Aditya Road Carriers Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-1(1), Ahmedabad

ITA 804/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9095 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-09-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 12-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Assessee Lawyers: HITESH P SHAH
• Keywords: Question of law
• Section: 43B; 260A

Judgement Text

IN THE INCOME_TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI H.L.KARWA AND SHRI N.S.SAINI ITA NO. 804/AHD/2009 (ASSESSMENT YEAR : 2005-06) ADITYA ROAD CARRIERS PVT. LTD. KEYUR SHETH & CO., F-9, BHAGWATI CHAMBER, 1 ST FLOOR, SWASTIK CHAR RASTA, AHMEDABAD. VS. ITO, WARD 1(1) AHMEDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HITESH P. SHAH, A.R. RESPONDENT BY : SHRI M.C.PANDIT, SR. D.R. ( (( ( )/ )/)/ )/ ORDER PER KARWA, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-VI, AHMEDABAD DATED 29.12.2008 RELATING TO A SSESSMENT YEAR 2005-06. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN TH IS APPEAL READS AS UNDER: THAT THE LEARNED CIT(A)-VI HAS ERRED IN LAW AND FAC TS BY CONFIRMING THE ADDITION OF DELAYED PAYMENT OF EMPLOYEE CONTRIBU TION OF PROVIDENT FUND OF RS.1,12,342/- AND THEREFORE THE ASSE SSING OFFICER BE DIRECTED TO ALLOW THE CLAIM OF DELAYED EMPLOYEE CON TRIBUTION OF PROVIDENT FUND, PAID DURING THE YEAR ITSELF, WHILE CO MPUTING THE TOTAL INCOME. 3. THE ASSESSING OFFICER DISALLOWED THE AMOUNT OF RS.1,12 ,342/- BEING THE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDE NT FUND OBSERVING AS UNDER: 2 4. PAYMENTS OF PF U/S.36(1)(VA) ON VERIFICATION OF THE ANNEXURE-2 ATTACHED WITH THE A UDIT REPORT, IT IS NOTICED THAT THE ASSESSEE HAD PAID THE CONTRIBUTION OF PROVIDENT FUND ONLY AFTER DUE DATES. THE DETAILS OF LATE PAYMEN TS ARE AS UNDER: MONTH AMOUNT DUE DATE FOR PAYMENT ACTUAL DATE OF PAYMENT APRIL 2004 17715 15/05/04 21/05/04 MAY 2004 17964 15/06/04 24/06/04 AUGUST 2004 18279 15/09/04 22/09/04 SEPTEMBER 2004 19458 15/10/04 . 25/10/04 NOVEMBER 2004 20119 15/12/04 21/12/04 DECEMBER 2004 18807 15/01/05 31/01/05 TOTAL 112342 4.1 DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN AS WHY THE LATE PAYMENT OF PROVIDENT FUND SHOULD NOT BE DISALLOWED. IN RESPONSE TO THAT THE ASSESSEE HAD STATED TH AT DUE TO FINANCIAL PROBLEM, WE ARE REMITTING THE SAID AMOUNT TO GOVT. ACCOUNT LATE FROM PRESCRIBED DATE. 4.2 AS PER SECTION 36(1)(VA) R.W.S. 2(24)(X) OF THE I T. ACT, 1961, A DEDUCTION SHALL BE ALLOWED IN RESPECT OF ANY SUM RECE IVED BY THE ASSESSEE BY WAY OF CONTRIBUTION FROM ITS EMPLOYEE TO PROV IDENT FUND, ESI AND ANY FUND FOR THE WELFARE OF SUCH EMPLOY EES PROVIDED SUCH FUND IS CREDITED BY THE ASSESSEE TO THE RELEVANT FUND ACCOUNT ON OR BEFORE DUE DATE. FAILURE TO DO SO, CONTRIBUTIO N DEDUCTED BY THE ASSESSEE FROM THE EMPLOYEES SHALL BE CONSIDERED AS RECEIP T OF THE ASSESSEE. 4.3 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, CONTENTI ON OF THE ASSESSEE IS NOT ACCEPTED AND LATE PAYMENTS MADE AFTER D UE DATES WHICH COMES TO RS.1,12,342/- IS HEREBY DISALLOWED AN D ADDED TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. 3 (DISALLOWANCE OF RS.1,12,342/-) 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION AND HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AFTER HEARING THE LD. REPRESENTATIVES OF BOTH THE PARTIES, WE FIND THAT THE ISSUE RAISED IN THIS APPEAL IS SQUARELY COVERED I N FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT V. P.M. ELECTRONICS LTD. (2 009) 177 TAXMAN 1(DELHI). IN THE SAID CASE, ON EXAMINATION OF THE DETA ILS SUBMITTED BY THE ASSESSEE WITH RESPECT TO PROVIDENT FUND PAYMENT MADE BOTH ON ACCOUNT OF EMPLOYER AND EMPLOYEES SHARE REVEALED THAT PAYMENT S IN A SUM OF RS. 17,94,042/- WERE MADE AS PER THE PROVISIONS OF SECTION 3 6(1)(VA) READ WITH SEC. 2(24)(X) AND SEC. 43B OF THE INCOME-TAX ACT, 1 961. CONSEQUENTLY, THE A.O. DISALLOWED THE DEDUCTION AND AD DED THE SUM OF RS. 17,94,042/- TOWARDS EPF CONTRIBUTION. ON APPEAL, THE CIT(A) ALLOWED PARTIAL RELIEF TO THE ASSESSEE. IN SECOND APPEAL, THE TRI BUNAL ALLOWED THE APPEAL OF THE ASSESSEE. THE REVENUE PREFERRED AN APPEAL U/S 260A OF THE ACT BEFORE THE HONBLE DELHI HIGH COURT AND THE HONBL E HIGH COURT CONFIRMED THE ORDER OF THE TRIBUNAL OBSERVING AS UNDE R: 7. HAVING HEARD THE LEARNED COUNSEL FOR THE REVENUE, AS WELL AS THE ASSESSEE, WE ARE OF THE VIEW THAT THE VIEW T AKEN BY THE TRIBUNAL DESERVES TO BE SUSTAINED AS IT IS NO LON GER RES INTEGRA IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF CITV. VINAY CEMENT LTD. [S.L. A. NO. 1934 OF 2007, DATED 7-3-2007 ] WHICH HAS BEEN FOLLOWED BY A DIVISIO N BENCH OF THIS COURT IN THE CASE OF CIT V. DHARMENDRA SH ARMA [2008] 297 ITR 320. 8. DESPITE THE AFORESAID JUDGMENTS, THE LEARNED COUN SEL FOR THE TRIBUNAL HAS CONTENDED THAT IN VIEW OF THE JU DGMENT OF THE DIVISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF CIT V. SYNERGY INANCIAL EXCHANGE LID. [2007 ] 288 IT R 366' AND THAI OF THE DIVISION BENCH OF THE BOMBAY HIGH COUR T IN THE CASE OF CIT 'V. PAMWI TISSUES LLD.[IT APPEAL NO. 10 34 OF 2004, DATED 4-2-2008 ] THE ISSUE REQUIRES CONSIDERATION. 4 ACCORDING TO US, IN VIEW OF THE DISMISSAL OF THE SPECIAL LEAVE PETITION IN THE CASE OF VINAY CEMENT LTD.(SUPRA) BY T HE SUPREME COURT BY A SPEAKING ORDER, THE SUBMISSION OF THE LEARNED COUNSEL FOR THE REVENUE HAS TO BE REJECTED AT T HE VERY THRESHOLD. THE REASON FOR THE SAME IS AS FOLLOWS: 9. THE GAUHATI HIGH COURT IN THE CASE OF CIT V.GEORGE WILLIAMSON (ASSAM) LTD. ( 2006)284 ITR 619 DEALT WITH THE VERY SAME ISSUE. IN THE SAID JUDGMENT THE DIVISION BENCH OF THE GAUHATI HIGH COURT NOTED A CONTRARY VIEW TAKEN BY THE KERALA HIGH COURT THE CASE OF CIT V. SOUTH INDIA CORPN . LTD.[2000] 242 ITR 114. AFTER NOTING THE SAID JUDGME NT THE FACT THAT THE AMENDMENTS HAD BEEN MADE TO THE PROVISIO NS OF SECTION 43B OF THE ACT BY VIRTUE OF FINANCE ACT, 2003 W ITH EFFECT FROM 1-4-2004 IT AGREED WITH THE SUBMISSION OF T HE LEARNED COUNSEL FOR THE ASSESSEE THAT BY VIRTUE OF THE OMISSION OF THE SECOND PROVISO AND THE OMISSION OF CLAUSES (A), (C), (D), (E) AND (F) WITHOUT ANY SAVING CLAUSE WOULD MEAN THAT THE PROVISIONS WERE NEVER IN EXISTENCE. FOR T HIS PURPOSE, IN THE SAID CASE THE ASSESSEE HAD PLACED RELIANCE ON THE JUDGMENT OF A CONSTITUTION BENCH OF THE SUPREME C OURT IN THE CASE OF KOLHAPUR CANESUGAR WORKS LTD V UNION OF IND IA [2000] 2 SCC 536 AND RAYALA CORPN. (P) LID. V. DIRE CTOR OF ENFORCEMENT [1969] 2 SCC 412 AND GENERAL FINANCE CO. V. ASSN. CIT [2002] 257 1TR 338' (SC). THE SAID SUBMISSIONS FOUND FAVOUR WITH THE DIVISION BENCH OF THE GAUHATI HI GH COURT AND RELYING ON EARLIER DECISIONS OF ITS OWN COURT IN CIT V. ASSAM TRIBUNE [2002] 253 ITR932 AND CITV. BHARAT BAMBOO & TIMBER SUPPLIERS [1996] 219 ITR 212 (GAU.) THE DIVISION BENCH DISMISSED THE APPEAL OF THE REVENUE. IT TRANSPIRES THAT THE AFORESAID MATTER WAS TAKEN UP IN A PPEAL ALONG WITH OTHER MATTERS INCLUDING VINAY CEMENT LTD. 'S CASE (SUPRA). THE ORDER IN VINAY CEMENT LTD.'S CASE (SUPRA) W AS PASSED BY THE SUPREME COURT ON 7-3-2007 WHEREIN IT OBSERVED AS FOLLOWS: 'DELAY CONDONED. IN THE PRESENT CASE WE ARE CONCERNED WITH THE LAW AS IT STOOD PRIOR TO THE AMENDMENT OF SECTION 43B. IN THE CIRCUMSTANCES, THE ASSESSEE WAS ENTITLED TO CLAIM THE BENEFIT IN SECTION 43B FOR THAT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT HE HAS CONTRIBUTED TO PROVIDENT FUND BEFORE FILING OF THE RETURN. SPECIAL LEAVE PETITION IS DISMISSED.' 5 10. IN VIEW OF THE ABOVE, IT IS QUITE EVIDENT THAT THE SPECIAL LEAVE PETITION WAS DISMISSED BY A SPEAKING ORDER AND WH ILE DOING SO THE SUPREME COURT HAD NOTICED THE FACT THAT T HE MATTER IN APPEAL BEFORE IT PERTAIN TO A PERIOD PRIO R TO THE AMENDMENT BROUGHT ABOUT IN SECTION 43B OF THE ACT. THE AFORESAID POSITION AS REGARDS THE STATE OF THE LAW FOR A PERIOD PRIOR TO THE AMENDMENT TO SECTION 43B HAS BEEN NOTICED BY A DIVISION BENCH OF THIS COURT IN DHARMENDRA SHARMA'S CASE (SUPRA). APPLYING THE RATIO OF THE DECISION OF THE SUP REME COURT IN VINAY CEMENT LTD.'S CASE (SUPRA) A DIVISION B ENCH OF THIS COURT DISMISSED THE APPEALS OF THE REVENUE. IN THE PASSING WE MAY ALSO NOTE THAT A DIVISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF CITV. NEXUS COMPUTER (P.) LTD . BY A JUDGMENT DATED 18-8-2008 PASSED IN TAX-CASE (A) NO. 11 92 OF 2008 DISCUSSED THE IMPACT OF BOTH THE DISMISSAL OF THE SPECIAL LEAVE PETITION IN THE CASE OF GEORGE WILLIAMSON (ASSAM) LTD. 'S CASE (SUPRA) AND VINAY CEMENT LTD. 'S CASE (SUPRA) AS WELL AS A CONTRARY VIEW OF THE DIVISION BENCH OF ITS OWN COURT IN SYNERGY FINANCIAL EXCHANGES CASE (SUPRA). TH E DIVISION BENCH OF THE MADRAS HIGH COURT HAS EXPLAINED T HE EFFECT OF THE DISMISSAL OF A SPECIAL LEAVE PETITION BY A SPEAKING ORDER BY RELYING UPON TH6 JUDGMENT OF THE SUPREME COURT IN THE CASE OF KUNHAYAMMEDV. STATE OF KERALA [2 000] 119 STC 505 AT PAGE 526 IN PARAGRAPH 40 AND NOTED T HE FOLLOWING OBSERVATIONS : . . IF THE ORDER REFUSING LEAVE TO APPEAL IS A SPEAKING ORDER, IE., GIVES REASONS FOR REFUSING THE GRANT OF LE AVE, THEN THE ORDER HAS TWO IMPLICATIONS. FIRSTLY, THE STATEMENT OF LAW CONTAINED IN THE ORDER IS A DECLARATIO N OF LAW BY THE SUPREME COURT WITHIN THE MEANING OF ARTICLE 141 OF THE CONSTITUTION. SECONDLY, OTHER THAN THE DECLARATION OF LAW, WHATEVER IS STATED IN THE ORDER AR E THE FINDINGS RECORDED BY THE SUPREME COURT WHICH WOULD BIND THE PARTIES THERETO AND ALSO THE COURT, TRIBUNAL OR AUTHORITY IN ANY PROCEEDINGS SUBSEQUENT THERETO BY WAY OF JUDICIAL DISCIPLINE, THE SUPREME C OURT BEING THE APEX COURT OF THE COUNTRY. BUT, THIS DOES NO T AMOUNT TO SAYING THAT THE ORDER OF THE COURT, TRIBUN AL OR AUTHORITY BELOW HAS STOOD MERGED IN THE ORDER OF T HE SUPREME COURT REJECTING SPECIAL LEAVE PETITION OR THA T THE ORDER OF THE SUPREME COURT IS THE ONLY ORDER BINDING AS RES JUDICATA IN SUBSEQUENT PROCEEDINGS BETWEEN THE PARTIES.' 6 11. UPON NOTING THE OBSERVATIONS OF THE SUPREME COUR T IN KUNHAYAMMED 'S CASE (SUPRA) THE DIVISION BENCH OF THE MADRAS HIGH COURT IN THE CASE OF NEXUS COMPUTER (P.) LTD . (SUPRA) CAME TO THE CONCLUSION THAT THE VIEW TAKEN BY TH E SUPREME COURT IN VINAY CEMENT LTD.'S CASE (SUPRA) WOUL D BIND THE HIGH COURT AS IT WAS NON-DECLARED BY THE SUPR EME COURT UNDER ARTICLE 141 OF THE CONSTITUTION. 12. WE ARE IN RESPECTFUL AGREEMENT WITH THE REASONIN G OF THE MADRAS HIGH COURT IN NEXUS COMPUTER (P.) LTD. 'S C ASE (SUPRA). JUDICIAL DISCIPLINE REQUIRES US TO FOLLOW THE VI EW OF THE SUPREME COURT IN VINAY CEMENT LTD. 'S CASE (SUPRA) AS ALSO THE VIEW OF THE DIVISION BENCH OF THIS COURT IN DHARMENDRA SHARMA'S CASE (SUPRA). 13. IN THESE CIRCUMSTANCES, WE RESPECTFULLY ISAGREE WITH THE APPROACH ADOPTED BY A DIVISION BENCH OF THE BOMBA Y HIGH COURT IN PAMWI TISSUES LTD. 'S CASE (SUPRA). 14. IN THESE CIRCUMSTANCES INDICATED ABOVE, WE ARE OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FOR O UR CONSIDERATION IN THE PRESENT APPEAL. THE APPEAL IS, TH US, DISMISSED. 6. RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE DELH I HIGH COURT (SUPRA), WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAI M OF THE ASSESSEE. THE GROUND OF APPEAL IS ALLOWED. 7. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11.9. 2009. SD/- (N.S.SAINI) ACCOUNTANT MEMBER SD/- (H.L.KARWA) JUDICIAL MEMBER AHMEDABAD, DATED:11.9.2009 PSP* 7 COPY TO : (1) THE ASSESSEE (2) THE ASSESSING OFFICER (3) THE CIT(A) CONCERNED, (4) THE CIT, CONCERNED, (5) THE DR, ITAT, AHMEDABAD, (6) GUARD FILE. BY ORDER ASSTT. REGISTRAR / D EPUTY REGISTRAR ITAT, AHMEDABAD BENCHES AHMEDABAD.