Brijbasi Art Press Ltd., New Delhi V. ACIT, New Delhi

ITA 5938/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97993 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: NARESH AGARWAL
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. KULDIP SINGH , JM ITA NO. 5938 /DEL/2013 : ASSTT. YEAR : 2010 - 11 BRIJBASI ART PRESS LTD., E - 46/ 11, OKHLA INDL. AREA, PHASE - II, NEW DELHI - 110020 VS DCIT, CIRCLE - 3( 1 ) , C.R. BUILDING, NEW DELHI - 110002 (APPELLANT) (RESPONDENT) PAN NO . AAA CB0044L ASSESSEE BY : SH. NARESH AGARWAL, ADV. REVENUE BY : SH. K. K. JAISWAL , DR DATE OF HEARING : 01 .10 .2015 DATE OF PRONOUNCEMENT : 26 .11 .2015 ORDER PER N. K. SAINI, AM : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 30.09.2013 OF LD. LD. CIT(A) - V I, NEW DELHI . 2. THE ONLY GROUND RAISED IN THIS APPEAL READ S AS UNDER: WHETHER THE LD. ASSESSI NG OFFICER AS WELL AS LD. CIT(A) WERE JUSTIFIED IN ADDING AND CONFIRMING RESPECTIVELY RS. 390372.00 TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF DELAYED PAYMENT OF PROVIDENT FUND AND ESIC (EMPLOYEE SHARE) U/S 43B O F THE INCOME TAX ACT, 1961. 3 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 06.10.2010 DECLARING AN INCOME OF RS. 69,61,130/ - WHICH ITA NO . 5938 /DEL /201 3 BRIJBASI ART PRESS LTD. 2 WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) ON 13.04.2011. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE DEPOSITED PF & ESI AFTER THE DUE DATE AS PRESCRIBED IN SECTION 36 OF THE ACT AMOUNTING TO RS. 3,49,380/ - AND RS . 40,992/ - RESPECTIVELY. HE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THESE EXPENSES BE NOT DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. IN RESPONSE THE ASSESSEE SUBMITTED AS UNDER: LATE DEPOSIT OF PF & ESI: - THE ASSESSEE HAS DEPOSITED PROVIDENT FUND (EMPLOYEE CONTRIBUTION) AS UNDER: - A) RS. 173858 ON 11.08.99 FOR THE MONTH OF JULY 2009 BUT THE BANK HAS ISSUED THE RECEIPT DATED 28.05.2009. B) SIMILARLY THE ASSESSEE HAS DEPOSITED RS. 175522.00 ON 06.10.2009 BUT THE BANK ISSUED THE RECEIPT DATED 21.10.2 009 FOR THE MONTH OF SEPT. 2009. C) SIMILARLY THE ASSESSEE HAS DEPOSITED ESI FOR THE MONTH JULY 2009 AMOUNTING TO RS. 19936.00 (EMPLOYEE SHARE) ON 11.08.2009 FOR WHICH THE BANK HAS ISSUED THE RECEIPT DATED 27.08.2009. D) SIMILARLY THE ASSESSEE HAS DEPOSITED ESI FOR THE MONTH OF SEPT. 2009 AMOUNTING TO RS. 21056.00 (EMPLOYEE SHARE) ON 12.10.2009 FOR WHICH THE BANK HAS ISSUED THE RECEIPT DATED 21.10.2009. THUS THE ASSESSEE HAS DEPOSITED THE AMOUNT IN TIME BUT THE BANK HAS ISSUED THE RECEIPT LATE OR THE CHEQUES HAV E BEEN REALIZED ON THE LATE DATE. ITA NO . 5938 /DEL /201 3 BRIJBASI ART PRESS LTD. 3 THE AO HOWEVER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND MADE THE ADDITION OF RS. 3,90,372/ - 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE AMOUNT HAD BEEN D EPOSITED BEFORE DUE DATE OF FILING OF RETURN ON 06.10.2010 WHICH WAS EXTENDED DUE DATE FOR FILING THE RETURN OF INCOME . IT WAS FURTHER SUBMITTED THAT AN AMOUNT OF RS. 3,49,380/ - ON ACCOUNT OF P.F AND RS. 40,992/ - ON ACCOUNT OF ESI WERE DEPOSITED BELATEDLY IN THE MONTH OF AUGUST, 2009 AND OCTOBER, 2009 RESPECTIVELY BUT MUCH BEFORE THE FILING OF RETURN OF INCOME. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: CIT VS VINAY CEMENT LTD. (2009) 313 ITR (ST.) 1 (SC) CIT VS AIMIL LTD. 321 ITR 508 (DEL) CIT V S ALOM EXTRUSIONS LTD. 319 ITR 306 (SC) CIT MEERUT VS SIR SHADI LAL ENTERPRISES LTD. 317 ITR 449 (ALL) KUBEL INNGES PVT. LTD. VS ITO (2009) 120 TTJ 284 (DEL) 6. THE LD. CIT(A) DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING THAT THE PRO VISIONS OF SECTION 43B OF THE ACT WERE NOT APPLICABLE IN THE CASE OF THE E MPLOYEE S C ONTRIBUTION TO THE PROVIDENT FUND AND OTHER WELFARE FUNDS. HE FURTHER OBSERVED THAT THE EMPLOYEES CONTRIBUTION DEDUCTED BY THE EMPLOYER WAS FIRST TO BE TREATED AS INCOME U/S 2(24)(X) OF THE ACT AND IF THE EMPLOYEES CONTRIBUTION IS DEPOSITED LATE, THE DEDUCTION WILL NEVER BE ALLOWED. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: ITA NO . 5938 /DEL /201 3 BRIJBASI ART PRESS LTD. 4 CIT VS MADRAS RADIATORS & PRESSINGS LTD. (2003) 264 ITR 620 (MAD) DCIT VS ASHIKA STOCK BRO KING LTD. (2011) 56 DTR 417 (KOL) DCIT VS BENGAL CHEMICALS & PHARMACEUTICALS LTD. (2011) 46 SOT 33 (KOL) 7. THE LD. CIT(A) WHILE CONFIRMING THE ACTION OF THE AO ALSO OBSERVED AS UNDER: AS IT CLEARLY EMERGES THAT THE TERM DUE DATE AS APPEARING IN SECTI ON 36(1)(VA) READ WITH EXPLANATION SPECIFIES THE DUE DATE AS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN EMPLOYER TO CREDIT AN EMPLOYEE S CONTRIBUTION UNDER THE EMPLOYEES ACCOUNT TO THE RELEVANT FUND, UNDER ANY ACT, RULE, ORDER OR NOTIFICATION ISSUED THERE UNDER OR UNDER ANY STANDING ORDER, AWARD, CONTRACT OF SERVICE OR OTHERWISE. AS REGARDS DEDUCTION FOR CONTRIBUTION TOWARDS A RECOGNIZED PROVIDENT FUND OR AN APPROVED SUPERANNUATION FUND BY THE ASSESSEE AS AN EMPLOYER, THE SAME IS GOVERNED BY PROVISION S OF SECTION 36(1)(IV) AND AS REGARDS DEDUCTION FOR CONTRIBUTION TOWARDS AN APPROVED GRATUITY FUND BY THE ASSESSEE AS AN EMPLOYER, THE SAME IS GOVERNED BY THE PROVISIONS OF SECTION 36(1)(V) AND NOT BY THE PROVISIONS OF SECTION 36(1)(VA). THEREFORE, THE TER M DUE DATE AS SPECIFIED IN THE EXPLANATION TO SECTION 36(1)(VA) DOES NOT REFER TO THE DUE DATE FIXED FOR FILING THE RETURN OF INCOME UNDER SECTION 139(1). HENCE THE DUE DATE AS FIXED FOR FILING THE RETURN OF INCOME UNDER SECTION 139(1) CANNOT BE READ I NTO THE EXPLANATION TO SECTION 36(1)(VA). IN THE INSTANT CASE, THERE IS NO DISPUTE THAT THE ASSESSEE COMPANY HAS NEITHER CREDITED THE IMPUGNED CONTRIBUTION RECEIVED BY IT FROM ITS EMPLOYEES TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND NOR IT HAS DONE SO ON OR BEFORE THE DUE DATE SPECIFIED IN THE EXPLANATION TO SECTION 36(1)(VA). FURTHER, SECTION 43B READ WITH THE AMENDED PROVISO 1 ALSO DOES NOT APPLY IN ITA NO . 5938 /DEL /201 3 BRIJBASI ART PRESS LTD. 5 RESPECT OF THE EMPLOYEES CONTRIBUTION AS IT IS APPLICABLE ONLY WHEN A DEDUCTION IS OTHERWISE ALLOWAB LE UNDER THE I.T. ACT. THEREFORE, THE CLAIM OF THE APPELLANT IN THE INSTANT MATTER UNDER APPEAL IS HELD NOT TENABLE. THE DUE DATE FOR CREDITING ANY SUM RECEIVED BY THE ASSESSEE FROM HIS EMPLOYEES AS CONTRIBUTION TOWARDS ANY PROVIDENT FUND OR SUPERANNUATI ON FUND OR ANY FUND FOR THE WELFARE OF THE EMPLOYEES BY THE EMPLOYER ASSESSEE TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS MUST BE ONE SPECIFIED IN EXPLANATION TO SECTION 36(1)(VA) AND NOT THE DUE DATE OF FILING RETURN OF INCOME U/S 139(1) OF THE ACT. THEREFORE, THE ASSESSEE GETS NO RELIEF ON THIS GROUND OF APPEAL. 8. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AMOUNT IN QUESTION WAS DEPOSITED BEFORE FILING RETURN OF INCOME. THEREFORE, AS PER THE PROVISIONS OF SECTION 43B OF THE ACT THE ASSESSEE WAS ENTITLED FOR DEDUCTION AND THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO. THE RELIANCE WAS PLACED ON THE DECISION OF THE ITAT F BENCH , NEW DELHI IN ITA NO. 3984/DEL/2013 FOR THE ASSESSMENT YEAR 2002 - 03 IN THE CASE OF DCIT VS PAGE POINT SERVICE (INDIA) PVT. LTD. , ORDER DATED 22.05.2015 ( COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON THE RECORD ) . 9 . IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO . 5938 /DEL /201 3 BRIJBASI ART PRESS LTD. 6 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS INVOLVED IN THE CASE OF DCIT VS PAGE POINT SERVICE (INDIA) PVT. LTD. (SUPRA) WHEREIN RELEVANT FINDINGS HAS BEEN GIVEN IN PARAS 11 & 12 OF THE ORDER DATED 22.05.2015 WHICH READ AS UNDER: 11. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE RECORDS OF THE CASE AND WE FIND THAT IN THE ASSESSMENT ORDER AO HAS CATEGORICALLY STATED THE AMOUNT DUE FOR WHICH MONTH IN RESPECT OF EPF AND ESI DEPOSITS AND HAS STATED THE DUE DATES FOR THESE DEPOSITS TO HAVE BEEN DEPOSITED AND ON WHICH DATE ACTUALLY THESE DEPOSITS WERE MADE BY THE ASSESSEE. THE DATES OF DEPOSITS ARE MENTIONED BETWEEN 05 TH JULY 2001 TO 26 TH APRIL 2002. WE FIND THAT THE LATEST PAYMENT IS MADE ON 26TH APRIL 2002 AND ASSESSEE BEING A LIMITED COMPANY HAD FILED ITS RETURN ON 20TH O CTOBER, 2002, SO THE ASSESSEE HAD DEPOSITED THE AMOUNT BEFORE THE DUE DATE OF FILING OF THE RETURN. THUS, IT IS CLEAR BEYOND DOUBT THAT ALL THE PAYMENTS WHICH HAVE BEEN DISALLOWED WERE MADE MUCH EARLIER TO THE DUE DATE OF FILING OF THE RETURN. THE DISALLOW ANCE IS NOT MADE BY THE AO ON THE GROUND THAT THERE IS NO PROOF OF MAKING SUCH PAYMENT BUT DISALLOWANCE IS MADE ONLY ON THE GROUND THAT THESE PAYMENTS HAVE BEEN MADE BEYOND THE DUE DATES OF MAKING THESE PAYMENTS AS STIPULATED 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 STATED TO BE THE DATES OF DEPOSITS IN THE ASSESSMENT ORDER. IN SUCH A SCENARIO, ACCORDING LAW CLARIFIED BY HON'BLE SUPREME COURT IN THE CASE OF CIT VS VI NAY CEMENT LTD, THAT NO DISALLOWANCE COULD BE MADE IF THE PAYMENTS ARE MADE BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. THIS ISSUE CAME BEFORE HON'BLE SUPREME ITA NO . 5938 /DEL /201 3 BRIJBASI ART PRESS LTD. 7 COURT IN THE CASE OF CIT VS. VINAY CEMENT LTD. WHICH WAS A SPECIAL LEAVE PETITION FILED B Y 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 ITS ORDER DATED 7TH MARCH, 2007. THE OBSERVATIONS OF THEIR LORDSHIPS ON THE ISSUE ARE AS UNDER: 'IN THE PRESENT CASE WE ARE CONCERNED WITH THE LAW AS IT STOOD PRIOR TO THE AMENDMENT OF SEC. 43B. IN THE CIRCUMSTANCES THE ASSESSEE WAS ENTITLED TO CLAIM THE BENEFIT IN SEE 43B FOR THAT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT HE HAS CONTRIBUTED TO PR OVIDENT FUND BEFORE FILING OF THE RETURN. THE SPECIAL LEAVE PETITION IS DISMISSED.' 11. THE LD AR RELIED ON THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LIMITED, REPORTED IN 321 ITR 508, WHEREIN THE HON BLE HIGH COURT HAS H ELD AS UNDER: - 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 (SUPRA). ITA NO . 5938 /DEL /201 3 BRIJBASI ART PRESS LTD. 8 12. RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE HIGH COURT, WE ARE INCLINED TO DISMISS THE APPEAL FILED BY THE REVENUE. 11. IN THE PRESENT CASE ALSO THE ASSESSEE MADE THE PAYMENT OF PF & ESI BEFORE FILING THE RETURN OF INCOME, SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER IN ITA NO. 3984/DEL/2013 FOR THE ASSESSMENT YEAR 2002 - 03 IN THE CASE OF DCIT, CC - 1, NEW DELHI VS PAGE POINT SERVICE (INDIA) PVT. LTD., NEW DELHI (SUPRA). WE DELETE THE DISALLOWANCE MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A). 12 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ( ORDER PRON OUNCED IN THE COURT ON 26 /11 /2015 ) SD/ - SD/ - (KULDIP SINGH ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 /11 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEAL S) 5. DR: ITAT ASSISTANT REGISTRAR