ACIT, UDAIPUR V. M/s. Builder Engineer & Company, UDAIPUR

ITA 526/JODH/2013

• Counselvise Citation: 52623314 RSA 2013
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 14-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Reassessment proceedings
• Section: 43B; 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 526/JODH/2013 (A.Y. 2007-08) ACIT, CIRCLE-2, VS. M/S. BU ILDER ENGINEER & CO. UDAIPUR. 121-KHAROL COLONY, UDAIPUR. PAN NO. AABFB 2530 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 07/04/2014. DATE OF PRONOUNCEMENT : 23/05/2014. O R D E R PER N.K. SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 20/08/2013 OF LD. CIT(A), UDAIPUR. THE FOLLOWING G ROUNDS HAVE BEEN RAISED IN THIS APPEAL: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN:- 1. DELETING THE ADDITION OF RS. 20,97,210/- MADE BY THE AO ON ACCOUNT OF CONTRACT RECEIPT NOT OFFERED FOR TAXATION WITHO UT APPRECIATING THE FACTS THAT AS PER MERCANTILE SYSTEM OF ACCOUNTING T HE ASSESSEE WAS REQUIRED TO INCLUDE CONTRACT RECEIPT OF RS. 20,97,2 10/- IN CONTRACT 2 RECEIPT SHOWN IN THE P & L ACCOUNT AND FURTHER THE ASSESSEE HAS FAILED TO PROVIDE THE DOCUMENTARY EVIDENCE IN RESPECT OF S AID CONTRACT RECEIPT NOT OFFERED FOR TAXATION. 2. DELETING THE ADDITION OF RS. 11,707/- MADE BY TH E AO ON ACCOUNT OF THE DISALLOWANCE OF DELAYED PAYMENT OF THE EMPLOYEE S CONTRIBUTION TOWARDS PF WITHOUT APPRECIATING THE FACTS THAT AS PER PROVISION OF SECTION 36(1)(VA) R.W.S. 2(24)(X) THAT IF EMPLOYEE S CONTRIBUTIONS TOWARDS PF ARE PAID AFTER DUE DATE THAN THEY SHALL BE DISALLOWED. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DEL ETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING. 2 THE FIRST ISSUE VIDE GROUND NO. 1 RELATES TO THE D ELETION OF ADDITION OF RS. 20,97,210/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CONTRACT RECEIPTS. 3. FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT T HE ASSESSEE FILED THE RETURN OF INCOME SHOWING INCOME OF RS. 14,14,916/- WHICH WAS PROCESSED AT THE SAME INCOME AND LATER ON THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE I.T. ACT, 1961 (HEREINAFTER R EFERRED TO AS THE ACT IN SHORT) ON 30/09/2009 AT AN INCOME OF RS. 14,14,9 16/-. SUBSEQUENTLY, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE AS SESSEE HAD SHOWN CONTRACT RECEIPTS OF RS. 2,76,15,376/- IN ITS PROFI T & LOSS ACCOUNT WHEREAS THE TOTAL CONTRACT RECEIPTS WERE AT RS. 3,00,12,586 /- AS PER TDS CERTIFICATE. THUS, ACCORDING TO THE ASSESSING OFFI CER, THE ASSESSEE FAILED TO DISCLOSE ITS CONTRACT RECEIPTS TRUELY AND RS. 20 ,97,210/- ESCAPED ASSESSMENT. THE ASSESSING OFFICER THEREFORE, RESOR TED TO ACTION UNDER 3 SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER SECT ION 148 OF THE ACT ON 19/09/2001 REQUIRING THE ASSESSEE TO FILE ITS RETUR N. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE STATED THAT THE RETURN AL READY FILED ON 20/10/2007 BE TREATED AS ITS RETURN FILED IN RESPON SE TO THE NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSING OFFICER DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE H AD CLAIMED THE CREDIT FOR TDS ON THE CONTRACT RECEIPTS OF RS. 3,00 ,12,586/- AND THE SAME SHOULD HAVE BEEN DECLARED BECAUSE OF THE FACT THAT THE ASSESSEE WAS MAINTAINING ITS ACCOUNT ON MERCANTILE SYSTEM OF ACC OUNTING. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE DIFFERENCE IN THE CONTRACT RECEIPTS DECLARED IN THE PROFIT & L OSS ACCOUNT AND AS PER CERTIFICATES SHOULD NOT BE ADDED TO THE TOTAL INCOM E OF THE ASSESSEE. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT WORK OF RS. 17,75,494/- OF RSMML WAS GIVEN ON SUB-CONTRACT BASIS TO M/S. AKRATI CONSTRUCTION PVT. LTD. AND THE ASSESSEE HAD SHOWN N ET INCOME OF RS. 37,256/- FROM THIS CONTRACT INSTEAD OF GROSS RECEIP TS. IT WAS FURTHER STATED THAT M/S. PI INDUSTRIES, FURNANCE AND HINDUS TAN ZINC LTD. HAD DEDUCTED TDS ON SERVICE TAX AMOUNT WHICH WAS NOT PA RT OF GROSS RECEIPTS OF CONTRACT. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE HAS TO SHOW GROSS RECEIPTS IN 4 PROFIT & LOSS ACCOUNT IN RECEIPTS SIDE AND THEN THE ASSESSEE CAN CLAIM EXPENDITURE ON ACCOUNT OF SUB-CONTRACT, BUT THE AS SESSEE HAD SHOWN NET PROFIT IN THE PROFIT & LOSS ACCOUNT WHICH WAS NOT C ORRECT, TAKING INTO ACCOUNT THE PREVALENT ACCOUNTING POLICY. AS REGARD S TO THE CONTENTION OF THE ASSESSEE THAT PI INDUSTRIES, FURNANCE AND HINDU STAN ZINC LTD., DEDUCTED TDS ON SERVICE TAX AMOUNT WHICH WAS NOT PA RT OF THE GROSS RECEIPTS OF THE CONTRACT. THE ASSESSING OFFICER M ENTIONED THAT THE TDS CERTIFICATE DID NOT MENTION ANYTHING IN THIS RESPEC T AND THAT THE ASSESSEE HAD NOT FILED ANY EVIDENCE TO CONFIRM THAT THE CONT RACT RECEIPTS FROM THOSE COMPANIES INCLUDED THE SERVICE TAX AMOUNT AND THEY DEDUCTED TDS ON SERVICE TAX ALSO. THE ASSESSING OFFICER ADDED A SUM OF RS. 20,97,210/- BY OBSERVING THAT THE ASSESSEE HAD SHOWN LESS CONTR ACT RECEIPTS. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A) AND SUBMITTED AS UNDER:- THAT THE LD. ACIT CIRCLE-2, UDAIPUR WAS WRONG IN RE OPENING THE CASE U/S 148 AS WELL AS MAKING THE ADDITION OF SAME RECEIPTS TO THE TOTAL I NCOME ALREADY DISCUSSED AND ACCEPTED IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) ON 30.0 9.2009 UNDER SCRUTINY, HENCE ORDER PASSED U/S 147 R.W.S 143 (3) OF IT ACT IS BAD IN LA W. 02.REGARDING RECEIPT FROM RSMML FOR RS. 17.71.494/: - THIS WORK WAS GIVEN ON SUBCONTRACT BASIS TO IWS AAKRATI CONSTRUCTION PVT L IMITED (A COPY OF AGREEMENT & WORK ORDER ARE ENCLOSED). AS PER AGREEMENT, THE ASSESSEE IS ENTITLED TO GET ONLY 2% SUB CONTRACT INCOME OF GROSS RECEIPT, WE REFER PARA I O F 3.1.3 OF ORDER U/S 147 R.W.S 143 (3), THAT THE LD. ACIT CIRCLE-2 HAS NO DOUBT THAT INCOME/PROFIT O F THIS RECEIPT HAS NOT BEEN SHOWN IN PROFIT AND LOSS ACCOUNT. 5 THE ASSESSEE HAS SHOWN NET SUB CONTRACT INCOME OF R S. 37,256/- IN PROFIT & LOSS ACCOUNT (ANNEXURE A OF P& L ACCOUNT) FROM THIS CONTRACT RECEIPT. IT I S CLEAR THAT THERE IS NO INCOME ESCAPED TO TAX ON THIS CONTRACT RECEIPTS AND THE LD. ACIT CIRCLE-2, U DAIPUR WAS WRONG IN ADDING ENTIRE GROSS RECEIPT TO THE TOTAL INCOME OF THE ASSESSEE. THE LD. ACIT CIRCLE-2, UDAIPUR HAS MENTIONED IN ORD ER THAT AS PER ACCOUNTING POLICY, THE ASSESSEE HAS TO SHOW GROSS RECEIPTS IN P & L IN RECEIPT SIDE AND THEN ASSESSEE CAN CLAIM EXPENDITURE ON ACCOUNT OF SUB CONTRACT. IN THIS RESPECT A LEDGER A CCOUNT, SUB LEDGER ACCOUNT, COPY OF AGREEMENT AND TDS CERTIFICATES (COPY ENCLOSED) WERE SUBMITTED TO THE LD. ACIT CIRCLE 2, TRANSACTION DETAILS WERE ALSO VERIFIED FROM BANK STATEMENT (COPY OF LET TER IS ENCLOSED) AND THE PAYMENT MADE TO M/S AAKRTI CONSTRUCTION ON ACCOUNT OF SUBCONTRACT WAS NOT DOUBTED BY LD. ACIT CIRCLE 2 UDAIPUR, TDS HAS ALSO BEEN DED UCTED ON SUB CONTRACT WORK (COPY ENCLOSED) AND NET IMPACT OF RECEIPTS HAS BEEN SHOWN IN PROFIT AND LOSS ACCOUNT. BOOKS OF ACCOUNT ARE ALSO AUDITED AND THE ASSESSEE FOLLOWED MERCANTILE SYSTEM OF ACCOUNTING HENCE THERE IS NO CONTRAVENTION OF ACCOUNTING STANDARD, ASSESSEE HAS CORRECTLY SHOWN NET SUB CONTRACT INCOME IN PROFIT AND LOSS ACCOUNT AND NO INCOME ESCAPED TO TA X FROM THIS RECEIPTS. BY LOOKING TO THE ABOVE FACTS, YOUR HONOUR IS REQUESTED TO DELETE THE ENTIR E ADDITION OF RS. 17,71,494/- OS.REGARDING RECEIPTS FROM PI INDUSTRIES, FURNACE A ND HINDUSTAN ZINC LIMITED:- TDS CERTIFICATE RECEIPTS ALSO INCLUDE SERVICE TAX AMOUNT, WHICH IS PAYABLE TO THE GOVERNMENT AND THE ASSESSEE HAS SHOWN NET RECEIPTS AFTER DEDUCTING SERVICE TAX AMOUNT. ENTIRE AMOUNT OF SERVICE TAX PAID TO THE GOVERNMENT DURING THE YEAR WAS ALREADY VERIFIED VIDE ANNEXURE'H'OF3CD. REGARDING FURTHER EVIDENCE THE ASSESSEE HAS ALSO SU BMITTED ALL THE LEDGER ACCOUNT (COPY ENCLOSED), IN WHICH IT IS CLEARLY MENTIONED THAT ASSESSEE HAS SHOWN NET RECEIPTS AFTER DEDUCTING SERVICE TAX AMOUNT WHICH IS PAYABLE TO THE GOVT, AND SO CAN NOT BE TREATED AS INCOME OF THE ASSESSEE. THE LD. ACIT CIRCLE-2, UDAIPUR HAS .MENTIONED IN OR DER, THAT 'AUDIT REPORT WAS EXAMINED. NOTHING WAS MENTIONED ABOUT DIFFERENCE IN CONTRACT RECEIPT IN AUDIT REPORT BY AUDITOR, WHICH CAN PROVE THE. DIFFERENCE'. IN THIS RESPECT W E REFER ANRROR&H TO FORM 3CD & PARA 21(II) OF SCD AND SCHEDULE 'P' & 'R' OF BALANCE SHE ET (COPY ENCLOSED), IN WHICH THE AUDITOR CLEARLY MENTIONED THAT 'IN SOME WORK IDS DE DUCTED INCLUDING SERVICE TAX AMOUNT HENCE NOT FORM PART OF THE GROSS WORK AND ONLY RS. 74121/- SERVICE TAX WHICH HAS NOT BEEN REIMBURSED BY THE PRINCIPAL HAS BEEN DEBITED TO THE PROFIT AND LOSS ACCOUNT'. IT CLEARLY SHOWS THAT REMAINING DIFFERENCE AMOUNT HAS NOT BEEN DEBIT ED TO PROFIT AND LOSS ACCOUNT WHICH IS REIMBURSED BY PRINCIPAL AND THE SAME CANNOT BE CONS IDERED AS INCOME OF THE ASSESSEE. HENCE, THE LD. ACIT CIRCLE-2, UDAIPUR WAS WRONG IN ADDING DIFFERENCE OF SERVICE TAX AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. BY LOOKING TO THE ABOVE FAC TS, YOUR HONOUR IS REQUESTED TO DELETE THE ENTIRE ADDITION. 6 5. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE HAD SUBLET ITS CONTRACT WORK OF RS. 17,71,494/- TAKEN FROM RSMML TO M/S. AKRATI CON STRUCTION PVT. LTD. ON THE BASIS OF AGREEMENT DATED 25/09/2005. HE FUR THER OBSERVED THAT AS PER ABOVE AGREEMENT, ASSESSEE-COMPANY WILL CHARG E2% ON THE CONTRACT WORK PERFORMED AND ACCORDINGLY, THE PROFIT OF THIS CONTRACT WORK WAS DECLARED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOU NT AND THIS HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AT THE TIME OF OR IGINAL ASSESSMENT AS WELL AS IN THE REASSESSMENT PROCEEDINGS UNDER SECTI ON 147/143(3) OF THE ACT. THE LD. CIT(A) FURTHER OBSERVED THAT COPY OF LEDGER ACCOUNT OF M/S. AKRATI CONSTRUCTION PVT. LTD. AS APPEARING IN THE B OOKS OF ACCOUNTS OF THE ASSESSEE REVEALED THAT THE ASSESSEE HAD RECEIVED CO NTRACT PAYMENT OF RS. 17,71,494/- I.E. RS. 10,91,494/- ON 30/06/2006 AND RS. 6,80,000/- ON 30/11/2006 AND THEN AFTER DEDUCTING THE ASSESSEES PROFIT AS PER AGREEMENT, THE BALANCE OF SUB-CONTRACT AMOUNT RECEI VED FROM RSMML HAD BEEN TRANSFERRED TO THE ABOVE CONCERN NAMELY AKRATI CONSTRUCTION PVT. LTD. AFTER DEDUCTING THE TDS ON SUCH SUB-CONTRACT. THE LD. CIT(A) CATEGORICALLY STATED THAT THE ASSESSING OFFICER NEV ER DISPUTED THESE FACTS IN HIS ASSESSMENT ORDER AND M/S. AKRATI CONSTRUCTIO N PVT. LTD. UDAIPUR HAD DECLARED THE CONTRACT RECEIPTS IN ITS BOOKS OF ACCOUNTS AS PER 7 SCHEDULE 14 RELATING TO GROSS RECEIPTS FROM CONTRAC T WORK. THEREFORE, THE SAID COMPANY HAD OFFERED THE RECEIPTS OF CONTRACT F OR TAXATION IN ITS HAND AND THE SAME COULD NOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. 6. AS REGARDS TO THE REMAINING AMOUNT OF RS. 3,25,706 /-, THE LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAD MADE ADHOC ADDITION WITHOUT APPRECIATING FULL FACTS OF THE CASE AS PER THE DETAILS FURNISHED IN ANNEXURE-H OF FORM NO. 3CD, WHICH REVEALED THAT THI S AMOUNT PERTAINED TO THE SERVICE TAX REIMBURSED BY THE CONCERNED COMP ANY ON WHICH THE SAID COMPANY HAD DEDUCTED TAX AT SOURCE AND THE ASS ESSEE HAD DEPOSITED THE SERVICE TAX IN THE GOVT. ACCOUNT. SO, IT COULD NOT BE CONSIDERED AS RECEIPTS IN THE HANDS OF THE ASSESSEE. ACCORDINGLY , THE ADDITION OF RS. 20,97,210/- WAS DELETED. NOW THE DEPARTMENT IS IN APPEAL. 7. LEARNED D.R. STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACTS 8 IN RIGHT PERSPECTIVE MADE THE ADDITION AND THE LD. CIT(A) AFTER VERIFYING FROM THE RECORD, CAME TO THE CONCLUSION THAT THE AM OUNT OF RS. 17,71,494/- WAS RELATING TO SUB-CONTRACT GIVEN TO M /S. AKRATI CONSTRUCTION PVT. LTD. ON THE BASIS OF AGREEMENT DA TED 25/09/2005 AND AFTER DEDUCTING THE ASSESSEES PROFIT AS PER AGREEM ENT, BALANCE OF SUB- CONTRACT AMOUNT RECEIVED FROM RSMML HAD BEEN TRANSF ERRED TO THE ABOVE CONCERN NAMELY M/S. AKRATI CONSTRUCTION PVT. LTD. AND THE SAID COMPANY ALSO OFFERED THE SAID AMOUNT FOR TAXATION, THEREFOR E, THE ADDITION MADE BY THE ASSESSING OFFICER WAS NOT JUSTIFIED. AS REG ARDS TO THE REMAINING AMOUNT OF RS. 3,25,706/-, THE LD. CIT(A) AFTER VERI FICATION CAME TO THE CONCLUSION THAT THIS AMOUNT PERTAINED TO THE SERVIC E TAX DEPOSITED BY THE ASSESSEE IN THE GOVT. ACCOUNT. THEREFORE, THIS ADD ITION WAS ALSO MADE WRONGLY BY THE ASSESSING OFFICER AND THE LD. CIT(A) RIGHTY DELETED THE SAME. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT S EE ANY MERIT IN GROUND NO. 1 OF THE DEPARTMENTAL APPEAL. 9 . THE SECOND ISSUE VIDE GROUND NO. 2 RELATES TO THE DELETION OF ADDITION OF RS. 11,707/- MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF DISALLOWANCE OF DELAYED PAYMENT OF EMPLOYEES CONTRI BUTION TOWARDS PF. 10 . FACTS RELATING TO THIS ISSUE, IN BRIEF, ARE THAT THE ASSESSING OFFICER DISALLOWED THE IMPUGNED AMOUNT BY OBSERVING THAT TH E ASSESSEE 9 DEPOSITED RS. 11,707/- OF EMPLOYEES CONTRIBUTION BE YOND THE PRESCRIBED DATE WHEREAS THE PROVISIONS OF SECTION 36(1)(VA) R. W.S. 2(24)(X) OF THE ACT CLEARLY PROVIDES THAT IF EMPLOYEES CONTRIBUTION IS PAID AFTER DUE DATE, THEN IT SHALL NOT BE ALLOWABLE AND BE TREATED AS AS SESSEES INCOME. THE ASSESSING OFFICER DID NOT ACCEPT THIS SUBMISSION OF THE ASSESSEE THAT AS PER THE PROVISIONS OF SECTION 36(1)(A) OF THE ACT, THE DEDUCTION IS ALLOWABLE OF ANY SUM RECEIVED BY THE ASSESSEE FROM ANY OF THIS EMPLOYEES TO WHICH PROVISIONS OF SECTION 2(24) OF THE ACT APP LY IF THE SAME IS CREDITED BY THE ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND ON OR BEFORE DUE DATE SPECIFIED THEREIN. 11 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE DELAY IN PAYMENT WAS FOR A F EW DAYS ONLY, BUT IT WAS PAID IN THE SAME FINANCIAL YEAR AS WELL AS BEFO RE THE DUE DATE OF FILING THE RETURN OF INCOME. HENCE, IT WAS ALLOWAB LE EXPENDITURE. 12. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, OBSERVED THAT AS PER THE AMENDMENT BROUGHT INTO THE STATUTE, DEDUCTION IS ALLOWABLE IF THE SAME HAS BEEN PAID BEFORE THE T IME ALLOWED FOR FILING THE RETURN OF INCOME UNDER SECTION 139(1) OF THE AC T. HE FURTHER OBSERVED THAT IN ASSESSEES CASE, THE AMOUNT OF PF COLLECTED FROM THE 10 EMPLOYEES WAS DEPOSITED DURING THE FINANCIAL YEAR R ELEVANT TO THE ASSESSMENT YEAR ITSELF AND THEREFORE, THERE WAS NO CASE FOR MAKING THE ADDITION. NOW THE DEPARTMENT IS IN APPEAL. 13 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES ON THIS ISSUE, IN OUR OPINION, THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) DO NOT REQUIRE ANY INTERFERENCE ON OUR PART BECAUSE IN THI S CASE, THE ASSESSEE DEPOSITED THE PROVIDENT FUND WITHIN THE FINANCIAL Y EAR ITSELF AND BEFORE FILING THE RETURN UNDER SECTION 139(1) OF THE ACT. 14 . ON A SIMILAR ISSUE, THE HON'BLE KARNATAKA HIGH CO URT IN THE CASE OF CIT AND ANOTHER VS. M.N. CHARI (2009) 310 ITR 445 HAS HELD AS UNDER:- THAT THE CONTRIBUTIONS MADE BY THE ASSESSEE WERE ALLOWABLE DEDUCTIONS EVEN THOUGH THEY WERE MADE BEYOND THE ST IPULATED PERIOD UNDER SECTION 36(1)(VA) OF THE INCOME-TAX ACT, 1961 , READ WITH SECTION 2(24)(X) AND SECTION 43B AS THE AMOUNTS WERE PAID B Y THE ASSESSEE ON OR BEFORE THE DUE DATE FOR FURNISHING THE RETURN UN DER SECTION 139(1) OF THE ACT. 15. NOW, THIS ISSUE HAS BEEN SETTLED BY THE HON'BLE SU PREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD. (2009) 319 ITR 306 , WHEREIN THEIR LORDSHIP AT PAGES 315 & 316 HAVE HELD AS UNDER:- LASTLY, WE MAY POINT OUT THE HARDSHIP AND THE INV IDIOUS DISCRIMINATION WHICH WOULD BE CAUSED TO THE ASSESSEE(S) IF THE CON TENTION OF THE DEPARTMENT IS TO BE ACCEPTED THAT THE FINANCE ACT, 2003, TO THE ABOVE 11 EXTENT, OPERATED PROSPECTIVELY. TAKE AN EXAMPLE-IN THE PRESENT CASE, THE RESPONDENTS HAVE DEPOSITED THE CONTRIBUTIONS WI TH THE R.P.F.C. AFTER MARCH, 31 (END OF THE ACCOUNTING YEAR) BUT BEFORE F ILING OF THE RETURNS UNDER THE INCOME-TAX ACT AND THE DATE OF PAYMENT FA LLS AFTER THE DUE DATE UNDER THE EMPLOYEES PROVIDENT FUND ACT, THEY WILL BE DENIED DEDUCTION FOR ALL TIMES. IN VIEW OF THE SECOND PRO VISO, WHICH STOOD ON THE STATUTE BOOK AT THE RELEVANT TIME, EACH OF SUCH ASSESSEE(S) WOULD NOT BE ENTITLED TO DEDUCTION UNDER SECTION 43B OF T HE ACT FOR ALL TIMES. THEY WOULD LOSE THE BENEFIT OF DEDUCTION EVEN IN TH E YEAR OF ACCOUNT IN WHICH THEY PAY THE CONTRIBUTIONS TO THE WELFARE FUN DS, WHEREAS A DEFAULTER, WHO FAILS TO PAY THE CONTRIBUTION TO THE WELFARE FUND RIGHT UP TO APRIL, 2004, AND WHO PAYS THE CONTRIBUTION AFTER APRIL 1, 2004, WOULD GET THE BENEFIT OF DEDUCTION UNDER SECTION 43B OF T HE ACT. IN OUR VIEW, THEREFORE, THE FINANCE ACT, 2003, TO THE EXTENT IND ICATED ABOVE, SHOULD BE READ AS RETROSPECTIVE. IT WOULD, THEREFORE, OPE RATE FROM APRIL 1, 1988, WHEN THE FIRST PROVISO WAS INTRODUCED. IT IS TRUE THAT PARLIAMENT HAS EXPLICITLY STATED THAT THE FINANCE ACT, 2003, W ILL OPERATE WITH EFFECT FROM APRIL 1, 2004. HOWEVER, THE MATTER BEFORE US INVOLVES THE PRINCIPLE OF CONSTRUCTION TO BE PLACED ON THE PROVISIONS OF T HE FINANCE ACT, 2003. 16. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY MERIT IN TH IS APPEAL OF THE DEPARTMENT. 17. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSE D. (ORDER PRONOUNCED IN THE COURT ON 23 RD MAY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD MAY, 2014. VR/- 12 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.