX ACT IS CONCERNED, THE ASSESSEE CAN GET THE BENEFI T IF THE ACTUAL PAYMENT OF THE EMPLOYEES CONTRIBUTION TO PF IS MADE BEFORE THE RETURN IS FILED'. SIMILARLY, THE HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF CIT V.KICHHA SUGAR COMPANY LTD HAS ALSO HELD THAT SECTION 43B APPLIES TO EMPLOYEES CONTRIBUTION AL SO. IT HAS CLEARLY HARMONIZED THE MEANING OF DUE DATE UNDER SECTION 36(1 )(VA) TO MEAN DUE DATE AS PER SECTION 43B. THE HONORABLE COURTS HAS CONSIDERED ALL THE RELEVANT PROVISIONS LIKE SECTION 2(24)(X) 36(1)(VA) AND 43B BEFORE COMING TO THE CONCLUSION. THE HONORABLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS.HINDUSTAN ORGANICS CHEMICALS LTD HAS HELD THAT WHERE THE ASSESSEE COMPANY HAS MADE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND THE ASSESSEE'S CLAIM CANNOT BE DISALLOWED ON ACCOUNT OF D ELAYED PAYMENT IN VIEW OF AMENDMENT TO SECTION 43B. KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES AND THE DECISION OF HONORABLE COURTS IT IS HELD THAT SINCE THE ASSESSEE HAS MADE ALL PAYMENTS BEFORE FILING OF THE RETURNS AS PER THE PROVISIONS OF SECTIO N 139(1) OF THE I.T.ACT. THEREFORE, THE FACTS OF THE PRESENT CASE ARE CLEARLY COVERED BY THE DECISION OF HONORABLE SUPREME COURT AND THE DECISION OF JURISDICTIONAL HIGH COURT HENCE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS DELETED AND THE GROUND OF APPEAL IS ALLOWED ITA NO. 4518/MUM/2015 M/S. TRUMAN CONSULTANCY SOLUTIONS PVT. LTD., 3 4. IT IS CLEAR FROM THE FINDING RECORDED BY CIT(A) THAT ASSESSEE HAS MADE PAYMENT OF CONTRIBUTION AND ESIC BEFORE LAST DATE OF FILING RETURN OF INCOME U/S.139(1). UNDER THESE FACTS AND CIRCUMSTANCES, THE ISSUE IS COVERED BY THE DECISI ON OF BOMBAY HIGH COURT IN THE CASE OF HINDUSTHAN ORGANICS CHEMICALS LTD., AND BY THE DECISION OF HONBLE SUPREME COURT IN CASE OF VINAY CEMENT LTD., ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE OF PF AND E SIC CONTRIBUTION. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 08 / 01 /201 8 S D / - ( AMARJIT SINGH ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOU NTANT MEMBER MUMBAI ; DATED 08 / 01 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//