INCOME TAX OFFICER, Jaipur V. S. BROTHERS FACILITIES MANAGEMENT, Jaipur

ITA 914/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2221 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 43B; 131; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 914/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 INCOME TAX OFFICER, WARD 2(3), JAIPUR. CUKE VS. M/S S. BROTHERS FACILITY MANAGEMENT, A-3, GOVINDPURI, RAMNAGAR, SODALA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABQFS 7809 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/01/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 05/01/2018 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)-I, JAIPUR DATED 07/09/2017 FOR THE A. Y. 2014-15, WHEREIN THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 42,14, 749/- OF EMPLOYEES CONTRIBUTION OF PF AND ESI WHICH WAS DEPO SITED BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN THE RESPECTIV E ACTS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THAT EMPLOYEES CONT RIBUTION PF AND ITA 914/JP/2017_ ITO VS. S. BROTHERS FACILITY 2 ESI ARE COVERED BY THE PROVISIONS OF SECTION HONBL E ITAT WAS 43B AND NOT BY SECTION 36(I)(VA) R.W.S. 2(24)(X) OF THE ACT? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN APPRECIATING THE F ACTS THAT THE MATTER IS SUBJUDICE BEFORE THE HON'BLE SUPREME COUR T? 2. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF M ANPOWER SUPPLY AND REPAIR AND MAINTENANCE WORK OF VARIOUS BANKS. TH E RETURN OF INCOME WAS FILED ON 27/11/2014 DECLARING TOTAL INCOME OF RS . 9,82,750/-. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER MADE VARIOUS ADDITIONS INCLUDING THE ADDITION OF RS. 42,14,749/- BY INVOKING THE PROVISIONS OF SECTION 36(1)(VA) OF THE INCOME TAX AC T, 1961 (IN SHORT THE ACT) FOR THE REASON THAT THE ASSESSEE FIRM RECEIVED CERTAIN AMOUNT FROM THE EMPLOYEES TOWARDS THE CONTRIBUTION TO THE PF AND ESI. HOWEVER, THE SAME WAS NOT PAID TO THE AUTHORITIES CONCERNED IN TI ME AS PER RESPECTIVE LAW. THIS AMOUNT WAS PAID BEFORE THE DUE DATE OF FILI NG OF RETURN OF INCOME U/S 131 OF THE ACT. 3. THE LD. CIT(A) HAS GRANTED THE RELIEF TO THE ASSE SSEE BY HOLDING AS UNDER: 3.1.2 DETERMINATION : (I) THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASS ESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE AO THAT THE APPELLANT HAS NO T DEPOSITED THE EMPLOYEES CONTRIBUTION OF PF/ESI TO THE GOVERNMENT ACCOUNT WITHIN THE STIPULATED TIME PRESCRIBED UNDER THE PF/ESI ACT AND CONSEQUENTLY THE AO HAS MADE ADDITION OF RS. 42,14,749/- TO THE INCO ME OF THE APPELLANT. ITA 914/JP/2017_ ITO VS. S. BROTHERS FACILITY 3 (II) DURING APPELLATE PROCEEDINGS IT WAS SUBMITTED BY THE APPELLANT THAT ENTIRE AMOUNT OF RS. 42,14,749/- WAS DEPOSITED BY T HE APPELLANT BEFORE THE DUE DATE OF TILING OF RETURN OF INCOME AND THUS THE AO WAS NOT JUSTIFIED IN MAKING THE SAID DISALLOWANCE. THE AR P LACED RELIANCE UPON A NUMBER OF JUDICIAL PRONOUNCEMENTS. I HAVE DULY CONS IDERED THE SUBMISSIONS OF THE APPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. IT MAY BE MENTIONED THAT THE HONBLE RAJ ASTHAN HIGH COURT IN CASE OF CIT VS. SBBJ (2014) 265 CTR (RAJ) 471 AN D CIT VS. UDAIPUR DUGDH UTPADAK SANGH LTD. (2014) 265 CTR (RAJ.) 59 H AS HELD THAT WHERE PF/ ESI WERE PAID AFTER DUE DATE UNDER RESPECTIVE A CT BUT BEFORE DUE DATE OF FILING OF RETURN OF INCOME U/S 139 (1), THE SE CANNOT BE DISALLOWED UNDER SECTION 43B OR UNDER SECTION 36(1)(VA) OF THE ACT, 1961. IN THE INSTANT CASE UNDER CONSIDERATION, IT IS EVIDENT FRO M THE ASSESSMENT ORDER THAT THE EMPLOYEE'S CONTRIBUTION ON ACCOUNT O F PF/ESI WAS PAID BY THE APPELLANT PRIOR TO DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF THE ACT. RESPECTFULLY FOLLOWING THE DECISION OF HON BLE RAJASTHAN HIGH COURT, THE ADDITION OF RS. 42,14,749/- MADE BY THE A.O. CANNOT BE SUSTAINED AND HENCE DELETED. 4. THE BENCH IS HEARD BOTH THE SIDES ON THIS ISSUE. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DE CISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT. THE HONBLE RAJASTHAN HI GH COURT IN THE CASE OF CIT VS. JAIPUR VIDYUT VITRAN NIGAM LTD. 265 CTR 62 (RAJ) 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 ORDERS. IN OUR VIEW NO SUBSTANTIAL QUESTION OF LAW ARISES OUT OF THE OR DERS OF THE TRIBUNAL AS IT IS AN ADMITTED FACT THAT THE ENTIRE AMOUNT WAS DEPOSIT ED BY THE RESPONDENT- ASSESSEE AT LEAST ON OR BEFORE THE DUE DATE OF FILI NG OF THE RETURNS UNDER S. ITA 914/JP/2017_ ITO VS. S. BROTHERS FACILITY 4 139 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 BEFORE THE DUE DATE OF FILING THE RETURN UNDER S. 139 AND ADMITTEDLY IT WAS DEPOSITED ON OR BEFORE THE DUE DATE THEN THE AMOUNT CANNOT BE DISALLOWED U NDER S. 43B OF THE IT ACT OR UNDER S. 36(1)(VA) OF THE ACT. IN FACT IN TH E ABOVE MATTERS ONE OF THE PARTIES IS SAME AS IN THE PRESENT APPEALS, THEREFOR E, THE ISSUE IS NO MORE RES INTEGRA IN THE LIGHT OF JUDGMENTS OF THIS COURT REF ERRED TO SUPRA AND, IN OUR VIEW, NO SUBSTANTIAL QUESTION OF LAW ARISES OUT OF THE IMPUGNED ORDERS OF THE TRIBUNAL, WHICH MAY REQUIRE ATTENTION OF THIS COURT . THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF AND CIT VS. STATE BANK OF BIKANER AND JAIPUR (2014) 99 DTR 131 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 SYST EM FOLLOWED BY THE ASSESSEES IN CLAIMING THE DEDUCTION I.E. ACCRUAL BA SIS AND THE SAME WAS BEING ALLOWED, AS THE LIABILITY DID EXIST BUT THE SAID AM OUNT THOUGH CLAIMED AS A DEDUCTION WAS NOT BEING DEPOSITED EVEN AFTER LAPSE OF SEVERAL YEARS. THEREFORE, TO PUT A CHECK ON THE SAID CLAIMS/DEDUCT IONS HAVING BEEN MADE, THE SAID PROVISION WAS BROUGHT IN TO CURB THE SAID ACTIVITIES AND WHICH WAS APPROVED BY THE HON'BLE APEX COURT IN THE CASE OF A LLIED MOTORS (P) LTD.(SUPRA). 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 914/JP/2017_ ITO VS. S. BROTHERS FACILITY 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 WIT HIN THE DUE DATE UNDER THE RESPECTIVE ENACTMENTS BY THE ASSESSEES AND NOT UNDE R THE DUE DATE 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 DEDUCT ION BUT THE SAID AMOUNTS WERE NOT DEPOSITED. IT IS PERTINENT TO NOTE THAT THE RESPECTIVE ACT SUCH AS PF ETC. ALSO PROVIDES THAT THE AMOUNTS CAN BE PAID LATER ON SUBJECT TO PAYMENT OF INTEREST AND OTHER CONSEQUENCES AND TO G ET BENEFIT UNDER THE INCOME TAX ACT, AN ASSESSEE OUGHT TO HAVE ACTUALLY DEPOSITED THE ENTIRE AMOUNT AS ALSO TO ADDUCE EVIDENCE REGARDING SUCH DE POSIT ON OR BEFORE THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 1 39 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. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/01/2018. SD/- SD/- FOT; IKY JKO FOT; IKY JKO FOT; IKY JKO FOT; IKY JKO HKKXPAN HKKXPAN HKKXPAN HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 05 TH JANUARY, 2018. ITA 914/JP/2017_ ITO VS. S. BROTHERS FACILITY 6 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 2(3), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT M/S S. BROTHERS FACILITY MANAGEMENT, 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. 914/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR