Deputy Commissioner of Income Tax Circle-1(1)(2), Bangalore V. M/s Building Control Solutions India Pvt Ltd , Bangalore

ITA 527/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1094 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SIDDAPPAJI
• Assessee Lawyers: CHAVALI NARAYANA
• Keywords: Revised return
• Section: 143(3); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE S HRI SUNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI JASON P BOAZ , ACCOUNTANT MEMBER I.T . A. NO. 527 /BANG/20 18 (ASSESSMENT YEAR : 20 14 - 15 ) DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(2) , BANGALORE. . APPELLANT. VS. M/S. BUILDING CONTROL SOLUTIONS INDIA PVT. LTD., NO.794, 1 ST CROSS, 12 TH MAIN, HAL 2 ND STAGE, INDIRANAGAR, BANGALORE - 560 008 . .. RESPONDENT. APPELLANT BY : SHRI SIDDAPPAJI, ADDL. CIT (D.R) R E SPONDENT BY : SHRI CHAVALI NARAYANA, C.A. DATE OF H EARING : 10.09.2018. DATE OF P RONOUNCEMENT : 14 .09 .201 8 . O R D E R PER SHRI JASON P BOAZ, A .M . : THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , BANGALORE DT. 30.10.201 7 FOR THE ASSESSMENT YEAR 20 14 - 15. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER : - 2 IT A NO. 527 /BANG/20 18 2. 1 THE ASSESSEE, A COMPANY ENGAGED IN THE BUSINESS OF MAN POWER SUPPLY, PARKING MANAGEMENT SYSTEMS AND CONSULTANCY, FILED ITS RETURN FOR ASSESSMENT YEAR 2014 - 15 ON 29.11.2014 DECLARING A LOSS OF ( - ) RS.3,75,45,118. A REVISED RETURN WAS FILED ON 29.3.2016 DECLARING A LOSS OF ( - ) RS.3,33,09,556. THE CASE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE INCO ME TAX ACT, 1961 (IN SHORT 'THE ACT') VIDE ORDER DT.25.11.2016; WHEREIN THE ASSESSEE'S LOSS WAS DETERMINED AT ( - ) RS.2,05,84,617 IN VIEW OF DISALLOWANCE OF AN AMOUNT OF RS.1,48,68,815 ON ACCOUNT OF DISALLOWANCE OF BELATED PAYMENT / REMITTANCE OF EMPLOYEES CONTRIBUTION TO PF AS PER THE PROVISIONS OF SEC. 2(24)(X) R.W.S. 36(1)(VA) OF THE ACT. ON APPEAL, THE LEARNED CIT (APPEALS) VIDE THE IMPUGNED ORDER DT.30.10.2017 ALLOWED THE ASSESSEE'S CLAIM FOR BEING ALLOWED DEDUCTION IN RESPECT OF EMPLOYEES CONTRIBUTION TO PF AS IT WAS REMITTED BEFORE THE DUE DATE FOR SUBMISSION OF RETURN OF INCOME. IN COMING TO THIS FINDING, THE LEARNED CIT (APPEALS) PLACED RELIANCE ON THE DECISIONS OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. SABARI ENTERPRISES (2008) 298 ITR 141 (KAR) AND MAGUS CUSTOMER S DIALOG P. LTD. VS. CIT (317 ITR 242) (KAR). 3 IT A NO. 527 /BANG/20 18 3.1 REVENUE, BEING AGGRIEVED BY THE ORDER OF THE CIT (APPEALS) 1, BANGALORE DT.31.10.2017, FOR ASSESSMENT YEAR 2014 - 15 HAS PREFERRED THIS APPEAL, WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS : - THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REVENUE WAS HEARD IN SUPPORT OF THE GROUNDS RAISED (SUPRA). 3.2 PER CONTRA, THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ISSUE FOR CONSIDERATION, I.E . THE ALLOWABILITY OF DEDUCTION IN RESPECT OF BELATED REMITTANCES OF EMPLOYEES CONTRIBUTION TO PF PAID OVER BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME; IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST REVENUE BY THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR 4 IT A NO. 527 /BANG/20 18 ASSESSMENT YEAR 2013 - 14 DT.1.6.2018; FOLLOWING THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF ESSAE TERAOKA P. LTD. VS. DCIT (2014) 366 ITR 408 (KAR) AND CIT VS. MAGUS CUSTOMERS DIALO G P. LT D. (SUPRA). 3.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JUDICIAL PRONOUNCEMENTS CITED (SUPRA). THE ISSUE OF DISALLOWANCE RELATING TO BELATED PAYMENTS OF EMPLOYEES CONTRIBUT ION TO PF PAID BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME, IS NO LONGER RES INTEGRA AND IS SETTLED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF ESSAE TERAOKA P. LTD (SUPRA) AND MAGUS CUSTOMERS DIAL OG P. LTD (SUPRA); WHERE THE HON'BLE HIGH COURT HAS EXAMINED THE SCHEME OF THE ACT, FOR COMING TO THE CONCLUSION THAT IF THE EMPLOYEES CONTRIBUTION WITH RESPECT TO PF / ESI ARE MADE PRIOR TO THE DUE DATE OF FILING OF THE RETURN OF INCOME, THEN THE SAME S HALL BE ALLOWED. SINCE THERE IS NO DISPUTE WITH REFERENCE TO THE FACT THAT THE ASSESSEE HAS DEPOSITED THE EMPLOYEES CONTRIBUTION TO PF BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME, WE, RESPECTFULLY FOLLOWING THE DECISION OF THE 5 IT A NO. 527 /BANG/20 18 HON'BLE KARNATAKA HIGH COURT IN THE CASE OF ESSAE TERAOKA P. LTD. (SUPRA) AND MAGUS CUSTOMERS DIALOG P. LTD. (SUPRA), DISMISS THE GROUND NOS.1 TO 4 RAISED BY REVENUE IN THIS APPEAL. 4. IN THE RESULT, REVENUE S APPEAL FOR ASSESSMENT YEAR 2014 - 15 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 14TH DAY OF SEPT.,2 01 8 . SD/ - ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER SD/ - ( JASON P BOAZ ) ACCOUNTANT M EMBER BANGALORE, DT. 14 .09 .2018 . *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.