M/s Balance Clothing Private Ltd., New Delhi V. ITO, New Delhi

ITA 4830/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6931 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 24-11-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 09-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANJU GOEL; SURINDER KUMAR
• Section: 43B; 143(3); 142(1); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-II, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 4830/DEL/2016 ASSESSMENT YEAR: 2012-13 M/S BALANCE CLOTHING PVT. LTD., VS. INCOME TAX OFFI CER, C-328, 1 ST FLOOR, WARD 4(2), DEFENCE COLONY, NEW DELHI NEW DELHI 110 024 (PAN: AACCB2884Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SURINDER KUMAR, CA & MS. ANJU GOEL, CA DEPARTMENT BY : SH. ANIL SHARMA, SR. DR ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE IMPUGN ED ORDER DATED 21.6.2016 OF LD. CIT(A)-2, NEW DELHI PE RTAINING TO ASSESSMENT YEAR 2012-13. THE GROUND RAISED IN THE ASS ESSEES APPEAL READS AS UNDER:- 1. THAT THE LD. CIT(A)-2, NEW DELHI HAS ERRED ON LAW AS WELL AS ON FACTS CONFIRMING THE DISALLOWANCE OF RS. 8,40,545/- ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO ESIC AND PF CONSIDERING THE SAME AS LATE PAYMENT AS PER PROVISIONS OF SECTION 36(1)(VA) OF THE INCOME TAX ACT, 1961. 2 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A)-2, NEW DELHI HAS ERRED BOTH ON LAW AS WELL AS ON FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE CHARGEABILITY OF INTEREST UNDER SECTION 234B OF THE INCOME TAX ACT, 1961. 3. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE COMPANY FILED ITS RETURN FOR AY 2012-13 ON 29.9.2012 DECLARI NG INCOME AT RS. 22,82,420/-. THE CASE WAS PROCESSED U/S. 143( 1) OF THE I.T. ACT, 1961 AND WAS TAKEN UP FOR SCRUTINY. ACCORD INGLY, NOTICE U/S. 143(2) OF THE I.T. ACT DATED 26.9.2013 AN D SUBSEQUENTLY NOTICE U/S. 142(1) OF THE I.T. ACT, 1961 ALONGWITH QUESTIONNAIRE WERE ISSUED TO THE ASSESSEE. IN RESPO NSE TO THE SAID NOTICES, THE AUTHORISED REPRESENTATIVE OF THE ASSE SSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILED T HE DETAILS. DURING THE YEAR UNDER CONSIDERATION AND ON P ERUSAL OF TAX AUDIT REPORT, IT WAS OBSERVED THAT THE ASSESSEE HAD LATE DEPOSITED THE EMPLOYEES CONTRIBUTION OF ESIC AND PF AMOUNTING TO RS. 8,40,545/- AND ACCORDINGLY MADE THE CONTRAVENTION OF PROVISIONS OF SECTION 36(1)(VA). TH IS AMOUNT WAS QUALIFIED BY THE AUDITORS OF THE ASSESSEE COMPANY IN THEIR 3 TAX AUDIT REPORT. IN REPLY TO THE SPECIFIC QUERY RAISED BY THE AO, ASSESSEE COMPANY HAS SUBMITTED THAT THE EMPLOYEES CONTRIBUTION OF PF AND ESIC WAS DEPOSITED LATE IN S OME MONTHS. AO FURTHER OBSERVED THAT ASSESSEE COMPANY HAS MADE THE CONTRAVENTION OF PROVISIONS OF SECTION 36(1 )(VA) AND PROVISION OF SECTION 43B AS CLAIMED BY THE ASSESSEE COMPANY ARE NOT APPLICABLE IN THIS CASE, HENCE, HE DISALLOW ED RS. 8,40,545/- AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE COMPANY BY COMPLETING THE ASSESSMENT AT RS. 31,29,970/- VIDE HIS ORDER DATED 27.2.2015 PASSE D U/S. 143(3) OF THE I.T. ACT, 1961. 3. AGGRIEVED WITH THE AFORESAID ORDER, ASSESSEE PREF ERRED AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUG NED ORDER DATED 21.6.2016 HAS DISMISSED THE APPEAL OF THE ASSES SEE BY UPHOLDING THE ACTION OF THE AO. 4. NOW THE ASSESSEE IS AGGRIEVED AGAINST THE IMPUGNE D ORDER AND FILED THE PRESENT APPEAL BEFORE THE TRIBUNA L. 5. LD. COUNSEL OF THE ASSESSEE HAS STATED THAT LOWER AUTHORITIES HAVE WRONGLY DISALLOWED THE ADDITION OF RS. 8,40,545/- ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO ESIC AND PF CONSIDERING THE SAME AS LATE PAYMENT AS PER P ROVISIONS OF SECTION 36(1)(VA) OF THE INCOME TAX ACT, 1961. HO WEVER, HE STATED THAT SINCE THE ASSESSEE HAS DEPOSITED THE EM PLOYEES 4 CONTRIBUTION OF PF AND ESIC LATE IN SOME MONTHS, HEN CE, THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE SIMILAR DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LIMITED REPORTED IN (2010) 321 ITR 508 (DEL). IN THI S BEHALF, HE FILED THE COPY OF THE SAID DECISION. THEREFORE, HE REQUESTED THAT BY FOLLOWING THE SAME REASONING, THE ADDITION IN DISPUTE MAY BE DELETED AND ACCORDINGLY, THE APPEAL OF THE AS SESSEE MAY BE ALLOWED. 6. ON THE CONTRARY, LD. SR. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECO RDS, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) AND THE DECISION REFERRED BY THE LD. COUNSEL OF THE ASSES SEE IN THE CASE OF CIT VS. AIMIL LIMITED REPORTED IN (2010) 3 21 ITR 508 (DEL). I FIND CONSIDERABLE COGENCY IN THE ASSESSEES COUNSEL IN RELYING UPON THE AFORESAID DECISION OF THE HONBLE HIGH COURT OF DELHI, BECAUSE THE ASSESSEE HAS DEPOSITED THE EMPLOYE ES CONTRIBUTION TO ESIC AND PF BEFORE THE DUE DATE OF FIL ING OF RETURN GIVEN U/S. 139(1) OF THE I.T. ACT, 1961. I A LSO FIND THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LIMITED REPORTED IN (2010) 321 ITR 508 (DEL) HAS H ELD AS UNDER:- 5 WE MAY ONLY ADD THAT IF THE EMPLOYEES CONTRIBUTION IS NOT DEPOSITED BY THE DUE DATE PRESCRIBED UNDER THE RELEVANT ACTS AND IS DEPOSITED LATE, THE EMPLOYER NOT ONLY PAYS INTEREST ON DELAYED PAYMENT BUT CAN INCUR PENALTIES ALSO, FOR WHICH SPECIFIC PROVISIONS ARE MADE IN THE PROVIDENT FUND ACT AS WELL AS THE ESI ACT. THEREFORE, THE ACT PERMITS THE EMPLOYER TO MAKE THE DEPOSIT WITH SOME DELAYS, SUBJECT TO THE AFORESAID CONSEQUENCES. IN SO FAR AS THE INCOME TAX ACT IS CONCERNED, THE ASSESSEE CAN GET THE BENEFIT IF THE ACTUAL PAYMENT IS MADE BEFORE THE RETURN IS FILED, AS PER THE PRINCIPLE LAID DOWN BY THE SUPREME COURT IN VINAY CEMENT (2009) 313 ITR (ST.) 1. WE, THUS, ANSWER THE QUESTION IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. AS A CONSEQUENCE, THE APPEALS FILED BY THE ASSESSES STAND ALLOWED AND THOSE FILED BY THE REVENUE ARE DISMISSED. 7. AFTER PERUSING THE AFORESAID DECISION OF THE HON BLE DELHI HIGH COURT, I AM OF THE VIEW THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE AFORESAID DECISION, BECAUS E IN THE PRESENT CASE ALSO THE ASSESSEE HAS DEPOSITED THE EMPLOY EES 6 CONTRIBUTION TO ESIC AND PF BEFORE THE DUE DATE OF FIL ING OF RETURN GIVEN U/S. 139(1) OF THE I.T. ACT. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. AIMIL LIMITED, DELHI, THE ADDITION IN DISPUTE IS DELETED AND ACCORDINGLY, THE GROUND NO . 1 RAISED BY THE ASSESSEE STANDS ALLOWED. 8. WITH REGARD TO GROUND NO. 2 RELATING TO CHARGING OF INTEREST U/S. 234B OF THE INCOME TAX ACT, 1961 IS CONC ERNED, THE SAME IS CONSEQUENTIAL IN NATURE, HENCE, NEED NOT BE ADJUDICATED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/01/2 017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 20/01/2017 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR