INCOME TAX OFFICER, WARD-6-1, Jaipur V. PROFESSIONAL H R SERVICES PVT. LTD., Jaipur

ITA 805/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2231 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 03-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DEEPAK GUPTA CA DHK
• Keywords: Question of law
• Section: 43B; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 805/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 INCOME TAX OFFICER, WARD 6(1), JAIPUR. CUKE VS. M/S PROFESSIONAL HR SERVICES P. LTD. (COMPANY), SHOP NO. 3, 1 ST FLOOR, OPP.- 11/500, BEHID SECTOR 10-11, NEAR RAILWAY LINE, MALVIYA NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAFCP 3030 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA JHA (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI DEEPAK GUPTA (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/01/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 04/01/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE REVENUE EMANATES FRO M THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 23/08/2017 FOR THE A. Y. 2014-15, WHEREIN THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD. CIT (A) IS JUSTIFIED IN:- 1. WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 42,10,063 /- MADE ON ITA 805/JP/2017_ ITO VS M/S PROFESSIONAL HR SERVICES 2 ACCOUNT OF DISALLOWANCE OF EMPLOYEES CONTRIBUTION TOWARDS PF & ESI FOR DEPOSITING IT BEYOND THE PRESCRIBED TIME LI MIT. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE HONBLE ITAT WAS JUSTIFIED IN HOLDING THAT THE EMPL OYEES CONTRIBUTION TO PF & ESI ARE GOVERNED BY THE PROVIS IONS OF SECTION 43B AND NOT BY SECTION 36(I)(VA) R.W.S. 2(24)(X) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE COMPANY IS ENGAGED IN BUSINESS OF SU PPLY OF MAN POWER. THE RETURN OF INCOME WAS E-FILED ON 28/11/2014 DECLARING TOTAL INCOME OF RS. 4,35,820/-. THE ASSESSING OFFICER MAD E ADDITION OF RS. 42,10,063/- BY INVOKING THE PROVISIONS OF SECTION 3 6(1)(VA) R.W.S. 2(24)(X) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT) ON ACCOUNT OF DELAY IN PAYMENT OF ESI AND PF. THE REVENUE HAS FIL ED REVISED GROUND OF APPEAL, WHICH READ AS UNDER: 1. WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION O F RS. 42,10,063/- MADE FOR DEPOSITING THE EMPLOYEES CONTRIBUTION TO PF & ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RE SPECTIVE ACTS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE EMPLOY EES CONTRIBUTION TO PF & ESI ARE GOVERNED BY THE PROVISIONS OF SECTI ON 43B AND NOT BY SECTION 36(I)(VA) R.W.S. 2(24)(X) OF THE INCOME TAX ACT, 1961. 3. THE LD SR.DR HAS RELIED ON THE ORDER OF THE ASSE SSING OFFICER AND PLEADED THAT THE EMPLOYEES CONTRIBUTION TO PF AND E SI WAS DEPOSITED BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RE SPECTIVE ACT. 4. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THIS ISSUE IS COVERED BY THE DECISION OF THE HONBL E JURISDICTIONAL HIGH ITA 805/JP/2017_ ITO VS M/S PROFESSIONAL HR SERVICES 3 COURT IN THE CASE OF CIT VS. JAIPUR VIDYUT VITRAN NI GAM LTD. 265 CTR 62 (RAJ) AND CIT VS. STATE BANK OF BIKANER AND JAIPUR ( 2014) 99 DTR 131. THE LD. CIT(A) HAS GRANTED RELIEF RELYING ON THESE D ECISIONS OF HONBLE JURISDICTIONAL HIGH COURT, THEREFORE, THERE IS NO S COPE FOR RELIEF TO THE REVENUE. HE HAS ALSO SUBMITTED THAT THE SIMILAR ISS UE HAS BEEN DECIDED BY THE ITAT IN ASSESSEES OWN CASE FOR THE A.Y. 2013-14 WHEREIN THE APPEAL OF THE REVENUE HAS BEEN DISMISSED. 5. THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. ADMITTEDLY, CONTRIBUT ION TO PF& ESI HAS BEEN PAID BY THE APPELLANT, IN ALL INSTANCES, BEFOR E THE DUE DATE OF FILING THE RETURN OF INCOME U/S 139(1). THIS FACT IS THERE FORE, NOT IN DISPUTE. IN VIEW OF THE JUDGMENTS OF THE RAJASTHAN HIGH COURT I N THE CASE JAIPUR VIDHYUT VITHRAN NIGAM LTD, 265 CTR 62 (RAJ), CIT VS . STATE BANK OF BIKANER & JAIPUR (2014) 99 DTR 131 (RAJ) AND OTHER CASE LAWS ON THIS ISSUE, THE CLAIM OF THE APPELLANT IS ALLOWABLE. THE ISSUE HAS BEEN DECIDED BY THE HONBLE ITAT JAIPUR IN FAVOUR OF THE ASSESSE E VIDE ITS ORDER DATED 22.07.17 FOR ASSESSMENT YEAR 2013-14 ON THIS ISSUE. ACCORDINGLY, THIS DISALLOWANCE MADE BY THE ASSESSING OFFICER IS, DIRE CTED TO BE DELETED. THIS GROUND IS ALLOWED. 6. THE BENCH IS HEARD BOTH THE SIDES ON THIS ISSUE. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. JVVNL (S UPRA) HAS HELD AS UNDER: WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE L EARNED COUNSEL FOR THE REVENUE AND HAVE ALSO GONE THROUGH THE IMPUGNED ORD ERS. IN OUR VIEW NO SUBSTANTIAL QUESTION OF LAW ARISES OUT OF THE ORDER S OF THE TRIBUNAL AS IT IS AN ADMITTED FACT THAT THE ENTIRE AMOUNT WAS DEPOSITED BY THE RESPONDENT- ITA 805/JP/2017_ ITO VS M/S PROFESSIONAL HR SERVICES 4 ASSESSEE AT LEAST ON OR BEFORE THE DUE DATE OF FILI NG OF THE RETURNS UNDER S. 139 OF THE IT ACT AND BEING A CONCURRENT FINDING OF FACT BY THE RESPECTIVE AUTHORITIES AND IN THE LIGHT OF THE JUDGMENTS RENDE RED BY THIS COURT IN THE CASE OF CIT V. STATE BANK OF BIKANER & JAIPUR/ JAIP UR VIDYUT VITRAN NIGAM LTD. [2014] 363 ITR 70/43 TAXMANN.COM 411 OF EVEN DATE WHEREIN IT HAS BEEN HELD THAT IF THE AMOUNT HAS BEEN DEPOSITED ON OR BE FORE THE DUE DATE OF FILING THE RETURN UNDER S. 139 AND ADMITTEDLY IT WAS DEPOS ITED ON OR BEFORE THE DUE DATE THEN THE AMOUNT CANNOT BE DISALLOWED UNDER S. 43B OF THE IT ACT OR UNDER S. 36(1)(VA) OF THE ACT. IN FACT IN THE ABOVE MATTERS ONE OF THE PARTIES IS SAME AS IN THE PRESENT APPEALS, THEREFORE, THE ISSU E IS NO MORE RES INTEGRA IN THE LIGHT OF JUDGMENTS OF THIS COURT REFERRED TO SU PRA AND, IN OUR VIEW, NO SUBSTANTIAL QUESTION OF LAW ARISES OUT OF THE IMPUG NED ORDERS OF THE TRIBUNAL, WHICH MAY REQUIRE ATTENTION OF THIS COURT. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V S. SBBJ (SUPRA) HAS HELD AS UNDER: 20. ON PERUSAL OF SEC.36(1)(VA) AND SEC.43(B)(B) AND ANALYZING THE JUDGMENTS RENDERED, IN OUR VIEW AS WELL, IT IS CLEAR THAT THE LEGISLATURE BROUGHT IN THE STATUTE SECTION 43(B)(B) TO CURB THE ACTIVITIES OF SUCH TAX PAYERS WHO DID NOT DISCHARGE THEIR STATUTORY LIABILITY OF PAYMENT OF D UES, AS AFORESAID; AND RIGHTLY SO AS ON THE ONE HAND CLAIM WAS BEING MADE UNDER SE CTION 36 FOR ALLOWING THE DEDUCTION OF GPF, CPF, ESI ETC. AS PER THE SYSTEM F OLLOWED BY THE ASSESSEES IN CLAIMING THE DEDUCTION I.E. ACCRUAL BASIS AND THE S AME WAS BEING ALLOWED, AS THE LIABILITY DID EXIST BUT THE SAID AMOUNT THOUGH CLAIMED AS A DEDUCTION WAS NOT BEING DEPOSITED EVEN AFTER LAPSE OF SEVERAL YEA RS. THEREFORE, TO PUT A CHECK ON THE SAID CLAIMS/DEDUCTIONS HAVING BEEN MADE, THE SAID PROVISION WAS BROUGHT IN TO CURB THE SAID ACTIVITIES AND WHICH WA S APPROVED BY THE HON'BLE APEX COURT IN THE CASE OF ALLIED MOTORS (P) LTD.(SU PRA). 21. A CONJOINT READING OF THE PROVISO TO SECTION 43-B WHICH WAS INSERTED BY THE FINANCE ACT, 1987 MADE EFFECTIVE FROM 01/04/1988, T HE WORDS NUMBERED AS CLAUSE (A), (C), (D), (E) AND (F), ARE OMITTED FROM THE ABOVE PROVISO AND, FURTHERMORE SECOND PROVISO WAS REMOVED BY FINANCE A CT, 2003 THEREFORE, THE DEDUCTION TOWARDS THE EMPLOYER'S CONTRIBUTION, IF P AID, PRIOR TO DUE DATE OF FILING OF RETURN CAN BE CLAIMED BY THE ASSESSEE. IN OUR VIEW, THE EXPLANATION APPENDED TO SECTION 36(1)(VA) OF THE ACT FURTHER EN VISAGE THAT THE AMOUNT ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE ADMISSIBLE AT THE TIME OF SUBMITTING RETURN OF THE INCOME UNDER SECTION 13 9 OF THE ACT IN RESPECT OF THE PREVIOUS YEAR CAN BE CLAIMED BY THE ASSESSEE FO R DEDUCTION OUT OF THEIR GROSS TOTAL INCOME. IT IS ALSO CLEAR THAT SEC.43B S TARTS WITH A NOTWITHSTANDING CLAUSE & WOULD THUS OVERRIDE SEC.36(1) (VA) AND IF READ IN ISOLATION SEC. 43B ITA 805/JP/2017_ ITO VS M/S PROFESSIONAL HR SERVICES 5 WOULD BECOME OBSOLETE. ACCORDINGLY, CONTENTION OF C OUNSEL FOR THE REVENUE IS NOT TENABLE FOR THE REASON AFORESAID THAT DEDUCTION S OUT OF THE GROSS INCOME FOR PAYMENT OF TAX AT THE TIME OF SUBMISSION OF RET URN UNDER SECTION 139 IS PERMISSIBLE ONLY IF THE STATUTORY LIABILITY OF PAYM ENT OF PF OR OTHER CONTRIBUTION REFERRED TO IN CLAUSE (B) ARE PAID WITHIN THE DUE D ATE UNDER THE RESPECTIVE ENACTMENTS BY THE ASSESSEES AND NOT UNDER THE DUE D ATE OF FILING OF RETURN. 22. WE HAVE ALREADY OBSERVED THAT TILL THIS PROVISION WAS BROUGHT IN AS THE DUE AMOUNTS ON ONE PRETEXT OR THE OTHER WERE NOT BEING DEPOSITED BY THE ASSESSEES THOUGH SUBSTANTIAL BENEFITS HAD BEEN OBTA INED BY THEM IN THE SHAPE OF THE AMOUNT HAVING BEEN CLAIMED AS A DEDUCTION BU T THE SAID AMOUNTS WERE NOT DEPOSITED. IT IS PERTINENT TO NOTE THAT THE RES PECTIVE ACT SUCH AS PF ETC. ALSO PROVIDES THAT THE AMOUNTS CAN BE PAID LATER ON SUBJ ECT TO PAYMENT OF INTEREST AND OTHER CONSEQUENCES AND TO GET BENEFIT UNDER THE INCOME TAX ACT, AN ASSESSEE OUGHT TO HAVE ACTUALLY DEPOSITED THE ENTIR E AMOUNT AS ALSO TO ADDUCE EVIDENCE REGARDING SUCH DEPOSIT ON OR BEFORE THE RE TURN OF INCOME UNDER SUB- SECTION (1) OF SECTION 139 OF THE IT ACT. 23 . THUS, WE ARE OF THE VIEW THAT WHERE THE PF AND/O R EPF, CPF, GPF ETC., IF PAID AFTER THE DUE DATE UNDER RESPECTIVE ACT BUT BEFORE FILING OF THE RETURN OF INCOME UNDER SECTION 139(1), CANNOT BE DISALLOWED U NDER SECTION 43B OR UNDER SECTION 36(1)(VA) OF THE IT ACT. SINCE THE ISSUE UNDER CONSIDERATION IS SQUARELY COV ERED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, THEREFORE, T HERE IS NO SCOPE FOR RELIEF TO THE REVENUE AT THE LEVEL OF THE ITAT. HENC E, APPEAL OF THE REVENUE STANDS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/01/2018. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04 TH JANUARY, 2018 ITA 805/JP/2017_ ITO VS M/S PROFESSIONAL HR SERVICES 6 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 6(1), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S PROFESSIONAL HR SERVICES P. LTD. (COMPANY), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 805/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR