DCIT, Circle-2(2), Hyderabad, Hyderabad V. TMI E2E Academy Pvt. Ltd., Secunderabad, Secunderabad

ITA 960/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2358 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 05-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Keywords: Tax effect
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 960/HYD/2017 ASSESSMENT YEAR: 2013-14 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(2), HYDERABAD VS M/S. TMI E2E ACADEMY PVT. LTD., SECUNDERABAD [PAN: AADCT7103K] (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. N. SWAPNA, DR FOR ASSESSEE : NONE DATE OF HEARING : 27-11-2017 DATE OF PRONOUNCEMENT : 29-11-2017 O R D E R THIS IS AN APPEAL BY REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-9, HYDERABAD, DATED 27-01-2017 ON THE ISSUE OF ALLOWANCE OF AMOUNTS PAID ON BEHALF OF THE EMPLOYEES CONTRIBUTION TOWARDS EPF AND ESI BELATE DLY. ASSESSEE HAS CONTRIBUTED CERTAIN AMOUNTS ALONG WITH EM PLOYEES CONTRIBUTION TOWARDS EPF AND ESI AND THE ASSESSING OFFI CER (AO) WHILE ALLOWING THE AMOUNTS PAID BEFORE FILING THE RETU RN OF INCOME BUT BELATEDLY AS PER THE PROVISIONS, HOWEVER, DISALLO WED THE EMPLOYEES CONTRIBUTION OF RS. 1,13,301/- TOWARDS EPF AND RS. 15,554/- UNDER ESI ON THE REASON THAT AS PER THE PROVI SIONS OF SECTION 36(1)(VA) R.W.S. 2(24)(X) OF THE ACT, IF THE EM PLOYEES CONTRIBUTION WAS NOT REMITTED WITHIN THE PRESCRIBED DUE DATE UNDER THE PF/ESI ACT, THE AMOUNT HAS TO BE TREATED AS I NCOME OF I.T.A. NO. 960/HYD/2017 :- 2 - : ASSESSEE. ON THAT REASON, HE DISALLOWED AN AMOUNT OF RS. 1,28,856/-. 2. LD.CIT(A) ON THE SUBMISSION OF ASSESSEE IN THE AP PEAL, HOWEVER, ALLOWED THE SAME STATING AS UNDER: 4. DURING THE COURSE OF APPELLATE PROCEEDINGS IT I S ARGUED THAT THE ABOVE AMOUNTS ARE PAID BEFORE FILING OF RETURN OF I NCOME UNDER SECTION 139(1) AND HENCE NO DISALLOWANCE IS CALLED FOR. IT IS ARGUED THAT AS PER AMENDED PROVISIONS OF SECTION 43B R.W.S. 36(1)(VA) EVEN IF THE EMPLOYEE CONTRIBUTION IS PAID AFTER DUE DATE PRESCRIBED IN T HE RESPECTIVE ACTS BUT BEFORE DATE OF FILING OF RETURN THE SAME IS ALLOWAB LE. ASSESSEE IN SUPPORT OF ITS CLAIM RELIED ON THE DECISIONS OF HON'BLE KARNAT AKA HIGH COURT IN THE CASE OF SABARI ENTERPRISES (298 ITR 141) AND SPECTR UM CONSULTANTS INDIA (P) LTD (34 TAXMANN.COM 20) AND VARIOUS OTHER DECIS IONS. I HAVE CONSIDERED THE ARGUMENTS OF THE ASSESSEE AND THE DE CISIONS RELIED UPON. IT IS NOT DISPUTED THAT THE AMOUNTS ARE PAID INTO GOVE RNMENT ACCOUNT BEFORE DUE DATE OF FILING OF INCOME TAX RETURN AND HENCE I FIND THAT THE AMOUNTS ARE ALLOWABLE AS DEDUCTION. I DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCES MADE. 3. REVENUE IS IN APPEAL ON THE ISSUE AND HAS RAISED THE FOLLOWING MATERIAL GROUND: 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHE THER THE CIT(A) IS CORRECT IN LAW IN HOLDING THAT THE PAYMENTS OF THE EMPLOYEES CONTRIBUTION TOWARDS EPF & ESI BY THE EMPLOYER ASSESSEE, WHICH I S NOT IN CONSONANCE WITH THE EXPLANATION TO SECTION 36(1)(VA) IS ENTITL ED FOR DEDUCTION U/S. 43B OF THE IT ACT. 4. INSPITE OF ISSUING NOTICES TO THE PARTY, NONE APPEA RED ON BEHALF OF ASSESSEE FOR THE POSTINGS ON 18-10-2017, 16 -11-2017 AND 27-11-2017. SINCE THE ISSUE IS COVERED, AFTER HEARI NG LD.DR, THE APPEAL IS DISPOSED OF EX-PARTE -RESPONDENT. 5. FIRST OF ALL, REVENUE SHOULD NOT COME IN APPEAL AS THE AMOUNT INVOLVED IS ONLY RS. 1,28,856/-, THE TAX EFFECT BEING EVEN I.T.A. NO. 960/HYD/2017 :- 3 - : LESS THAN RS. 1 LAKH. ON WHAT REASONS, THE REVENUE H AS COME IN APPEAL HAS NOT BEEN EXPLAINED, INSPITE OF ASKING THE DR TO EXPLAIN VIDE THE ORDER SHEET NOTING DT. 18-10-2017. REVENUE HAS RAISED THE GENERAL GROUND WITHOUT SPECIFYING THE AMOUNT INVOLVED. BY CDBT INSTRUCTION VIDE CIRCULAR NO.21/2015 DATED 10 TH DECEMBER, 2015, BEARING F.NO.279/-MISC.142/2007-ITJ(PT), REVENUE SH OULD NOT HAVE COME IN APPEAL BEFORE THE TRIBUNAL AS THE AMOUNT INVOLVED IS VERY SMALL. 6. BE THAT AS IT MAY, THE ISSUE IS ALSO COVERED IN FAV OUR OF ASSESSEE. REVENUE TRIED TO PLACE RELIANCE ON THE JUDG MENT OF HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS. MER CHEM LTD., [378 ITR 443] (KERALA) WHEREIN, THE HON'BLE HIGH COURT OF KERALA HAS HELD THAT ASSESSEE IS ENTITLED TO GET DEDUCTION OF AM OUNT AS PROVIDED U/S. 36(1)(VA) ONLY, IF THE AMOUNTS SO RECE IVED FROM EMPLOYEE IS CREDITED IN SPECIFIED ACCOUNT WITHIN DUE DATE AS PROVIDED UNDER THE RELEVANT STATUTE. 7. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CI T VS. SABARI ENTERPRISES [298 ITR 141] (KAR) AND IN THE CA SE OF SPECTRUM CONSULTANTS INDIA (P.) LTD., VS. CIT [34 TAXMA NN.COM 20] (KARNATAKA) HAS ALLOWED THE DEDUCTION ON EMPLOYEES CONTRIBUTION ALSO, REMITTED AFTER DUE DATES PRESCRIBED UNDER THE S AID STATUTES, BUT BEFORE DUE DATE FOR FILING RETURN OF INCOME U/S. 139. SIMILAR VIEW WAS HELD IN THE FOLLOWING CASES: I. CIT VS. KICHHA SUGAR COMPANY LTD (ITA NO. 50 OF 200 9) (UTTARAKHAND HC); II. CIT VS. AIMIL LTD., [321 ITR 508] (DEL); I.T.A. NO. 960/HYD/2017 :- 4 - : III. CIT VS. NIPSO POLYFABRICKS LTD., [350 ITR 327] (HP); IV. CIT VS. UDAIPUR DUGDH UTPADAK SAHAKARI SANDH LTD [TAXMANN.COM 616] (RAJ); V. CIT VS. HEMLA EMBROIDERY MILLS (P) LTD., [37 TAXMANN. COM 160 (P&H); 8. THERE IS NO JURISDICTIONAL HIGH COURT JUDGMENT SO F AR ON THIS ISSUE. SINCE THE JURISDICTIONAL HIGH COURT HAS NOT DEC IDED THE ISSUE, THE ISSUE HAS TO BE DECIDED IN FAVOUR OF ASSES SEE, AS A JUDICIAL PRINCIPLE. IN VIEW OF THAT, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHO FOLLOWED THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT AND OTHER DECISIONS. MOR EOVER, AS ALREADY STATED, ON TAX EFFECT ALSO, THE APPEAL SHOULD NO T HAVE BEEN PREFERRED BY THE REVENUE. FOR THESE REASONS, I FIND NO MERIT IN REVENUES GROUNDS, HENCE DISMISSED. 9. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 29 TH NOVEMBER, 2017 TNMM I.T.A. NO. 960/HYD/2017 :- 5 - : COPY TO : 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2( 2), HYDERABAD. 2. M/S. TMI E2E ACADEMY PVT. LTD., CAREER CENTRE, 1-8-303/48/12, PENDERGHAST ROAD, SECUNDERABAD. 3. CIT (APPEALS)-9, HYDERABAD. 4. PR.CIT-2, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.