AUTOMOBILES PRODUCTS OF INDIA LTD, CHENNAI V. ASST CIT RG 10(3), MUMBAI

ITA 7584/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3549 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 26-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: VASANTI B PATEL
• Keywords: Bonafide belief
• Section: 43B; 143(3)

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.7584 /MUM/2013 ( / ASSESSMENT YEAR : 2003-04) AUTOMOBILE PRODUCTS OF INDIA LIMITED, 63-A, NORTH PHASE, SIDCO INDUSTRIAL ESTATE, AMBATTUR, CHENNAI 600 098. / V. ASSISTANT COMMISSIONER OF INCOME TAX- RANGE 10(3), MUMBAI.. ./ PAN : AABCA0725C ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY MS. VASANTI B. PATEL REVENUE BY : SHRI A. RAMACHANDRAN / DATE OF HEARING : 08-06-2016 / DATE OF PRONOUNCEMENT : 17-08-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE COMPANY, BEING I TA NO. 7584/MUM/2013, IS DIRECTED AGAINST APPELLATE ORDER DATED 3 RD OCTOBER, 2013 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)- 22, MUMBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSME NT YEAR 2003-04, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARI SING FROM THE PENALTY ORDER DATED 26 TH MARCH, 2012 PASSED BY THE LEARNED ASSESSING OFFICE R (HEREINAFTER CALLED THE AO) U/S 271(1)(C) OF THE INCOME TAX A CT,1961 (HEREINAFTER CALLED THE ACT). ITA7584/MUM/2013 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE CO MPANY IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL , MUMBAI (HEREINAFTER CALLED THE TRIBUNAL) READS AS UNDER:- 1. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL) - 22 [THE CIT (A)] EARED IN UPHOLDING THE IMPOSING THE PENALTY U/S 271 (1) (C) AN AMOUNT OF RS.9,94,122/- ON ACCOUNT OF DISALLOWANCE OF PF AN D ESIC PAYMENT U/S 43B. HE HAS NOT APPRECIATED THE DISCLOSURE WERE MADE IN FULL AND PROPER MANNER IN THE AUDIT REPORT IN FORM 3CD ALONG WI TH RETURN OF INCOME. FURTHER APPELLANT HAS OFFERED A BONA FIDE EXPLANATION THAT IT WAS IN BIFR PROCEEDINGS, AND THAT THE PF & ESIC AUTHORITIES S PECIFICALLY ALLOWED THE APPELLANT TO MAKE PAYMENT IN INSTALLMENT. THE APPELLANT PRAYS THAT THE IMPOSING PENALTY TO BE DELE TED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY FILED RETURN OF INCOME FOR THE CAPTIONED ASSESSMENT YEAR ON 28-11-2 003 DECLARING A LOSS OF RS.3,37,20,850/- . 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT, IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 6,22,02,224/- TOWARDS PAYMENT AND PRO VISIONS FOR EMPLOYEES. THE A.O. CALLED FOR THE DETAILS OF EXPENSES COMPRIS ED IN THE ABOVE EXPENSES WHICH ARE TO BE ALLOWED ON PAYMENT BASIS U/S 43B OF THE ACT. IT WAS OBSERVED BY THE A.O. THAT AN AMOUNT OF RS. 84,66,25 5/- WERE COVERED UNDER THE PROVISIONS OF SECTION 43B OF THE ACT WHICH REMA INED UNPAID AS ON DATE OF THE FILING OF THE RETURN OF INCOME AND OUT OF THE S AME THE ASSESSEE HAD DISALLOWED OF ITS OWN AN AMOUNT OF RS. 56,81,600/- U/S 43B OF THE ACT IN THE COMPUTATION OF INCOME FILED WITH THE RETURN OF INCO ME. WHEN THE ASSESSEE WAS ASKED FOR EXPLANATION AS TO WHY THE BALANCE AMO UNT OF RS. 27,84,655/- SHOULD NOT BE DISALLOWED AS THE SAME WAS NOT PAID B EFORE THE DUE DATE OF ITA7584/MUM/2013 3 FILING OF RETURN U/S 139(1) OF THE ACT AND IS THUS HIT BY THE PROVISIONS OF SECTION 43B OF THE ACT , THE ASSESSEE SUBMITTED THA T THE COMPANY WENT INTO BIFR IN THE YEAR 1992 AND THE SCHEME OF REVIVAL WAS ANNOUNCED IN THE YEAR 1996 AND DUE TO THE PRECARIOUS FINANCIAL CONDITION OF THE ASSESSEE , THE ASSESSEE TOOK PERMISSION OF PF AND ESIC AUTHORITIES TO PAY THE DUES IN INSTALLMENTS. HOWEVER, AS PER THE A.O. SINCE THE S AID AMOUNT COULD BE ALLOWED AS A DEDUCTION U/S 43B OF THE ACT ONLY IN T HE YEAR IN WHICH IT IS PAID, THE SAID AMOUNT OF RS. 27,84,655/- WAS DISALLOWED AND PENALTY PROCEEDINGS WERE INITIATED U/S 271 (1)(C) OF THE ACT FOR CONCEA LING THE PARTICULARS OF INCOME AND OF FURNISHING OF INACCURATE PARTICULARS OF INCO ME WERE INITIATED BY THE REVENUE. THE PENALTY NOTICES WERE ISSUED TO THE ASSESSEE BY THE AO . THE ASSESSEE DID NOT FURNISHED ANY EXPLANATION AS TO WHY PENALTY U/S 271(1)(C) OF THE ACT SHOULD NOT BE LEVIED. THE A.O. OBSERVED THAT THE C ONTENTIONS OF THE ASSESSEE HAVE NO MERIT. THE ASSESSEE HAS NOT FURNISHED THE FULL FACTS WITH REGARD TO THE DISALLOWANCE U/S 43B OF THE ACT EITHER IN THE A UDIT REPORT IN FORM 3CD OR IN THE STATEMENT OF COMPUTATION OF INCOME FILED WIT H THE REVENUE. IT IS ONLY WHEN THE ASSESSEE WAS ASKED , THE ASSESSEE CAME OUT WITH EXPLANATION. THE A.O. OBSERVED THAT THE ASSESSEE COULD NOT FURNISH A NY EVIDENCE IN RESPECT OF THE CLAIM THAT THE SAID PAYMENTS WERE ALLOWED TO BE PAID IN INSTALLMENTS BY PF/ESIC AUTHORITIES. THE ASSESSEE ALSO COULD NOT E XPLAIN AS TO HOW EVEN IF THE AUTHORITIES HAVE ALLOWED THE ASSESSEE TO PAY TH E SAID AMOUNT IN INSTALLMENTS , THEN THE PROVISION OF SECTION 43B O F THE ACT ARE NOT ATTRACTED AND THE SAID AMOUNT WILL NOT BE DISALLOWED KEEPING IN VIEW EXPRESS MANDATE OF SECTION 43B OF THE ACT. THE ASSESSEE FAILED TO FURNISH CONVINCING INFORMATION AND FAILED TO SUBSTANTIATE THAT THE EXP LANATION GIVEN WAS BONA FIDE AND WAS NOT AN AFTERTHOUGHT, THUS IN THE OPINI ON OF THE AO, THE ASSESSEE HAS FAILED TO FURNISH THE EXPLANATION AS ARE REQUIR ED AS PER MANDATE OF ITA7584/MUM/2013 4 SECTION 271(1)(C) OF THE ACT TO COME OUT OF CLUTCHE S OF PENALTY LEVIABLE. THE A.O. RELIED ON THE FOLLOWING DECISIONS:- 1. K.P. MADHUSUDAN V. CIT, (2001)251 ITR 99 (SC) 2. RAGHUVIR SONI V. ACIT, (2002) 258 ITR 239 (RAJASTHA N HC) 3. UOI V. DHARMENDRA TEXTILES (2008) 174 TAXMAN 571(SC ) THE AO DISTINGUISHED THE RELIANCE PLACED BY THE ASS ESSEE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. RELIANC E PETROPRODUCTS PRIVATE LIMITED (2010) 189 TAXMAN 322(SC) . THUS, PENALTY W AS LEVIED BY THE A.O. U/S 271(1)(C) OF THE ACT OF THE MINIMUM AMOUNT COMP UTED @ 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE , VIDE PENALTY ORDERS DATED 26-03-2012 PASSED BY THE AO U/S 271(1)(C) OF THE ACT. 4. AGGRIEVED BY THE PENALTY ORDER DATED 26-03-2012 PASSED BY THE A.O. U/S 271(1)(C) OF THE ACT, THE ASSESSEE FILED APPEAL BEF ORE THE LD. CIT(A) . 5. BEFORE THE LEARNED CIT(A) , THE ASSESSEE MADE THE F OLLOWING SUBMISSIONS:- THE APPELLANT WAS REGISTERED UNDER BIFR IN 1992 AND SCHEME OF REVIVAL WAS ANNOUNCED IN 1996. THE APPELLANT'S FINAN CIAL CONDITION WAS PRECARIOUS. IN THE CIRCUMSTANCES THE APPELLANT HAD TAKE N APPROVAL FROM THE PF AND ESIC AUTHORITIES TO PAY THE DUES UNDER THE RESPECTIVE LAWS IN INSTALLMENTS. THE PF AND ESIC AUTHORITIES HAD GRANTED NECESSARY PERMISSIONS AND PERMITTED THE APPELLANT TO P AY THE DUES IN INSTALLMENTS. THE APPELLANT WAS UNDER A BONAFIDE AND G ENUINE BELIEF THAT ANY AMOUNT DUE TOWARDS EMPLOYERS CONTRIBUTION TOWARD S PF AND ESIC IS NOT PAYABLE SINCE INSTALLMENT HAS BEEN GRANTED UNDER THE RESPECTIVE STATUTES. PROVISIONS OF S. 43B ARE ATTRACTED ONLY IN CASE ANY AMOUNT IS PAYABLE. IF THE AMOUNT IS NOT PAYABLE ON ACCOUNT OF INSTALLMENTS GR ANTED, PROVISIONS OF S. 43B ARE NOT ATTRACTED. ITA7584/MUM/2013 5 THUS IT WOULD BE SEEN THAT THE APPELLANT HAD NEITHER CO NCEALED THE PARTICULARS OF INCOME NOR FURNISHED INACCURATE PARTI CULARS OF INCOME. THE FACTUM OF INSTALLMENTS BEING GRANTED BY THE PF AND ESIC AUTHORITIES IS NOT IN DISPUTE. THE ONLY ISSUE IS WHETHE R THE EMPLOYERS CONTRIBUTION TOWARDS PF AND ESIC CAN BE SAID TO BE DUE AND PAYABLE WHEN INSTALLMENTS HAVE BEEN GRANTED BY THE AUTHORITIES UNDER THE RESPECTIVE STATUTE. THE AO HAS INVOKED THE PROVISIONS OF S. 43B FOR THE REASON THAT DEDUCTION IS AVAILABLE ONLY IF THE PF AND ESIC IS PAID. THE APPELLANTS CONTENTION IS THAT THE PROVISIONS OF S. 43B CAN BE INVOKED IN CASE ANY AMOUNT DUE IS PAYABLE. THUS THE DIFFERENCE IN BETWEEN THE AO AND THE APPELLANT IS ONLY ON THE INTERPRETATION OF PROV ISIONS OF S. 43B. IT IS SUBMITTED THAT THE PROVISIONS OF S. 43B PROVIDE FOR DISALLOWANCE WHERE ANY 'SUM IS PAYABLE'. THUS THE ISSUE OF DISALL OWANCE U/S. 43B IS HIGHLY DEBATABLE AND PENALTY U/S. 271(1)(C) IS UNCAL LED FOR. RELIANCE IS PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS LTD. 322 ITR 158 AND CIT V MS K CONSTRUCTIONS P. LTD. 2961TR 18 (MAD). THE LD. CIT(A) REJECTED THE CONTENTION OF THE ASSES SEE AS THE ASSESSEE HAS NOT PAID THE DUES AMOUNTING TO RS. 27,84,655/- TO THE P F/ESIC BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF TH E ACT, HENCE THE SAID EXPENSE CANNOT BE ALLOWED AS DEDUCTION. WITH RESPECT TO TH E CONTENTION OF THE ASSESSEE THAT THE COMPANY HAS BECOME SICK AND IT WA S REGISTERED WITH BIFR IN 1992 AND THE APPROVAL HAS BEEN OBTAINED FROM PF/ ESIC AUTHORITIES BUT THE SAME DOES NOT GIVE ANY EXEMPTION FROM PROVISION S OF SECTION 43B OF THE ACT WAS THE OBSERVATIONS OF THE LEARNED CIT(A) WHIL E CONFIRMING THE PENALTY LEVIED BY THE AO. THE LD. CIT(A) HELD THAT THE CON TENTION OF THE ASSESSEE THAT THE DIFFERENCE BETWEEN THE A.O. AND THE ASSESSEE WA S ON ACCOUNT OF INTERPRETATION OF SECTION 43B OF THE ACT IS HIGHLY A DEBATABLE ISSUE AND HENCE PENALTY ON SUCH ADDITION IS NOT WARRANTED IS ALSO D EVOID OF MERITS. THE LEARNED CIT(A) HELD THAT THE ASSESSEE HAS NOT BROUG HT ON RECORD ANY MATERIAL TO SHOW THAT IT PAID THE ABOVE DUES AMOUNTING TO RS .27,84,655/- WITHIN THE DUE DATE GRANTED UNDER THE INSTALLMENT SCHEME APPRO VED BY THE PF/ESIC AUTHORITIES. THE ASSESSEE PLACED RELIANCE IN THE CASE OF RELIANCE PETROPRODUCTS PRIVATE LTD., 322 ITR 158 AND CIT V. MSK CONSTRUCTIONS P. LTD., 296 ITR 18 (MAD.) BUT THE FACTS ARE DIFFERENT AND HENCE DISTINGUISHABLE. ITA7584/MUM/2013 6 THE LD. CIT(A) ACCORDINGLY UPHELD THE ACTION OF THE A.O. AS IN HIS OPINION THE ASSESSEE HAS NOT ONLY FURNISHED INACCURATE PARTICUL ARS BUT ALSO THERE IS AN ATTEMPT TO CONCEAL THE INCOME AND HENCE EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE , WHEREBY PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT WAS CONFIRMED BY LEARNED CIT(A) VIDE APPELLATE ORDERS DATED 03-10-2013 PASSED BY LEARNED CIT(A). 6. AGGRIEVED BY THE APPELLATE ORDER DATED 03-10-2013 P ASSED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.O. LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT ON DELAY IN DEPOS IT OF EMPLOYER CONTRIBUTION OF PF/ESIC AMOUNTING TO RS. 27,84,655/- AS THE ASSE SSEE HAS NOT DEPOSITED THE MONEY BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME . THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE HAS BEEN DECLARED AS A SICK COMPANY IN 1992 AND SCHEME OF REVIVAL WAS DECLARED IN 1996. THE LD . COUNSEL SUBMITTED THAT SINCE THE FINANCIAL CONDITION OF THE ASSESSEE WAS P RECARIOUS , THE ASSESSEE OBTAINED APPROVAL FROM PF/ESIC AUTHORITIES TO THE P AY THE DUES UNDER PF/ESIC LAWS IN INSTALLMENTS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE INCURRED HUGE LOSS OF R S.3.37 CRORES IN THIS YEAR ALSO. THE ASSESSEE RELIED UPON THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. S.M. CONSTRUCTION, [2015] 60 TAX MANN.COM 135 (BOMBAY), ITAT AHMADABAD BENCH DECISION IN THE CASE OF GUJARA T STATE ROAD TRANSPORT CORPORATION V. ACIT, [2012] 19 TAXMANN.COM 253 (AHD .) AND THE DECISION OF HONBLE HIGH COURT OF PUNJAB AND HARYANA IN THE CAS E OF CIT V. NATIONAL INSTITUTE OF TECHNICAL TEACHER TRAINING OF RESEARCH , [2014] 50 TAXMANN.COM 107 (PUNJAB & HARYANA). 8. THE LD. D.R., ON THE OTHER HAND, SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. ITA7584/MUM/2013 7 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING CASE LAWS RELIED UPON BY BOTH THE PARTIES. WE HAVE OBSERVED THAT ASSESSEE WAS A SICK COMPANY WHIC H WAS REGISTERED WITH BIFR IN 1992 AND SCHEME OF REVIVAL WAS APPROVED IN 1996. THE ASSESSEE HAD DEFAULTED ON THE PAYMENTS OF EMPLOYER CONTRIBUTIONS OF RS.27,84,655/- UNDER PF/ESIC LAWS TO PF/ESIC AUTHORITIES AND THE SAME WE RE NOT PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) O F THE ACT BUT STILL DEDUCTION OF RS.27,84,655/- WAS CLAIMED BY THE ASSESSEE IN TH E RETURN OF INCOME FILED WITH THE REVENUE IN VIOLATION OF PROVISIONS OF SECT ION 43B OF THE ACT. THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD OBTAINED A PPROVAL FROM THE PF AND ESIC AUTHORITIES TO PAY THE AFORE-STATED DUES UNDER INSTALLMENTS SCHEME AND THE ASSESSEE HAS DULY COMPLIED WITH THE TERMS AND C ONDITIONS OF THE INSTALLMENT SCHEME APPROVED BY THE PF/ESIC AUTHORIT IES AND HENCE NO AMOUNT WAS DUE FOR PAYMENT BY THE ASSESSEE IN VIEW OF THE APPROVED INSTALLMENT SCHEME. THE ADDITIONS WERE MADE TO THE INCOME OF THE ASSESSEE U/S 43B OF THE ACT BY THE REVENUE AS THE ASSESSEE C OULD NOT PRODUCE THE EVIDENCE THAT IT HAS COMPLIED WITH THE INSTALLMENT SCHEME APPROVED BY THE PF/ESIC AUTHORITIES, AS WELL ALSO THAT DESPITE INST ALLMENT SCHEME APPROVED BY PF/ESIC AUTHORITIES FOR PAYMENT OF EMPLOYERS CO NTRIBUTION TOWARDS PF/ESIC DUES, THE ASSESSEE COULD NOT EXPLAIN THAT H OW STILL SECTION 43B OF THE ACT IS COMPLIED WITH AS THE SAID SECTION STIPUL ATES PAYMENT TO BE MADE BEFORE THE DUE DATE PRESCRIBED FOR FILING OF RETURN OF INCOME U/S. 139(1) OF THE ACT WHICH CLEARLY THE ASSESSEE COMPANY DID NOT COMP LIED WITH SO FAR AS EMPLOYER CONTRIBUTION TOWARDS PF/ESIC AGGREGATING T O RS. 27,84,655/- IS CONCERNED. THE REVENUE HAS LEVIED PENALTY U/S 271( 1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT ADDED THE SAID AMO UNT OF RS.27,84,655/- ON ACCOUNT OF NON-PAYMENT OF EMPLOYER CONTRIBUTION TOWARDS PF/ESIC BEFORE THE DUE DATE OF FILING OF RETURN U/S 139(1) OF THE ACT TO INCOME OF THE ASSESSEE AS PER THE CLEAR PROVISIONS OF SECTION 43B OF THE A CT. THE ASSESSEE HAS COME ITA7584/MUM/2013 8 OUT WITH THE EXPLANATION THAT THE ASSESSEE WAS UNDE R THE BONAFIDE BELIEF THAT THE ASSESSEE HAS OBTAINED APPROVAL OF INSTALLMENT S CHEME FROM PF/ESIC AUTHORITIES FOR PAYMENT OF EMPLOYER CONTRIBUTION OF PF/ESIC DUES WITH RESPECT TO THE AMOUNT OF RS. 27,84,655/- WHICH HAS BEEN COMPLIED WITH BY THE ASSESSEE AND HENCE THE PF/ESIC AUTHORITIES HAVE EXTENDED THE DUE DATE OF PAYMENT AND UNDER SUCH BELIEF THE ASSESSEE HAS N OT ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE U/S 43B OF THE ACT AS NO AMOUNT IS PAYABLE UNDER PF/ESIC ON THE GROUNDS THAT PF/ESIC A UTHORITIES GRANTED APPROVAL OF INSTALLMENT SCHEME FOR PAYMENT OF PF/ES IC DUES AND SECTION 43B IS APPLICABLE IF PF/ESIC IS PAYABLE AND IS NOT PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME AS STIPULATED U/S 139(1) OF THE ACT WHILE IN THE INSTANT CASE THERE WAS NO DUES PAYABLE TO PF/ESIC A UTHORITIES IN VIEW OF APPROVED INSTALLMENT SCHEME WAS THE EXPLANATION OF THE ASSESSEE. THE ASSESSEE HAS COME FORWARD WITH THE EXPLANATION THAT IT HAS OBTAINED THE APPROVAL OF THE PF/ESIC AUTHORITIES TO PAY THE EMPL OYER CONTRIBUTIONS TOWARDS PF/ESIC DUES IN INSTALLMENTS SCHEME APPROVE D BY PF/ESIC AUTHORITIES AND THE ASSESSEE HAS STATED TO HAVE COM PLIED WITH THE TERMS AND CONDITIONS OF THE SAID SCHEME. IN OUR CONSIDERED V IEW, THE ASSESSEE HAS COME OUT WITH A PLAUSIBLE EXPLANATION WHICH IS A BONAFID E EXPLANATION THAT IT DID NOT ADDED THE EMPLOYER CONTRIBUTION TOWARDS PF/ESIC OF RS.27,84,655/- WHICH WAS NOT PAID BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S. 139(1) OF THE ACT AS THE ASSESSEE COMPANY WAS GRANT ED INSTALLMENT SCHEME TO PAY EMPLOYER CONTRIBUTION TOWARDS PF/ESIC BY PF/ESI C AUTHORITIES WHICH IT STATED TO HAVE COMPLIED WITH AND HENCE SINCE NO AMO UNT WAS DUE TO BE PAYABLE BEFORE THE FILING OF RETURN OF INCOME U/S 1 39(1) OF THE ACT ON ACCOUNT OF EMPLOYER CONTRIBUTION TOWARDS PF/ESIC IN VIEW OF THE APPROVED INSTALLMENTS SCHEME BY PF/ESIC AUTHORITIES, THE ASS ESSEE DID NOT VISUALIZE THAT ANY AMOUNT IS DUE FOR PAYMENT UNDER PF/ESIC LA WS AND HENCE SECTION 43B OF THE ACT WHICH CONTEMPLATES ANY SUM PAYABLE T OWARDS EMPLOYER CONTRIBUTION TOWARDS PF/ESIC WHICH IS NOT PAID BEFO RE DUE DATE AS ITA7584/MUM/2013 9 PRESCRIBED U/S 139(1) OF THE ACT FOR FILING OF RETU RN OF INCOME AS LIABLE TO BE DISALLOWED U/S 43B OF THE ACT WHILE IN THE INSTANT CASE IT WAS CONTEMPLATED BY THE ASSESSEE THAT NO AMOUNT IS DUE FOR PAYMENT I N VIEW OF APPROVED INSTALLMENT SCHEME. IN VIEW OF THE ABOVE EXPLANATI ON SUBMITTED BY THE ASSESSEE IN OUR CONSIDERED VIEW , THE ASSESSEE CAME OUT WITH EXPLANATION WHICH WAS A BONAFIDE EXPLANATION WHICH SATISFIED TH E MANDATE OF SECTION 271(1)(C) OF THE ACT AND HENCE PENALTY U/S 271(1)( C) OF THE ACT AGAINST THE ASSESSEE IS NOT EXIGIBLE IN THIS CASE SUBJECT TO VE RIFICATION OF THE PLEA OF THE ASSESSEE THAT IT HAS BEEN GRANTED INSTALLMENT SCHEM E BY THE PF/ESIC AUTHORITIES FOR PAYMENT OF EMPLOYER CONTRIBUTIONS T OWARDS PF/ESIC DUES OF RS. 27,84,655/- AND THE ASSESSEE HAS DULY COMPLIED WITH THE SAID APPROVED INSTALLMENT SCHEME WHILE MAKING PAYMENT OF EMPLOYER CONTRIBUTION TOWARDS PF/ESIC DUES OF THIS AMOUNT OF RS.27,84,655/ - WITH IN TIME STIPULATED UNDER THE SAID APPROVED INSTALLMENT SCHEME . THE ASSESSEE IS DIRECTED TO PRODUCE THE COPY OF APPROVAL LETTERS FROM PF/ESIC AUTHORITI ES BEFORE THE A.O. APPROVING INSTALLMENT SCHEME WITH REFERENCE TO EMPL OYER CONTRIBUTION OF RS. 27,84,655/- TOWARDS PF/ESIC DUES AND THE A.O. SHALL VERIFY THE SAME AS PER OUR DIRECTIONS AS SETOUT ABOVE AND THEREAFTER DELET E THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AFTER BEING SATISFIED THAT THE ASSESSEE HAS DULY PAID THE SAID EMPLOYER CONTRIBUTION OF RS.27,84,655/- TOWARD S PF/ESIC WITHIN TIME STIPULATED UNDER THE APPROVED INSTALLMENT SCHEME. W E ORDER ACCORDINGLY. 10. IN THE RESULT, ASSESSEES APPEAL IN ITA NO 758 4/MUM/2013 FOR THE ASSESSMENT YEAR 2003-04 IS ALLOWED AS INDICATED ABO VE. ITA7584/MUM/2013 10 ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH AUGUST , 2016. # $% &' 17-08-2016 ( ) SD/- SD/- (MAHAVIR SINGH ) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 17-08-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI A BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI