ACIT, New Delhi V. M/s. Planman HR Pvt. Ltd., New Delhi

ITA 5053/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4763 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 07-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 43B; 28; 154; 139

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 5053/DEL/2015 (ASSESSMENT YEAR: 2012 - 13 ) ACIT, CIRCLE - 201(1), ROOM NO. 219, 2 ND FLOOR, CR BUILDING, IP ESTATE, NEW DELHI VS. PLANMAN HR PVT. LTD, 48, COMMUNITY CENTRE, NARAINA INDL AREA, PHASE - 1, NEW DELHI PAN:AAFCP0981K (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANSHU PRAKASH, SR. DR ASSESSEE BY: SHRI VED JAIN, ADV DATE OF HEARING 06/09 / 2017 DATE OF PRONOUNCEMENT 13 / 09 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - 7, NEW DELHI DATED 20.05.2015 FOR THE ASSESSMENT YEAR 2012 - 13. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF EMPLOYEES CONTRIBUTION OF PF, ESI AND PROFESSIONAL TAX OF RS. 66896748/ - BY FOLLOWING A DECISION OF THE JURISD ICTIONAL HIGH COURT WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT ON MERITS BUT ON ADMINISTRATIVE COMPULSIONS. 3. IN THIS APPEAL. THE LTD ISSUE THAT IS ARISE IN IS THAT AO HAS MADE THE ADDITION OF RS. 6,689 6748 ALLEGING THAT THE ASSESSEE HAS NOT COMPLIED W ITH THE PROVISIONS OF SECTION 2(24)(X) AND 36 (1 )(VA) OF THE INCOME TAX ACT STATING THAT PAYMENT TO BE MADE ON ACCOUNT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND, ESI AND PROFESSION TAX HAS NOT BEEN MADE ON OR BEFORE THE DUE DATE AS PRESCRIBED UNDER THE RESPECTIVE LAW. THE LD. CIT (A) , DELETED THE ABOVE ADDITION FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT. THEREFORE, REVENUE IS IN APPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE EXPLAIN THE PROVISIONS OF THE LAW UNDER WHICH THE DISALLO WANCE HAS BEEN MADE AND SUBMITTED THAT IN CASE OF EMPLOYEES CONTRIBUTION THE SAME IS NOT ALLOWABLE. PAGE 2 OF 9 5. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED A NOTE STATING THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE JURISDICTIONA L HIGH COURT AS WELL AS THE ORDER OF THE COORDINATE BENCH IN ASSESSEES OW N CASE FOR ASSESSMENT YEAR 2013 - 14 IN ITA NO. 5028/ DEL /2016 DATED 23/01/2017. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND ALSO PERUSED THE ORDER OF THE LD. ASSESSING OFFICE R AS WELL AS THE ORDER OF THE LD. CIT (A) , DELETING THE ABOVE ADDITION AND THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2013 - 14 WHEREIN THE IDENTICAL ADDITION HAS BEEN DELETED FOLLOWING THE DECISION OF THE JURISDICTIONAL H IGH COURT. THE HONBLE JURISDICTIONAL HIGH COURT IN 321 ITR 508 IN CASE OF CIT VS. AMIL LTD HAS DEALT WITH THE IDENTICAL ISSUE AS UNDER: - 2. THE CASE RELATES TO THE ASSESSMENT YEAR 2002 - 03. THE RESPONDENT ASSESSEE HAD FILED ITS RETURN ON 30 - 10 - 2002 DECLA RING INCOME AT RS. 7,95,430. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) FOUND THAT THE ASSESSEE HAD DEPOSITED EMPLOYERS' CONTRIBUTION AS WELL AS EMPLOYEES' CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI AFTER THE DUE DATE, AS PRESCRIBED UND ER THE RELEVANT ACT/RULES. ACCORDINGLY, HE MADE ADDITION OF RS. 42,58,574 BEING EMPLOYEES' CONTRIBUTION UNDER SECTION 36(1)( VA ) OF THE ACT AND RS. 30,68,583 BEING EMPLOYERS' CONTRIBUTION UNDER SECTION 43B OF THE ACT. FELT AGGRIEVED BY THIS ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) WHO DECIDED THE SAME VIDE ORDERS DATED 15 - 7 - 2005. THOUGH THE CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE THAT IF THE PAYMENT IS MADE BEFORE THE DUE DATE OF FILING OF RETURN, NO DISALLOWANCE COULD BE MADE IN VIEW OF THE PROVISIONS OF SECTION 43B, AS AMENDED VIDE FINANCE ACT, 2003, HE STILL CONFIRMED THE ADDITION MADE BY THE ASSE SSING OFFICER ON THE GROUND THAT NO DOCUMENTARY PROOF WAS GIVEN TO SUPPORT THAT PAYMENT WAS IN FACT MADE BY THE ASSESSEE. THE ASSESSEE FILED AN APPLICATION UNDER SECTION 154 OF THE ACT BEFORE THE CIT(A) FOR RECTIFICATION OF THE MISTAKE. AFTER HAVING SATISF IED THAT PAYMENT HAD, IN FACT, BEEN MADE, THE CIT(A) RECTIFIED THE MISTAKE AND DELETED THE ADDITION BY HOLDING THAT THE ASSESSEE HAD MADE THE PAYMENT BEFORE THE DUE DATE OF FILING OF THE RETURN, WHICH WAS A FACT APPARENT FROM THE RECORD. 3. IT WAS NOW THE TURN OF THE REVENUE TO FEEL AGITATED BY THESE ORDERS AND, THEREFORE, THE REVENUE APPROACHED THE INCOME - TAX APPELLATE TRIBUNAL (ITAT) CHALLENGING THE ORDERS OF THE CIT(A). THE DEPARTMENT HAS, HOWEVER, REMAINED UNSUCCESSFUL AS THE APPEAL PREFERRED BY THE DEP ARTMENT IS DISMISSED BY THE ITAT VIDE ITS IMPUGNED DECISION DATED 31 - 12 - 2007, WHICH IS THE SUBJECT - MATTER OF APPEAL BEFORE US. PERUSAL OF THE ORDER OF THE TRIBUNAL WOULD SHOW THAT IT HAS RELIED UPON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT V. V INAY CEMENT LTD. [2007] 213 CTR (SC) 268, TO SUPPORT ITS DECISION TO THE EFFECT THAT IF THE EMPLOYERS' AS WELL AS EMPLOYEES' CONTRIBUTION PAGE 3 OF 9 TOWARDS PROVIDENT FUND AND ESI IS PAID BEFORE THE DUE DATE OF FILING OF RETURN, NO DISALLOWANCE CAN BE MADE BY THE ASS ESSING OFFICER. 4. IN SOME OTHER APPEALS PREFERRED BY THE ASSESSEES, THE ITAT HAS TAKEN CONTRARY VIEW AND UPHELD THE ADDITION MADE BY THE ASSESSING OFFICERS. UNDER THESE CIRCUMSTANCES, ALL THESE APPEALS WERE ADMITTED AND HEARD ON THE FOLLOWING QUESTION OF LAW : 'WHETHER THE ITAT WAS CORRECT IN LAW IN DELETING THE ADDITION RELATING TO EMPLOYEES' CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI MADE BY THE ASSESSING OFFICER UNDER SECTION 36(1)( VA ) OF THE INCOME - TAX ACT, 1961?' 5. SECTION 36 OF THE ACT DEALS WITH CERTAIN DEDUCTIONS WHICH SHALL BE ALLOWED IN RESPECT OF MATTERS DEALT WITH THEREIN, IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 OF THE ACT. DIFFERENT TYPES OF DEDUCTIONS ARE PROVIDED THEREIN IN VARIOUS CLAUSES OF SECTION 36. CLAUSE ( IV ) OF SUB - SECTIO N (1) DEALS WITH DEDUCTIONS ON ACCOUNT OF CONTRIBUTION TOWARDS A RECOGNIZED PROVIDENT FUND OR AN APPROVED SUPERANNUATION FUND MADE BY THE ASSESSEE AS AN EMPLOYER, SUBJECT TO CERTAIN LIMITS AND ALSO SUBJECT TO CERTAIN CONDITIONS AS THE CBDT MAY THINK FIT TO SPECIFY. CLAUSE ( V ) OF SUB - SECTION (1) OF SECTION 36 ENABLES THE ASSESSEE TO SEEK DEDUCTION IN RESPECT OF SUM PAID BY IT AS AN EMPLOYER BY WAY OF CONTRIBUTION TOWARDS AN APPROVED GRATUITY FUND CREATED BY HIM FOR THE EXCLUSIVE BENEFIT OF HIS EMPLOYEES UNDE R AN IRREVOCABLE TRUST. THEN COMES CLAUSE ( VA ) WHICH DEALS ABOUT EMPLOYEES' CONTRIBUTION IN THE PROVIDENT FUND AND ESI AND READS AS UNDER : '( VA )ANY SUM RECEIVED BY THE ASSESSEE FROM ANY OF HIS EMPLOYEES TO WHICH THE PROVISIONS OF SUB - CLAUSE ( X ) OF CLAUSE ( 24 ) OF SECTION 2 APPLY, IF SUCH SUM IS CREDITED BY THE ASSESSEE TO THE EMPLOYEE'S ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE. EXPLANATION - FOR THE PURPOSES OF THIS CLAUSE, 'DUE DATE' MEANS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT AN EMPLOYEE'S CONTRIBUTION TO THE EMPLOYEE'S ACCOUNT IN THE RELEVANT FUND UNDER ANY ACT, RULE, ORDER OR NOTIFICATION ISSUED THEREUNDER OR UNDER ANY STANDING ORDER, AWARD, CONTRACT OR SERVICE OR OTHERWISE.' 6. IT WOULD ALSO BE APPRO PRIATE TO TAKE NOTE OF SECTION 43B OF THE ACT PRIMARILY FOR THE REASON THAT IN VINAY CEMENT LTD.'S CASE ( SUPRA ) IT WAS THIS PROVISION WHICH CAME UP FOR DISCUSSION BEFORE THE SUPREME COURT AND ALSO KEEPING IN VIEW THE CONTENTION OF LEARNED COUNSEL FOR THE R EVENUE THAT THIS JUDGMENT WOULD BE OF NO AVAIL TO THE ASSESSEE WHILE DISCUSSING THE MATTER UNDER SECTION 36(1)( VA ) OF THE ACT. SECTION 43B STIPULATES THAT CERTAIN DEDUCTIONS ARE TO BE GIVEN ONLY ON ACTUAL PAYMENT. CLAUSE ( B ) THEREOF TALKS ABOUT CONTRIBUTIO N BY THE ASSESSEE AS EMPLOYER TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR GRATUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF THE EMPLOYEES. SINCE WE ARE CONCERNED ONLY WITH CLAUSE ( B ), WE REPRODUCE THE SAME FOR CLEARER UNDERSTANDING : '43B. CERTAIN DE DUCTIONS TO BE ONLY ON ACTUAL PAYMENT. NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RESPECT OF PAGE 4 OF 9 ****** ( B )ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER BY WAY OF CONTRIBUTION TO A NY PROVIDENT FUND OR SUPERANNUATION FUND OR GRATUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF EMPLOYEES, OR, ****** SHALL BE ALLOWED IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED BY THE ASSESSEE ACCORDING TO THE MET HOD OF ACCOUNTING REGULARLY EMPLOYED BY HIM ONLY IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 OF THAT PREVIOUS YEAR IN WHICH SUCH SUM IS ACTUALLY PAID BY HIM : PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE 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 TO PAY SUCH SUM WAS INCURRED AS AFORESAID AND TH E EVIDENCE OF SUCH PAYMENT IS FURNISHED BY THE ASSESSEE ALONG WITH SUCH RETURN.' [EMPHASIS SUPPLIED] 7. DURING THE PERIOD IN QUESTION WITH WHICH WE ARE CONCERNED, SECTION 43B CONTAINED SECOND PROVISO ALSO, WHICH STANDS OMITTED BY THE FINANCE ACT, 2003 WITH EFFECT FROM 1 - 4 - 2004. SINCE, THIS PROVISION EXISTED AT THE RELEVANT TIME, IT ALSO NEEDS TO BE REPRODUCED : ' PROVIDED FURTHER THAT NO DEDUCTION SHALL, IN RESPECT OF ANY SUM REFERRED TO IN CLAUSE ( B ), BE ALLOWED UNLESS SUCH SUM HAS ACTUALLY BEEN PAID IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE ON OR BEFORE THE DUE DATE AS DEFINED IN THE EXPLANATION BELOW CLAUSE ( VA ) OF SUB - SECTION (1) OF SECTION 36, AND WHERE SUCH PAYMENT HAS BEEN M ADE OTHERWISE THAN IN CASH, THE SUM HAS BEEN REALIZED WITHIN FIFTEEN DAYS FROM THE DUE DATE.' 8. AS PER THE FIRST PROVISO, IF THE PAYMENT IS ACTUALLY MADE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FILING THE RETURN, IT WOULD BE ADMISSIBLE AS DED UCTION. THUS, THE 'DUE DATE' IS THE DATE ON WHICH RETURN IS TO BE FILED. THE CASE OF THE REVENUE IS THAT FOR EMPLOYEES' CONTRIBUTION, THE 2ND PROVISO WAS SPECIFICALLY INCORPORATED AND IN THE PRESENT CASE, AS WE ARE CONCERNED WITH NON - DEPOSIT OF THE EMPLOYE ES' CONTRIBUTION TOWARDS PROVIDENT FUND AS WELL AS ESI CONTRIBUTION BY THE EMPLOYER, ONLY 2ND PROVISO BE LOOKED INTO. 9. WHAT IS SOUGHT TO BE ARGUED IS THAT DISTINCTION IS TO BE MADE WHILE TREATING THE CASE RELATED TO EMPLOYERS' CONTRIBUTION ON THE ONE HAN D AND EMPLOYEES' CONTRIBUTION ON THE OTHER HAND. IT WAS SUBMITTED THAT WHEN EMPLOYEES' CONTRIBUTION IS RECOVERED FROM THEIR SALARIES/WAGES, THAT IS TRUST MONEY IN THE HANDS OF THE ASSESSEE. FOR THIS REASON, RIGOURS OF LAW ARE PROVIDED BY TREATING IT AS INC OME WHEN THE ASSESSEE RECEIVES THE EMPLOYEES' CONTRIBUTION AND ENABLING THE ASSESSEE TO CLAIM DEDUCTION ONLY ON ACTUAL PAYMENT BY DUE DATE SPECIFIED UNDER THE PROVISIONS. 10. MS. PREM LATA BANSAL, LEARNED COUNSEL FOR THE REVENUE, THUS, ARGUED THAT THE SECO ND PROVISO TO SECTION 43B, AS IT STOOD AT THE PAGE 5 OF 9 RELEVANT TIME, CLEARLY MENTIONED THAT DEDUCTION IN RESPECT OF ANY SUM REFERRED TO IN CLAUSE ( B ) SHALL NOT BE ALLOWED UNLESS SUCH SUM HAS ACTUALLY BEEN PAID IN CASH OR BY ISSUANCE OF CHEQUE OR DRAFT OR BY ANY OT HER MODE ON OR BEFORE THE DUE DATE, AS DEFINED IN THE EXPLANATION BELOW CLAUSE ( VA ) OF SUB - SECTION (1) OF SECTION 36. THUS, THE ASSESSEE WOULD EARN THE ENTITLEMENT ONLY IF THE ACTUAL PAYMENT IS MADE BEFORE THE DUE DATE SPECIFIED IN EXPLANATION BELOW CLAUSE ( VA ) OF SUB - SECTION (1) OF SECTION 36 OF THE ACT. AS PER THE SAID EXPLANATION , 'DUE DATE' MEANS THE DATE BY WHICH THE ASSESSEE IS REQUIRED, AS AN EMPLOYER, TO CREDIT THE EMPLOYEES' CONTRIBUTION TO THE EMPLOYEES' ACCOUNT IN THE RELEVANT FUND UNDER ANY ACT, RULES, ORDER OR NOTIFICATION ISSUED THEREUNDER OR UNDER ANY STANDING ORDER AWARD CONTRACT OF SERVICE OR OTHERWISE. 11. BEFORE WE DELVE INTO THIS DISCUSSION, WE MAY TAKE NOTE OF SOME MORE PROVISIONS OF THE ACT. SECTION 2( 24 ) OF THE ACT ENUMERATES DIFFERENT COMPONENTS OF INCOME. IT, INTER ALIA, STIPULATES THAT INCOME INCLUDES ANY SUM RECEIVED BY THE ASSESSEE FROM HIS EMPLOYEES AS CONTRIBUTIONS TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR ANY FUND SET UP UNDER THE PROVISIONS OF THE EMPLOYEES' STATE INSURAN CE ACT, 1948 (34 OF 1948), OR ANY OTHER FUND FOR THE WELFARE OF SUCH EMPLOYEES. IT IS CLEAR FROM THE ABOVE THAT AS SOON AS EMPLOYEES' CONTRIBUTION TOWARDS PROVIDENT FUND OR ESI IS RECEIVED BY THE ASSESSEE BY WAY OF DEDUCTION OR OTHERWISE FROM THE SALARY/WA GES OF THE EMPLOYEES, IT WILL BE TREATED AS 'INCOME' AT THE HANDS OF THE ASSESSEE. IT CLEARLY FOLLOWS THEREFROM THAT IF THE ASSESSEE DOES NOT DEPOSIT THIS CONTRIBUTION WITH PROVIDENT FUND/ESI AUTHORITIES, IT WILL BE TAXED AS INCOME AT THE HANDS OF THE ASSE SSEE. HOWEVER, ON MAKING DEPOSIT WITH THE CONCERNED AUTHORITIES, THE ASSESSEE BECOMES ENTITLED TO DEDUCTION UNDER THE PROVISIONS OF SECTION 36(1)( VA ) OF THE ACT. SECTION 43B( B ), HOWEVER, STIPULATES THAT SUCH DEDUCTION WOULD BE PERMISSIBLE ONLY ON ACTUAL PA YMENT. THIS IS THE SCHEME OF THE ACT FOR MAKING AN ASSESSEE ENTITLED TO GET DEDUCTION FROM INCOME INSOFAR AS EMPLOYEES' CONTRIBUTION IS CONCERNED. IT IS IN THIS BACKDROP WE HAVE TO DETERMINE AS TO AT WHAT POINT OF TIME THIS PAYMENT IS TO BE ACTUALLY MADE. 12. SINCE THE ITAT WHILE HOLDING THAT THE AMOUNT WOULD QUALIFY FOR DEDUCTION EVEN IF PAID AFTER THE DUE DATES PRESCRIBED UNDER THE PROVIDENT FUND/ESI ACT BUT BEFORE THE FILING OF THE INCOME - TAX RETURNS BY PLACING RELIANCE UPON THE SUPREME COURT JUDGMENT IN VINAY CEMENT LTD.'S CASE ( SUPRA ). AT THIS JUNCTURE WE TAKE NOTE OF THE DISCUSSION OF ITAT ON THIS ASPECT : '11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IN THE ASSESSMENT ORDER LD. ASSESSING OFFICER HA S CATEGORICALLY STATED THAT WHAT THE AMOUNT DUE WAS FOR WHICH MONTH IN RESPECT OF EPF, FAMILY PENSION, PF INSPECTION CHARGES AND ESI DEPOSITS AND WHAT WERE THE DUE DATES FOR THESE DEPOSITS AND ON WHICH DATE THESE DEPOSITS WERE MADE. THE DATES OF DEPOSITS A RE MENTIONED BETWEEN 23RD MAY, 2001 TO 23RD APRIL, 2002. THE LATEST PAYMENT IS MADE ON 23RD APRIL, 2002 AND ASSESSEE BEING LIMITED COMPANY HAD FILED ITS RETURN ON 20TH OCTOBER, 2002 WHICH IS A DATE NOT BEYOND THE DUE DATE OF FILING OF THE RETURN. THUS, IT IS CLEAR BEYOND DOUBT THAT ALL THE PAYMENTS WHICH HAVE BEEN PAGE 6 OF 9 DISALLOWED WERE MADE MUCH EARLIER TO THE DUE DATE OF FILING OF THE RETURN. THE DISALLOWANCE IS NOT MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THERE IS NO PROOF OF MAKING SUCH PAYMENT BUT DIS ALLOWANCE IS MADE ONLY ON THE GROUND THAT THESE PAYMENTS HAVE BEEN MADE BEYOND THE DUE DATES OF MAKING THESE PAYMENTS UNDER THE RESPECTIVE STATUTE. THUS, IT WAS NOT AN ISSUE THAT THE PAYMENTS WERE NOT MADE BY THE ASSESSEE ON THE DATES WHICH HAVE BEEN STATE D TO BE THE DATES OF DEPOSITS IN THE ASSESSMENT ORDER. IF SUCH IS A FACTUAL ASPECT THEN ACCORDING TO LATEST POSITION OF LAW CLARIFIED BY HON'BLE SUPREME COURT IN THE CASE OF CIT V. VINAY CEMENT LTD. THAT NO DISALLOWANCE COULD BE MADE IF THE PAYMENTS ARE MA DE BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. THIS ISSUE CAME BEFORE HON'BLE SUPREME COURT IN THE CASE OF CIT V. VINAY CEMENT LTD. WHICH WAS A SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THE HIGH COURT ORDER OF 26TH JUNE, 2006 IN ITA NO . 2/05 AND ITA NO. 56/03 AND ITA NO. 80/03 OF THE HIGH COURT OF GUWAHATI, ASSAM AND IT IS ORDER DATED 7TH MARCH, 2007. A COPY OF THE SAID ORDER IS PLACED ON RECORD. THE OBSERVATIONS OF THEIR LORDSHIPS ON THE ISSUE ARE AS UNDER : 'IN THE PRESENT CASE WE AR E CONCERNED WITH THE LAW AS IT STOOD PRIOR TO THE AMENDMENT OF SECTION 43B. IN THE CIRCUMSTANCES THE ASSESSEE WAS ENTITLED TO CLAIM THE BENEFIT IN SECTION 43B FOR THAT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT HE HAS CONTRIBUTED TO PROVIDENT FUND BEFORE FILING OF THE RETURN. THE SPECIAL LEAVE PETITION IS DISMISSED.' 13. IT IS CLEAR FROM THE ABOVE THAT IN VINAY CEMENT LTD.'S CASE ( SUPRA ), THE SLP PREFERRED BY THE REVENUE AGAINST THE JUDGMENT OF THE GUWAHATI HIGH COURT WAS DISMISSED MAKING THE AFOREQUOTED OBSERVATIONS. THE REASONS ARE GIVEN AND, THUS, IT AMOUNTS TO AFFIRMATION OF THE VIEW TAKEN BY THE HIGH COURT OF GUWAHATI. 14. WHEN WE KEEP THAT PROPOSITION IN MIND AND ALSO TAKE INTO CONSIDERATION VARIOUS JUDGMENTS WHERE VINAY CEMENT LTD.'S CASE ( SUPRA ) IS APPLIED AND FOLLOWED, IT WILL NOT BE POSSIBLE TO ACCEPT THE CONTENTION OF THE REVENUE. 15. IN CIT V. DHARMENDRA SHARMA [2008] 297 ITR 320 , THIS COURT SPECIFICALLY DEALT WITH THIS ISSUE AND RELYING UPON THE AFORESAID JUDGMENT OF THE GUWAHATI HIGH COURT, AS AFFIRMED BY THE SUPREME COURT IN VINAY CEMENT LTD.'S CASE ( SUPRA ), THE APPEAL OF THE REVENUE WAS DISMISSED. MORE DETAILED DISCUSSION IS C ONTAINED IN ANOTHER JUDGMENT OF THIS COURT IN CIT V. P.M. ELECTRONICS LTD. [2009] 177 TAXMAN 1 . SPECIFIC QUESTIONS OF LAW WHICH WERE PROPOSED BY THE REVENUE IN THAT CASE W ERE AS UNDER : '( A )WHETHER AMOUNTS PAID ON ACCOUNT OF PF/ESI AFTER 'DUE DATE' ARE ALLOWABLE IN VIEW OF SECTION 43B, READ WITH SECTION 36(1)( VA ) OF THE ACT? ( B )WHETHER THE DELETION OF THE 2ND PROVISO TO SECTION 43B BY WAY OF AMENDMENT BY THE FINANCE ACT, 2 003 IS RETROSPECTIVE IN NATURE' (P.2) PAGE 7 OF 9 16. THESE QUESTIONS WERE ANSWERED BY THE DIVISION BENCH IN THE FOLLOWING MANNER : '7. HAVING HEARD THE LEARNED COUNSEL FOR THE REVENUE, AS WELL AS, THE ASSESSEE, WE ARE OF THE VIEW THAT THE VIEW TAKEN BY THE TRIBUNAL DESERVES TO BE SUSTAINED AS IT IS NO LONGER RES INTEGRA IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT V. VINAY CEMENT LTD. 213 ITR 268 WHICH HAS BEEN FOLLOWED BY A DIVISION BENCH OF THIS COURT IN THE CASE OF CIT V. DHARMENDRA SHARMA [2008 ] 297 ITR 320 . 8. DESPITE THE AFORESAID JUDGMENTS, THE LEARNED COUNSEL FOR THE TRIBUNAL HAS CONTENDED THAT IN VIEW OF THE JUDGMENT OF THE DIVISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF CIT V. SYNERGY FINANCIAL EXCHANGE LTD. [2007] 288 ITR 366 AND THAT OF THE DIVISION BENCH OF THE BOMBAY HIGH COURT IN THE CASE OF CIT V. PAMWI TISSUES L TD. [2008] TAXINDIAONLINE.COM 104 (TIOL) THE ISSUE REQUIRES CONSIDERATION. ACCORDING TO US, IN VIEW OF THE DISMISSAL OF THE SPECIAL LEAVE PETITION IN THE CASE OF VINAY CEMENT LTD. ( SUPRA ) BY THE SUPREME COURT BY A SPEAKING ORDER, THE SUBMISSION OF THE LEARNED COUNSEL FOR THE REVENUE HAS TO BE REJECTED AT THE VERY THRESHOLD. THE REASON FOR THE SAME IS AS FOLLOWS: 9. THE GAUHATI HIGH COURT IN THE CASE OF CIT V. GEORGE WILLIAMSON (ASSAM) LTD. [2006] 284 ITR 619 DEALT WITH THE VERY SAME ISSUE. IN THE SAID JUDGMENT THE DIVISION BENCH OF THE GAUHATI HIGH COURT NOTED A CONTRARY VIEW TAKEN BY THE KERALA HIGH COURT IN THE CASE OF CIT V. SOUTH INDIA CORPORATION LTD. [2000] 242 ITR 114 . AFTER NOTING THE SAID JUDGMENT THE FACT THAT THE AMENDMENTS HAD BEEN MADE TO THE PROVISIONS OF SECTION 43B OF THE ACT BY VIRTUE OF FINANCE ACT, 2003 WITH EFFECT FROM 1 - 4 - 2004 IT AGREED WITH THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT BY VIRTUE OF THE OMISSION OF THE SECOND PROVISO AND THE OMISSION OF CLAUSES ( A ), ( C ), ( D ), ( E ) AND ( F ) WITHOUT ANY SAVING CLAUSE WOULD MEAN THAT THE PROVISIONS WERE NEVER IN EXISTENCE. FOR THIS PURPOSE, IN THE SAID CASE THE ASSESSEE HAD PLACED RELIANCE ON THE JUDGMENT OF A CONSTITU - TION BENCH OF THE SUPREME COURT IN THE CASE OF KOLHAPUR CANESUGAR WORKS LTD. V. UNION OF INDIA [2000] 2 SCC 536 AND RAYALA CORPORATION (P.) LTD. V. DIRECTOR OF ENFORCEMENT [1969] 2 SCC 412 AND GENERAL FINANCE CO. V. ASSTT. CIT [2002] 257 ITR 338 (SC). THE SAID SUBMISSIONS FOUND FAVOUR WITH THE DIVISION BENCH OF THE GUWAHATI HIGH COURT AND RELYING ON EARLIER DECISIONS OF ITS OWN COURT IN CIT V. ASSAM TRIBUNE [2002] 253 ITR 93 AND CIT V. BHARAT BAMBOO & TIMBER SUPPLIERS [1996] 219 ITR 212 THE DIVISION BENCH DISMISSED THE APPEAL OF THE REVENUE. IT TRANSPIRES THAT THE AFORESAID MATTER WAS TAKEN UP IN APPEAL ALONG WITH OTHER MATTERS INCLUDING VINAY CEMENT L TD.'S CASE ( SUPRA ). THE ORDER IN VINAY CEMENT LTD.'S CASE ( SUPRA ) WAS PASSED BY THE SUPREME COURT ON 7 - 3 - 2007 WHEREIN IT OBSERVED AS FOLLOWS: - 'DELAY CONDONED. IN THE PRESENT CASE WE ARE CONCERNED WITH THE LAW AS IT STOOD PRIOR TO THE AMENDMENT OF SECTION 43B. IN THE CIRCUMSTANCES, THE ASSESSEE WAS ENTITLED TO CLAIM THE BENEFIT IN SECTION 43B FOR THAT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT HE HAS CONTRIBUTED TO PROVIDENT FUND BEFORE FILING OF THE RETURN. SPECIAL LEAVE PETITION IS DISMISSED'. PAGE 8 OF 9 10. IN VI EW OF THE ABOVE, IT IS QUITE EVIDENT THAT THE SPECIAL LEAVE PETITION WAS DISMISSED BY A SPEAKING ORDER AND WHILE DOING SO THE SUPREME COURT HAD NOTICED THE FACT THAT THE MATTER IN APPEAL BEFORE IT PERTAIN TO A PERIOD PRIOR TO THE AMENDMENT BROUGHT ABOUT IN SECTION 43B OF THE ACT. THE AFORESAID POSITION AS REGARDS THE STATE OF THE LAW FOR A PERIOD PRIOR TO THE AMENDMENT TO SECTION 43B HAS BEEN NOTICED BY A DIVISION BENCH OF THIS COURT IN DHARMENDRA SHARMA'S CASE ( SUPRA ). APPLYING THE RATIO OF THE DECISION OF THE SUPREME COURT IN VINAY CEMENT LTD.'S CASE ( SUPRA ) A DIVISION BENCH OF THIS COURT DISMISSED THE APPEALS OF THE REVENUE. IN THE PASSING WE MAY ALSO NOTE THAT A DIVISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF CIT V. NEXUS COMPUTER (P.) LTD. BY A J UDGMENT DATED 18 - 8 - 2008 PASSED IN TAX CASE (A) NO. 1192/2008 DISCUSSED THE IMPACT OF BOTH THE DISMISSAL OF THE SPECIAL LEAVE PETITION IN THE CASE OF GEORGE WILLIAMSON (ASSAM) LTD. ( SUPRA ) AND VINAY CEMENT LTD.'S CASE ( SUPRA ) AS WELL AS A CONTRARY VIEW OF T HE DIVISION BENCH OF ITS OWN COURT IN SYNERGY FINANCIAL EXCHANGE'S CASE ( SUPRA ). THE DIVISION BENCH OF THE MADRAS HIGH COURT HAS EXPLAINED THE EFFECT OF THE DISMISSAL OF A SPECIAL LEAVE PETITION BY A SPEAKING ORDER BY RELYING UPON THE JUDGMENT OF THE SUPRE ME COURT IN THE CASE OF KUNHAYAMMED V. STATE OF KERALA 119 STC 505 AT PAGE 526 IN PARAGRAPH 40 AND NOTED THE FOLLOWING OBSERVATIONS: 'IF THE ORDER REFUSING LEAVE TO APPEAL IS A SPEAKING ORDER, I.E., GIVES REASONS FOR REFUSING THE GRANT OF LEAVE, THEN THE ORDER HAS TWO IMPLICATIONS. FIRSTLY, THE STATEMENT OF LAW CONTAINED IN THE ORDER IS A DECLARATION OF LAW BY THE SUPREME COURT WITHIN THE MEANING OF ARTICLE 141 OF THE CONSTITUTION. SECONDLY, OTHER THAN THE DECLARATION OF LAW, WHATEVER IS STATED IN THE ORDE R ARE THE FINDINGS RECORDED BY THE SUPREME COURT WHICH WOULD BIND THE PARTIES THERETO AND ALSO THE COURT, TRIBUNAL OR AUTHORITY IN ANY PROCEEDINGS SUBSEQUENT THERETO BY WAY OF JUDICIAL DISCIPLINE, THE SUPREME COURT BEING THE APEX COURT OF THE COUNTRY. BUT, THIS DOES NOT AMOUNT TO SAYING THAT THE ORDER OF THE COURT. TRIBUNAL OR AUTHORITY BELOW HAS STOOD MERGED IN THE ORDER OF THE SUPREME COURT REJECTING SPECIAL LEAVE PETITION OR THAT THE ORDER OF THE SUPREME COURT IS THE ONLY ORDER BINDING AS RES JUDICATA IN SUBSEQUENT PROCEEDINGS BETWEEN THE PARTIES.' 11. UPON NOTING THE OBSERVATIONS OF THE SUPREME COURT IN KUNHAYAMMED'S CASE ( SUPRA ) THE DIVISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF NEXUS COMPUTER (P.) LTD. ( SUPRA ) CAME TO THE CONCLUSION THAT THE VI EW TAKEN BY THE SUPREME COURT IN VINAY CEMENT LTD.'S CASE ( SUPRA ) WOULD BIND THE HIGH COURT AS IT WAS NOT DECLARED BY THE SUPREME COURT UNDER ARTICLE 141 OF THE CONSTITUTION. 12. WE ARE IN RESPECTFUL AGREEMENT WITH THE REASONING OF THE MADRAS HIGH COURT IN NEXUS COMPUTER (P.) LTD.'S CASE ( SUPRA ). JUDICIAL DISCIPLINE REQUIRES US TO FOLLOW THE VIEW OF THE SUPREME COURT IN VINAY CEMENT LTD.'S CASE ( SUPRA ) AS ALSO THE VIEW OF THE DIVISION BENCH OF THIS COURT IN DHARMENDRA SHARMA'S CASE ( SUPRA ). 13. IN THESE CIR CUMSTANCES, WE RESPECTFULLY DISAGREE WITH THE APPROACH ADOPTED BY A DIVISION BENCH OF THE BOMBAY HIGH COURT IN PAMWI TISSUES LTD.'S CASE ( SUPRA ). PAGE 9 OF 9 14. IN THESE CIRCUMSTANCES INDICATED ABOVE, WE ARE OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION IN THE PRESENT APPEAL. THE APPEAL IS, THUS, DISMISSED.' (P. 3) IT ALSO BECOMES CLEAR THAT DELETION OF THE 2ND PROVISO IS TREATED AS RETROSPECTIVE IN NATURE AND WOULD NOT APPLY AT ALL. THE CASE IS TO BE GOVERNED WITH THE APPLICATION OF THE 1ST PROVISO. 17. 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 WH ICH 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. INSOFAR 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 LTD.'S CASE ( SUPRA ). 7. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT AS WELL AS THE COORDINATE BENCH IN THE ABOVE CASE, WE CON FIRM THE FINDING OF THE LD. CIT (A) IN DELETING T HE ABOVE ADDITION OF RS. 6,689 6748/ ON ACCOUNT OF THE EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI AND PROFESSIONAL TAX. 8. IN THE RESULT APPE AL OF THE REVENUE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 1 3 / 0 9 / 2017 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED: 1 3 / 0 9 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI