Mahesh Agencies , Hyderabad V. Income Tax Officer, Ward-7(2) , Hyderabad

ITA 522/Hyd/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2402 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 20-10-2021
• Assessment Year: 2018-2019
• Appeal Filed On: 23-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARUCHURI DINESH
• Section: 43B; 143(1); 201; 139(1); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L . P . SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. 522 /HYD/20 20 (ASSESSMENT YEAR : 20 18 - 19 ) M/S. MAHESH AGENCIES, HYDERABAD. PAN AAYFM3615M ..APPELLANT. VS. INCOME TAX OFFICER, WARD 7(2), HYDERABAD. ..RESPONDENT. APPELLANT BY : SHRI K.C. DEVDAS. RESPONDENT BY : SHRI PARUCHURI DINESH. (D.R.) DATE OF HEARING : 20.10 . 2021. DATE OF PRONOUNCEMENT : 27 . 10 .2021. O R D E R PER SHRI S.S. GODARA, J.M. : THIS ASSESSEES APPEAL FOR A.Y. 201 8 - 19 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS) - 3, HYDERABADS ORDER DATED 31.07.2020 PASSED IN CASE NO. 2 ITA NO. 522/HYD/2020 10159/2019 - 20/B2/CIT(A) - 3 IN PROCEEDINGS U/S 143(1) OF THE INCOME TAX ACT, 1961 [IN SHORT THE ACT]. HEARD B OTH THE PARTIES. CASE FILE PERUSED. 2. THE A SSESSEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN ITS APPEAL. 3 . THE LD.CIT(A) OUGHT TO HAVE OBSERVED THAT THE ASSESSING OFFICER ERRED IN DISALLOWING RS.5,86,493 BY INVOKING THE PROVISIONS OF SECTION 36 OF THE INCOME TAX ACT AS THE PAYMENT WAS MADE AFTER COMPLETION OF THE FINANCIAL YEAR. 4 . THE LD.CIT(A) OUGHT TO HAVE NOTED THAT T HE PAYMENT OF THE SAID AMOUNT WAS MADE WITHIN THE DUE DATE ALLOWED FOR FILING OF RETURN OF INCOME AND THEREFORE THERE IS NO SCOPE FOR MAKING DISALLOWANCE OF THE SAID AMOUNT AND HENCE THE SAID ADDITION IS LIABLE TO BE DELETED. 3. COMING TO THE SOLE SUBSTAN TIVE ISSUE OF ESI/PF DISALLOWANCE OF RS. 5,86,493 , THE ASSESSEES AND REVENUES STAND IS THAT THE SAME HAS BEEN PAID BEFORE THE DUE DATE OF FILING SEC. 139(1) RETURN AND AFTER THE DUE DATE PRESCRIBED IN THE CORRESPONDING STATUTES; RESPECTIVELY. WE NOTICE IN THIS FACTUAL BACKDROP THAT THE LEGISLATURE HAS NOT ONLY INCORPORATED NECESSARY AMENDMENTS IN SECTIONS 36(VA) AS WELL AS 43B VIDE FINANCE ACT, 2021 TO THIS EFFECT BUT ALSO 3 ITA NO. 522/HYD/2020 THE CBDT HAS ISSUED MEMORANDUM OF EXPLANATION THAT THE SAME APPLIES W.E.F. 1.4.2021 ONLY. IT IS FURTHER NOT AN ISSUE THAT THE FORERGOING LEGISLATIVE AMENDMENTS HAVE PROPOSED EMPLOYERS CONTRIBUTIONS; DISALLOWANCES U/S 43B AS AGAINST EMPLOYEE U/S 36 (VA) OF THE ACT; RESPECTIVELY. HOWEVER, KEEPING IN MIND THE FACT THAT THE SAME HAS BEEN CLAR IFIED TO BE APPLICABLE ONLY WITH PROSPECTIVE EFFECT FROM 1.4.2021, WE HOLD THAT THE IMPUGNED DISALLOWANCE IS NOT SUSTAINABLE IN VIEW OF ALL THESE LATEST DEVELOPMENTS EVEN IF THE REVENUES CASE IS SUPPORTED BY THE FOLLOWING CASE LAW S . (I) CIT VS. MERCHEM LTD, [2015] 378 ITR 443(KER) (II) CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION (2014) 366 ITR 170 (GUJ.) (III) CIT VS. SOUTH INDIA CORPORATION LTD. (2000) 242 ITR 114 (KER) (IV) CIT VS. GTN TEXTILES LTD. (2004) 269 ITR 282 (KER) (V) CIT VS. JAIRAM & SONS [2004] 269 ITR 28 5 (KER) 4 ITA NO. 522/HYD/2020 4. THE IMPUGNED ESI/PF DISALLOWANCE IS DIRECTED TO BE DELETED THEREFORE. 5. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27TH OCT . , 2021. SD/ - SD/ - (L .P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 27 . 10 .2021. * REDDY GP COPY TO : 1. M/S. MAHESH AGENCIES, 13 - 6 - 434/A/1/1, PILLAR NO.82, MARUTHINAGAR, RING ROAD, HYDERABAD - 500 006 2. ITO, WARD 7(2), HYDERABAD. 3. PR. C I T - 3 , HYDERABAD. 4. CIT(APPEALS) - 3 , HYDERABAD. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.