ACIT, Circle -16(2), Hyderabaad, Hyderabad V. M/s Metrochem API Private Limited, Hyderabad

ITA 59/HYD/2015

• Counselvise Citation: 5922514 RSA 2015
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 12-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: J APPA RAO
• Section: 43B; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA.NO.59/HYD/2015 ASSESSMENT YEAR 2010-2011 ACIT, CIRCLE 16(2) HYDERABAD. VS. M/S. METROCHEM API P. LTD., HYDERABAD. PAN AADCM2691M (APPELLANT) (RESPONDENT) FOR REVENUE : MR. RAMAKRISHNA BANDI FOR ASSESSEE : MR. J. APPA RAO DATE OF HEARING : 05.05.2015 DATE OF PRONOUNCEMENT : 08.05.2015 ORDER PER P.M. JAGTAP, A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-V, HYDERABAD DATED 27.1 0.2014 WHEREBY HE DELETED THE DISALLOWANCE OF RS.18,01,713 MADE BY THE A.O. ON ACCOUNT OF BELATED PAYMENT OF EMPLOYEES CONTRIBUTION MADE BY THE ASSESSEE TOWARDS P.F., ESI AND PT (PROFESSIONAL TAX) AFTER DUE DATES PRESCRIBED IN THE RELEVANT ACTS BUT BEFORE THE DUE DATE PRESCRIBED FOR FILING THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF BULK DRUGS AND INTERMEDIARIES. THE RETURN OF INCOME FOR THE YEAR U NDER CONSIDERATION WAS FILED BY IT ON 30.09.2010 DECLARI NG TOTAL INCOME OF RS.10,17,09,283. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, IT WAS NOTICED BY THE A.O. THAT THE AS SESSEE HAS 2 ITA.NO.59/HYD/2015 METROCHEM API P. LTD., HYDERABAD. NOT REMITTED THE EMPLOYEES CONTRIBUTION TOWARDS P.F ., ESI AND PT AGGREGATING TO RS.18,01,713 TO THE GOVERNMENT AC COUNT WITHIN THE DUE DATES GIVEN IN THE RELEVANT ACTS. HE THEREFORE DISALLOWED THE BELATED PAYMENT MADE BY THE ASSESSEE TOWARDS EMPLOYEES CONTRIBUTION TO P.F. ESI AND PT RELYING O N THE PROVISIONS OF SECTION 36(1)(VA) READ WITH SECTION ( 2)(24)(X) OF THE ACT IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3 ) VIDE ORDER DATED 07.03.2012. 3. AGAINST THE ORDER PASSED BY THE A.O. UNDER SECT ION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(A) WHO DELETED THE DISALLOWANCE MADE BY THE A.O . ON ACCOUNT OF BELATED PAYMENT OF EMPLOYEES CONTRIBUTIO N TOWARDS P.F. ESI AND PT MADE BY THE ASSESSEE BEYOND THE DUE DATES PRESCRIBED IN THE RELEVANT ACTS BUT BEFORE THE DATE OF FILING OF THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATI ON RELYING ON THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENU E HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. A LTHOUGH THE LEARNED D.R. HAS RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE TRANSPOR T CORPORATION 366 ITR 170 WHEREIN A SIMILAR ISSUE IS DECIDED IN FAVOUR OF THE REVENUE KEEPING IN VIEW THE SPECIFIC PROVISIONS CONTAINED IN SECTION 36(1)(VA) READ WITH SECTION 2( 24)(X), IT IS OBSERVED THAT A SIMILAR ISSUE HAS BEEN DECIDED IN F AVOUR OF THE ASSESSEE BY THE VARIOUS HIGH COURTS IN THE FOLLOWIN G CASES WHEREIN IT HAS BEEN HELD THAT EMPLOYEES CONTRIBUTIO N TOWARDS P.F. AND ESI PAID AFTER THE DUE DATES PRESCRIBED IN THE RELEVANT ACTS BUT BEFORE THE DUE DATE FOR FILING OF RETURN O F INCOME AS 3 ITA.NO.59/HYD/2015 METROCHEM API P. LTD., HYDERABAD. PROVIDED UNDER SECTION 139 IS ELIGIBLE FOR DEDUCTIO N AS PER THE PROVISIONS OF SECTION 43B OF THE ACT. 1 CIT VS. AIMIL LTD., (2010) 321 ITR 508 (DEL.) 2. CIT VS. NIPSO POLYFABRIKS LTD., (2013) 350 ITR 327 (HP) 3. CIT VS. ALEMBIC GLASS INDUSTRIES LTD., (2005) 279 ITR 331 (GUJ.) 4. CIT AND ANOTHER VS. SABARI ENTERPRISES (2008) 298 ITR 141 (KAR.) 5. CIT VS. PAMWI TISSUES LTD., 92009) 313 ITR 137 (BOM .) 6. SPECTRUM CONSULTANTS INDIA (P.) LTD., VS. CIT (2013) 89 DTR (KAR.) 274; 7. CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD., (2014) 265 CTR 59 (RAJ) 8. CIT VS. HERNIA EMBROIDERY MILLS (P) LTD., (2014) 98 DTR (P & H) 107. 4.1. THE PREPONDERANCE OF JUDICIAL OPINION ON THE ISSUE UNDER CONSIDERATION THUS IS IN FAVOUR OF THE ASSESS EE AND FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LIMITED (88 ITR 192), W E UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) GIVING RELIEF TO THE ASSESSEE ON THIS ISSUE FOLLOWING THE VIEW TAKEN BY THE VARIOUS HIGH COURTS WHICH IS IN FAVOUR OF THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.0 5.2015. SD/- SD/- (SMT. P. MADHAVI DEVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 08 TH MAY, 2015. VBP/- COPY TO 1. ACIT, CIRCLE 16(2), ROOM NO.611, 6 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2. M/S. METROCHEM API P. LTD., FLAT NO.302, BHANU ENCL AVE, SUNDER NAGAR, ERRAGADDA, HYDERABAD 500 038. 3. CIT(A)-V, HYDERABAD 4. CIT-IV, HYDERABAD. 5. D.R. I.T.A.T. A BENCH, HYDERABAD. 6. GUARD FILE