ITO, Jaipur V. S. BROTHERS FACILITIES MANAGEMENT, Jaipur

ITA 957/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5668 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 04-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL SHARMA CA DHK
• Section: 43B

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 HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 957/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 THE ITO WARD- 2(3) JAIPUR CUKE VS. M/S. S.BROTHERS FACILITIES MANAGEMENT S-201-202, VANKTESHWAR TOWER CENTRAL SPINE,VIDHYADHAR NAGAR, 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: SHRI RAJENDRA JHA, ADDL.CIT-DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI ANIL SHARMA, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/12/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 5 /01/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-I , JAIPUR DATED 31-08-2016 FOR THE ASSESS MENT YEAR 2013-14 RAISING FOLLOWING GROUNDS OF APPEAL. 1. (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTAN CES OF THE CASE IN LAW THE LD. CIT(A) HAS ERRED IN DELETING TH E ADDITION OF RS. 33,78,972/- MADE FOR DEPOSITING THE EMPLOYEES CONT RIBUTION TO PF AND ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN TH E RESPECTIVE ACTS. ITA NO.957/JP/2016 THE ITO,WARD- 2(3), JAIPUR VS. M/S. S. BROTHERS FAC ILITIES MANAGEMENT, JAIPUR 2 (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN LAW THE LD. CIT(A) HAS ERRED IN HOLDING THA T EMPLOYEES CONTRIBUTION UNDER PF AND ESI ARE GOVERNED BY THE P ROVISION OF SECTION 43B AND NOT BY SECTION 36(1)(VA) READ WITH SECTION 2(24)(X) OF I.T. ACT. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE H AD NOT PAID PF OF EMPLOYEES CONTRIBUTION AMOUNTING TO RS. 29,46,250/ - AND ESI OF EMPLOYEES CONTRIBUTION AMOUNTING TO RS. 4,32,722/- WITHIN THE STIPULATED PERIOD FOR WHICH THE AO REQUIRED TO ASSE SSEE TO SUBMIT ITS REPLY FOR NOT DEPOSITING THE ABOVE CONTRIBUTIONS WITHIN T HE STIPULATED TIME. THE ASSESSEE FILED THE REPLY BEFORE THE AO ON THE ISSUE IN QUESTION. ACCORDING TO THE AO, THE REPLY OF THE ASSESSEE WAS NOT ACCEPT ABLE TO HIM AND AS PER PROVISIONS OF SECTION 2(24)(X)READ WITH SECTION 36( 1)(VA) OF THE I.T. ACT THE ASSESSEE HAD TO DEPOSIT EMPLOYEES CONTRIBUTION TO PF AND ESI BEFORE DUE DATE AND THUS THE ASSESSEE FAILED TO DEPOSIT TH E SAME WITHIN THE STIPULATED TIME. THE AO THUS TREATED THE ABOVE LAT E DEPOSITS OF EMPLOYEES CONTRIBUTION TO PF AND ESI (RS.29,46,250/ - PF + RS. 4,32,722/- = RS. 33,78,972/-) AS INCOME OF THE ASSE SSEE AND ADDED AN AMOUNT OF RS. 33,78,972/- TO THE TOTAL INCOME OF T HE ASSESSEE. ITA NO.957/JP/2016 THE ITO,WARD- 2(3), JAIPUR VS. M/S. S. BROTHERS FAC ILITIES MANAGEMENT, JAIPUR 3 2.2 IN FIRST APPEAL, THE LD. CIT(A) HAD DELETED BOT H THE ADDITIONS RELATING TO ESI CONTRIBUTION AND PF BY OBSERVING AS UNDER:- 3.1.2. DETERMINATION (I) I HAVE DULY CONSIDERED THE SUBMISSIONS OF TH E APPELLANT, ASSESSMENT ORDER AND THE MATERIAL ON REC ORD. THE AO DISALLOWED A SUM OF RS. 33,78,972/- U/S 36(1)(VA ) BY OBSERVING THAT EMPLOYEE CONTRIBUTION TO PROVIDENT F UND AND ESI HAS NOT BEEN DEPOSITED IN THE GOVERNMENT ACCOUN T BY THE DUE DATE AS PRESCRIBED IN THE RELEVANT ACTS. (II) DURING APPELLATE PROCEEDINGS, IT WAS SUBMITTED BY THE APPELLANT THAT THE ENTIRE AMOUNT OF RS. 33,78,972/- WAS DEPOSITED BY THE APPELLANT BEFORE THE DUE DATE OF F ILING OF RETURN OF INCOME AND THUS THE AO WAS NOT JUSTIFIED IN MAKING THE SAID DISALLOWANCE. THE A.R. PLACED RELIA NCE UPON A NUMBER OF JUDICIAL PRONOUNCEMENTS. IT MAY BE MENT IONED THAT THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SBBJ (2014) 265 CTR (RAJ) 471 AND CIT VS. UDAIPUR DUGDH UTPADAK SANGH LTD. (2014) 265 CTR 59 HAS HELD THAT WHERE PF/ ESI WERE PAID AFTER DUE DATE UNDER RESPEC TIVE ACTS BUT BEFORE DUE DATE OF FILING OF RETURN OF INC OME U/S 139(1), THESE CANNOT BE DISALLOWED U/S 43B OR U/S 3 6(1)(VA) OF THE ACT, 1961. IN THE INSTANT CASE UNDER CONSIDE RATION, THE EMPLOYEES CONTRIBUTION ON ACCOUNT OF PF / ESI WER E PAID BY THE APPELLANT PRIOR TO DUE DATE OF FILING OF RET URN OF INCOME U/S 139(1) OF THE ACT. RESPECTFULLY FOLLOWIN G THE DECISION OF HON'BLE RAJASTHAN HIGH COURT, THE ADDI TION OF RS. 33,78,972/- CANNOT BE SUSTAINED AND HENCE DELET ED. 2.3 THE LD. DR RELIED ON THE ORDER OF THE AO. ITA NO.957/JP/2016 THE ITO,WARD- 2(3), JAIPUR VS. M/S. S. BROTHERS FAC ILITIES MANAGEMENT, JAIPUR 4 2.4 THE LD. AR OF THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT(A) AND THE CASE LAWS PLACED BEFORE THE LD. CIT(A) TO THIS EFFECT. THE LD. AR OF THE ASSESSEE HAS ALSO FILED THE WRITTEN SUBMISSION WHICH HAS BEEN TAKEN INTO CONSIDERATION. 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I HAVE GONE THROUGH THE ORDER OF THE LD. CIT(A) AND THE CASE LAWS SUBMITTED BEFORE THE LD. CIT(A) WHICH FINDS FAVOUR OF THE ASSESSEE. IT MAY FURTHER BE NOTED THAT SUCH ISSUE H AS ALSO BEEN DECIDED BY THE ITAT, COORDINATE BENCH, JAIPUR IN FAVOUR OF TH E ASSESSEE VIDE ITS ORDER DATED 27-09-2016 IN THE CASE OF ACIT VS. SHRI SHAILENDRA GARG, C/O M/S. GARMENT CRAFT INDIA (P) LTD. (ITA NO. 804/JP/2 015 FOR THE ASSESSMENT YEAR 2010-11). IT MAY BE FURTHER NOTED T HAT THE HON'BLE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD. (2014) 265 CTR 59 HAD C ONSIDERED THIS ISSUE IN DETAIL AT PARA 7 TO 9 OF ITS ORDER AS UND ER:- 7. FURTHER, THE HON'BLE SUPREME COURT IN CIT V. V INAY CEMENT LTD. [2009] 313 ITR (ST.) 1 (SC) WHILE DISMISSING THE SPECIAL LEAVE PETITION PREFERRED BY THE REVENUE AGA INST THE JUDGMENT OF THE GAUHATI HIGH COURT OBSERVED AS UNDE R : ITA NO.957/JP/2016 THE ITO,WARD- 2(3), JAIPUR VS. M/S. S. BROTHERS FAC ILITIES MANAGEMENT, JAIPUR 5 IN THE PRESENT CASE, WE ARE CONCERNED WITH THE LA W AS IT STOOD PRIOR TO THE AMENDMENT OF SECTION 43B. IN THE CIRCUMSTANCES THE ASSESSEE WAS ENTITLED TO CLAIM TH E BENEFIT IN SECTION 43B FOR THAT PERIOD PARTICULARLY IN VIEW OF THE FACT THAT HE HAS CONTRIBUTED TO PROVIDENT FUND BEFORE FI LING OF THE RETURN.' 8. FOLLOWING THE OBSERVATIONS OF THE HON'BLE SUPREM E COURT IN VINAY CEMENT (SUPRA), THE DELHI HIGH COURT IN CI T V. AIMIL LTD. [2010] 321 ITR 508 (DELHI) HELD AT PAGE 518 AS UNDER : 'WE MAY ONLY ADD THAT IF THE EMPLOYEES' CONTRIBUTIO N IS NOT DEPOSITED BY THE DUE DATE PRESCRIBED UNDER T HE RELEVANT ACTS AND IS DEPOSITED LATE, THE EMPLOYER N OT ONLY PAYS INTEREST ON DELAYED PAYMENT BUT CAN INCUR PENA LTIES ALSO, FOR WHICH SPECIFIC PROVISIONS ARE MADE IN THE PROVIDENT FUNDS ACT AS WELL AS THE EMPLOYEES' STATE INSURANCE ACT. THEREFORE, THE ACT PERMITS THE EMPLOYER TO MAKE THE DEPOSIT WITH SOME DELAYS, SUBJECT TO THE AFORESAID CONSEQUE NCES. IN SO FAR AS THE INCOME-TAX ACT IS CONCERNED, THE ASSE SSEE CAN GET THE BENEFIT IF THE ACTUAL PAYMENT IS MADE BEFOR E THE RETURN IS FILED, AS PER THE PRINCIPLE LAID DOWN BY THE SUPREME COURT IN VINAY CEMENT [2009] 313 ITR (ST.) 1 (SC).' 9. IN VIEW OF THE SETTLED LEGAL POSITION, THE APPEA L PREFERRED BY THE REVENUE HAS NO SUBSTANCE AND THE SAME IS, TH EREFORE, DISMISSED. NO COSTS. IN VIEW OF THE ABOVE FACTS, CIRCUMSTANCES OF THE CA SE AND THE DECISIONS MENTIONED ABOVE, I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THUS THE APPEAL OF THE REVENUE IS DISMISSED . ITA NO.957/JP/2016 THE ITO,WARD- 2(3), JAIPUR VS. M/S. S. BROTHERS FAC ILITIES MANAGEMENT, JAIPUR 6 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 /01/2 017. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 5 /01/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ 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 FACILITIES MANAGE MENT JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 957/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR