DCIT CIR 3, MUMBAI V. WINDSOR MACHINES LTD, MUMBAI

ITA 4599/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84573 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 12-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRADR
• Section: 43B; 139

Judgement Text

, G GG G IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL G GG G BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . . , !' !' !' !' BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI . D. D.D. D.K KK KARUNAKARA ARUNAKARA ARUNAKARA ARUNAKARA RAO RAO RAO RAO , ,, , AM AMAM AM , , , , ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.4599 4599 4599 4599/MUM/201 /MUM/201 /MUM/201 /MUM/2013 33 3 ( # # # # $ $ $ $ / ASSESSMENT YEAR : 2006-07) DCIT CIR 3 R. NO.3 B-WING, 6 TH FLOOR, ASHAR IT PARK,WAGLE ESTATE, THANE (W) # # # # / VS. M/S. WINDSOR MACHINES LTD. PLOT NO. E-6, U-2 ROAD, WAGLE INDUSTRIES ESTATE, THANE (W) 400 604 '% ./ & ./ PAN/GIR NO. : AAACT 0057 D ( %' / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( ()%' / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) %' %' %' %' * * * * / APPELLANT BY : SHRI. VIVEK BATRA(DR) ()%' ()%' ()%' ()%' + ++ + * * * * /RESPONDENT BY : NONE # # # # + ++ + , , , , / DT. OF HEARING : 18 TH DECEMBER 2014 -.$ -.$ -.$ -.$ + ++ + , , , , / DT.OFPRONOUNCEMENT: 31 ST DECEMBER 2014 !/ / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 08.02.2013 OF THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2006-07. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL; 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF RS.21,06,271/- BEING THE AMOUNT OF EMPLOY EES CONTRIBUTION SINCE PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME A ND BEFORE 31.03.2006 WAS ALLOWABLE UNDER SEC.43B OVERLOOKING THE FACT THAT THE PROVISI ONS OF SEC.43B COVERS ONLY THE SUMS PAYABLE BY WAS OF CONTRIBUTION BY THE ASSESSEE AS A N EMPLOYER AND NOT THE EMPLOYEES CONTRIBUTION COLLECTED BY THE EMPLOYER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) ERRED IN ALLOWING DEDUCTION IN RESPECT OF THE AMOUNT REPRESENTING EMP LOYEES CONTRIBUTION COLLECTED BY THE EMPLOYER THOUGH SUCH SUMS WERE NOT PAID IN DUE DATE AS PRESCRIBED IN THE RELEVANT LEGISLATION AND THUS IS NOT ALLOWABLE AS DEDUCTION IN VIEW OF THE SPECIFIC PROVISION OF 36(1)(VA). WHILE DOING SO THE CIT(A) HAS NOT CONSID ERED THE RATIO OF THE DECISIONS OF ITA NO.4599/M/13. . 2 JURISDICTIONAL HIGH COURT IN THE CASE OF GODAVARI S AKHAR KHARKHANA 298 ITR 149 AND ALSO THAT OF IN THE CASE OF CIT VS. PAMNI TISSUES LT D. 313 ITR 137 (BOM). 3. NOBODY HAS APPEARED ON BEHALF OF THE ASSESSEE/RE SPONDENT WHEN THIS APPEAL WAS CALLED FOR HEARING. IT IS TRANSPIRED THAT THE ASSESSEE DID NOT APPEAR EVEN ON THE EARLIER DATE OF HEARING. ACCORDINGLY, WE PROPOSE TO HEAR AND DISPOSE OFF THIS APPEAL EX-PARTE. 4. WE HAVE HEARD LEARNED DR AND CAREFULLY GONE THRO UGH THE IMPUGNED ORDER OF CIT(A). THE CIT(A) HAS CONSIDERED AND DECIDED THIS ISSUE IN PARA 3.2 TO 3.7 AS UNDER; 3.2 THE FINANCE ACT,2003 HAS OMITTED THE SECOND PR OVISO AND AMENDED THE FIRST PROVISO WITH EFFECT FROM ASSESSMENT YEAR 2004-05. T HE SECTION READS AS UNDER; PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SH ALL APPLY IN RELATION TO SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB- SECTION (1) OF SECTION 139 IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY OF PAY SUCH SUM WAS INCURRED AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FU RNISHED BY THE ASSESSEE ALONG WITH SUCH RETURN. 3.3 THE AO WHILE DISALLOWING THE DEDUCTION ON ACCOU NT OF CONTRIBUTION OF PF AND ESIC HAS NOT GIVEN ANY DETAILS AS HOW MUCH IS THE DELAY IN MAKING THE PAYMENTS TO THE GOVERNMENT ACCOUNT AND WHEN THE ACTUAL PAYMENTS HAV E BEEN MADE BY THE APPELLANT ETC. DURING THE COURSE OF APPELLANT PROCEEDINGS, TH E AR OF THE APPELLANT HAS STATED THAT OUT OF THE TOTAL AMOUNT DISALLOWED OF RS.23,50,114/ -, THE APPELLANT HAD PAID AN AMOUNT OF RS.21,06,271/- BEFORE 31/03/2006 AND THE BALANCE AMOUNT OF RS.2,43,843/- WAS PAID AFTER THE ACCOUNTING YEAR BU T BEFORE THE FILING OF THE RETURN OF INCOME. THE AR HAS FILED A SHEET GIVING THE DETAILS , THE DATE OF PAYMENTS ON ACCOUNT OF THE CONTRIBUTIONS PF AND ESIC, WHICH WERE BEFORE THE FILING OF THE RETURN OF INCOME OF THE APPELLANT COMPANY. 3.4 THERE ARE A NUMBER OF JUDICIAL PRONOUNCEMENTS ON THE SUBJECT AS OF NOW WHEREIN IT HAS BEEN HELD THAT EMPLOYEES CONTRIBUTION MADE TO P ROVIDENT FUND BEYOND THE DUE DATES BUT PAID BEFORE THE DUE DATE FOR FILING OF TH E RETURN OF INCOME U/S.139(1) OF THE RELEVANT PREVIOUS YEAR CANNOT BE DISALLOWED U/S.36( 1)(VA) OR 43B. 3.5. IN THE CASE OF CIT VS. DHARMENDER SHAMA (2008) 297 ITR 320 (DEL.) IT HAS BEEN HELD BY THE HONBLE HIGH COURT THAT CONTRIBUTION T OWARDS PF AND ESI HAS BEEN PAID BY THE ASSESSEE WITHIN 2 TO 4 DAYS AFTER THE GRACE PER IOD PROVIDED UNDER SECTION 43B BUT FEFORE FILING OF THE RETURN, DISALLOWANCE UNDER SEC TION 43B WERE RIGHTLY DELETED BY THE TRIBUNAL. 3.6 IN THE CASE OF COMMISSIONER OF INCOME TAX VS. V INAY CEMENT LTD. (2007) 213 CTR (SC) 268, IT HAS BEEN HELD BY THE HONBLE S UPREME COURT THAT CONTRIBUTION MADE TO PROVIDENT FUND BEFORE FILING OF THE RETURN COULD NOT BE DISALLOWED UNDER S.43B AS IT STOOD PRIOR TO THE AMENDMENT W.E.F. 1 ST APRIL, 2004. 3.7. IN VIEW OF THE ABOVE DECISIONS OF THE VARIOUS COURTS, AND THE FACT THAT THE APPELLANT HAS PAID AN AMOUNT OF RS.21,06,271/- BEFORE 31/03/2 006 AND THE BALANCE AMOUNT OF ITA NO.4599/M/13. . 3 RS.2,43,843/- WAS PAID BEFORE THE FILING OF THE RET URN OF INCOME, THE ADDITION MADE BY THE AO AMOUNTING TO RS.23,50,114/- ON ACCOUNT OF DI SALLOWANCE OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND AND ESIC IS UNWARRANT ED AND THEREFORE, DELETED. 4. THERE IS NO DISPUTE THAT THE PAYMENTS ON ACCOUNT OF PF/ESIC WERE MADE BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETURN. T HEREFORE, BY CONSIDERING THE SUBSEQUENT AMENDMENT IN THE PROVISIONS OF SECTION 4 3B AS WELL AS VARIOUS DECISIONS WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE CIT(A) DELETING THE DISALLOWANCE MADE BY AO U/S.43B. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON THIS 31 ST DAY OF DECEMBER, 2014. SD/- SD/- ( . ) !' (D. KARUNAKARA RAO) ACCOUNTANT MEMBER ( ) !' (VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 31 ST DECEMBER, 2014 A.K.PATEL COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI