M/s, Forte Foliage Pvt. Ltd, 217, Laxmi Complex, M.I. Road, Jaipur, Jaipur V. ACIT, Circle-1, Jaipur, Circle-1, Jaipur

ITA 617/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9760 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 01-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Keywords: Set aside
• Section: 271(1)(c); 37(1); 250; 139(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 617/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 M/S FORTE FOLIAGE PVT. LTD., 217, LAXMI COMPLEX, M.I. ROAD, JAIPUR. CUKE VS. THE ACIT, CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCF 0277 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 30/06/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 30/06/2020 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 26.02.2019 OF LD. CIT(A), JAIPUR FOR THE ASSESSMENT ORDER 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING DISALLOWANCE OF RS. 1,34,632/- ON ACCOUNT OF LATE DEPOSIT OF ESI ARBITR ARILY. THUS THE DISALLOWANCE SO MADE DESERVES TO BE DELETED. ITA NO.617/JP/2019 M/S FORTE FOLIAGE PVT. LTD. 2 2. THE HEARING OF THIS APPEAL WAS CONCLUDED THROUGH VIDEO CONFERENCE IN VIEW OF THE PREVAILING SITUATION OF C OVID-19 PANDEMIC. THE ONLY ISSUE ARISES IN THIS APPEAL OF THE ASSESSE E IS THE DISALLOWANCE OF RS. 1,34,632/- ON ACCOUNT OF LATE DEPOSIT OF ESI CONTRIBUTION. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THERE IS ONLY MINOR DELAY IN THE PAYMENT OF ESI CONTRIBUTION HOWEVER, THE PAYMENT WA S MADE BEFORE THE END OF THE FINANCIAL YEAR ITSELF AND THEREFORE, THE PAYMENT WAS MADE MUCH BEFORE THE DUE DATE OF FILING OF RETURN O F INCOME U/S 139(1) OF THE ACT. THE LD. AR OF THE ASSESSEE HAS POINTED OUT THAT THIS ISSUE IS COVERED BY THE VARIOUS DECISIONS OF THE HONBLE JUR ISDICTION HIGH COURT AS WELL AS DECISION OF HONBLE SUPREME COURT IN CAS E OF RAJASTHAN RENEWABLE ENERGY CORPORATION LIMITED WHEREIN THE SL P FILED BY THE REVENUE AGAINST THE SAID DECISION OF HONBLE JURISD ICTION HIGH COURT WAS DISMISSED BY THE HONBLE SUPREME COURT REPORTED IN 250 TAXMAN 16. 3. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE DEPARTMENT HAS NOT DISPUTED THE FACT THAT THE PAYMENT ON ACCOUNT OF ESI CONTRIBUTION WAS MADE BY THE ASSESSEE BEFORE THE END OF THE FINANCIAL YEAR RELEVANT TO TH E ASSESSMENT YEAR ITA NO.617/JP/2019 M/S FORTE FOLIAGE PVT. LTD. 3 UNDER CONSIDERATION AND THEREFORE, THE PAYMENT WAS MADE MUCH BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139( 1) OF THE ACT. AT THE OUTSET, WE NOTE THAT THIS ISSUE IS COVERED BY A SER IES OF DECISIONS OF THE HONBLE JURISDICTION HIGH COURT AS WELL AS THIS TRI BUNAL. THIS TRIBUNAL IN CASE OF M/S K.S. AUTOMOBILES LTD. VS. DCIT IN ITA N O. 1184/JP/2018 AND 1185/JP/2018 DATED 08.03.2019 HAS CONSIDERED AN IDENTICAL ISSUE IN PARA 3 AS UNDER:- 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE V ARIOUS DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT INCLUDING THE DECISION IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR 99 D TR 131 AS WELL AS DECISION IN CASE OF CIT VS. JAIPUR VIDYUT V ITRAN NIGAM LTD. 363 ITR 307 AND IN CASE OF CIT VS. UDAIPUR DUGDH UT PADAK SAHAKARI SANGH LTD. 366 ITR 163. WE FURTHER NOTE TH AT THE LD. CIT(A) THOUGH HAS NOT DISPUTED THE VARIOUS DECISION S OF HONBLE HIGH COURT HOWEVER, DISALLOWANCE MADE BY THE AO ARE SUSTAINED AS HE MISUNDERSTOOD THE DECISION OF HONBLE JURISDI CTIONAL HIGH COURT IN CASE OF PCIT VS. M/S RAJASTHAN RENEWABLE E NERGY CORPORATION LIMITED IN DB ITA NO. 10,11 & 12/2018 D ATED 13.03.2018. IN THE CASE OF PCIT VS. M/S RAJASTHAN R ENEWABLE ENERGY CORPORATION LIMITED (SUPRA) THE HONBLE HIGH COURT HAS CONSIDERED THIS ISSUE IN PARA 4 TO 6 AS UNDER:- 4. SO FAR AS QUESTION NO. 1 IS CONCERNED, THE SAME IS NOW COVERED BY THE DECISIONS OF THIS COURT IN PRINCIPAL COMMISSIONER OF INCOME-TAX V/S RAJASTHAN STATE SEED CORPORATION LTD. [2016] 386 ITR 267 (RAJ) WHEREIN IT HAS BEEN HELD AS UNDER :- IN SO FAR AS THE EXPENDITURE INCURRED ON STATE RENE WAL FUND IS CONCERNED, THE SAID EXPENDITURE ALSO GOES TO SHOW T HAT THE RENEWAL FUND WAS SET UP BY THE STATE GOVERNMENT AND WAS ITA NO.617/JP/2019 M/S FORTE FOLIAGE PVT. LTD. 4 CREATED WITH THE OBJECT OF PROVIDING A SAFETY NET F OR THE WORKERS LIKELY TO BE EFFECTED BY RESTRICTING IN THE STATE P UBLIC ENTERPRISE AND THAT A FINDING OF FACT HAS BEEN RECORDED THAT T HE CONTRIBUTION MADE TO THE STATE RENEWAL FUND IS SOLELY FOR THE PU RPOSES OF THE WELFARE AND BENEFIT OF THE EMPLOYEES. IN OUR VIEW, IT IS FOR THE ASSESSEE TO DECIDE WHETHER ANY EXPENDITURE SHOULD B E INCURRED IN THE COURSE OF BUSINESS AND EXPENDITURE OF THIS NATU RE BEING FOR BUSINESS EXPEDIENCY IS CERTAINLY ALLOWABLE DEDUCTIO N UNDER SECTION 37(1) OF THE ACT. IN OUR VIEW ANY NORMAL EX PENDITURE FOR THE WELFARE AND BENEFIT OF THE EMPLOYEES IS ALLOWAB LE EXPENDITURE UNDER SECTION 37(1), THE TRIBUNAL HAS COME TO A FIN DING OF FACT THAT IT WAS A LEGAL OBLIGATION OF THE RESPONDENT-AS SESSEE TOWARDS CONTRIBUTION OF THE SAID AMOUNT TO THE STATE RENEWA L FUND AND THERE BEING A LEGAL OBLIGATION AS WELL IN OUR VIEW THE TRIBUNAL HAS COME TO A CORRECT CONCLUSION. IN VIEW OF THE ABOVE, QUESTION NO. 1 IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE DEPARTMENT. 6. WITH REGARD TO ISSUE NO. 2 AND 3 THE CONTROVERSY IS PENDING BEFORE THE SUPREME COURT IN C.I.T., JAIPUR VS/ MS S TATE BANK OF BIKANER AND JAIPUR IN SLP NO. 16249/2014, THEREFOR E, SUBJECT TO DECISION OF SLP, FOR THE PRESENT, THESE ISSUES ARE DECIDED ON IN FAVOUR OF THE DEPARTMENT AND AGAINST THE ASSESSEE. IT WILL BE OPEN FOR THE DEPARTMENT TO RECOVER THE AMOUNT IF TH E DECISION IS IN THEIR FAVOUR. THUS, IT IS CLEAR THAT THE HONBLE JURISDICTIONAL H IGH COURT HAS FOLLOWED THE EARLIER DECISIONS IN CASE OF PCIT VS. RAJASTHAN STATE SEED CORPORATION LIMITED 386 ITR 267 AS WELL AS DEC ISION IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR (SUPRA). ALL THESE DECISIONS WHICH WERE OLLOWED BY THE HONBLE JURISDI CTIONAL HIGH COURT ARE IN FAVOUR OF THE ASSESSEE HOWEVER, IN THE CONCLUSION IN PARA 6 THERE IS A TYPOGRAPHICAL MISTAKE WHEREIN IT IS STATED THESE ISSUES DECIDED IN FAVOUR OF THE DEPARTMENT AND AGAI NST THE ASSESSEE. THE WHOLE DECISION OF THE HONBLE HIGH C OURT HAS TO ITA NO.617/JP/2019 M/S FORTE FOLIAGE PVT. LTD. 5 BE CONSIDERED IN THE CONTEST OF THE DECISION FOLLOW ED AND THE SUBSEQUENT LINE WHICH SAYS IT WILL BE OPENED FOR T HE DEPARTMENT TO RECOVER THE AMOUNT IF THE DECISION IN THEIR FAV OUR WHICH MEANS THAT IN CASE OF FURTHER APPEAL BEFORE HONBLE SUPREME COURT IF DECISION IS DELIVERED IN FAVOUR OF THE DEP ARTMENT IT CAN RECOVER THE AMOUNT. THEREFORE, EVEN THE DECISION WH ICH IS RELIED UPON THE LD. CIT(A) THE SAME IS IN FAVOUR OF THE AS SESSEE THOUGH DUE TO TYPOGRAPHICAL MISTAKE IT WAS MISUNDERSTOOD B Y THE LD. CIT(A) AS IN FAVOUR OF THE REVENUE. ACCORDINGLY, IN VIEW OF A SERIES OF DECISIONS OF THE HONBLE JURISDICTIONAL H IGH COURT IN FAVOUR OF THE ASSESSEE AND FURTHER HONBLE SUPREME COURT IN CASE OF PCIT VS. RAJASTHAN STATE BEVERAGES CORPORATION L TD. 250 TAXMANN 16 HAS DISMISSED THE SLP FILED BY THE DEPAR TMENT THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAI NST THE REVENUE. HENCE, DISALLOWANCES/ADDITIONS MADE BY THE AO ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF & ESI ARE D ELETED. THERE IS NO DISPUTE THE APPEAL OF THE ASSESSEE FILE D THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT WAS DISMISSED BY T HE LD. CIT(A) WHEN NOBODY HAS ATTENDED THE PROCEEDING DESPITE 12 OPPORTUNITIES WERE GIVEN BY THE LD. CIT(A). WE FURT HER, NOTE THAT OUT OF THESE 12 OPPORTUNITIES THE DATE OF HEARING U PTO 1212.04.2018 WERE PRIOR TO THE DISPOSAL OF THE QUAN TUM APPEAL OF THE ASSESSEE BY THIS TRIBUNAL, THEREFORE, IT WAS AP PROPRIATE TO WAIT FOR OUTCOME OF THE QUANTUM PROCEEDING THOUGH I T IS NOT NECESSARY. THE LD. CIT(A) HAS NOT DECIDED THE ISSUE BY SPEAKING BUT DISMISSED THE APPEAL OF THE ASSESSEE SUMMARILY FOR WANT OF ANY ATTENDANCE ON BEHALF OF THE ASSESSEE. IT IS PER TINENT TO NOTE THAT BEFORE THE IMPUGNED ORDER WAS PASSED BY THE LD . CIT(A) THE APPEAL OF THE ASSESSEE IN THE QUANTUM PROCEEDING WA S DECIDED BY THIS TRIBUNAL AND THEREFORE, THE OBSERVATIONS AN D FINDINGS OF THE TRIBUNAL IN THE QUANTUM PROCEEDING OUGHT TO HAV E BEEN CONSIDERED WHILE DECIDING THE APPEAL AGAINST THE PE NALTY ORDER. THIS TRIBUNAL IN THE QUANTUM RELIEF HAS GRANTED PAR T RELIEF TO THE ASSESSEE AND THEREFORE, THE SAID ORDER BECOMES RELE VANT FOR DECIDING THE PENALTY APPEAL. THESE FACTS AND CIRCUM STANCES OF THE ITA NO.617/JP/2019 M/S FORTE FOLIAGE PVT. LTD. 6 CASE WHEN THE LD. CIT(A) HAS NOT CONSIDERED BY THIS TRIBUNAL IN THE QUANTUM APPEAL WHILE PASSING THE IMPUGNED ORDER THE MATTER IS REQUIRED TO BE RECONSIDERED AFTER GIVING OPPORTU NITY OF HEARING TO THE ASSESSEE AS WELL AS CONSIDERING THE ORDER OF THIS TRIBUNAL IN THE QUANTUM PROCEEDINGS. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER AND REMAND THE MATTER TO THE RECORD OF THE LD. CIT(A) FOR DECIDING THE SAME FRESH AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY IN VIEW OF THE DECISION OF THIS TRIBUNA L AS WELL AS DECISION OF HONBLE HIGH COURT AND HONBLE SUPREME COURT WHEREB Y THE SLP FILED BY THE DEPARTMENT WAS DISMISSED WE DECIDE THIS ISSU E IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE DISALLOWANCE/ ADDITION MADE BY THE AO IS DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30/06/2020. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/06/2020. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S FORTE FOLIAGE PVT. LTD., JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-1, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) ITA NO.617/JP/2019 M/S FORTE FOLIAGE PVT. LTD. 7 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 617/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR