DEPUTY COMMISSIONER OF INCOME TAX, Jaipur V. RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD., Jaipur

ITA 972/JPR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3627 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 11-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLI AGARWAL
• Section: 43B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 972/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2001-02 THE DCIT, CIRCLE- 6, JAIPUR. CUKE VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD., VIDYUT BHAWAN, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCR 7436 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA. NO. 977/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2001-02 THE DCIT, CIRCLE- 6, JAIPUR. CUKE VS. M/S RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LTD., VIDYUT BHAWAN, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCR8312A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. ROLI AGARWAL (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 02/05/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 03/05/2018 VKNS'K@ ORDER ITA NO. 972 &977/JP/2017 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD.AND OTHERS 2 PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE RESPECTIVE ASSE SSEES AGAINST THE ORDERS OF LD. CIT(A), BIKANER OF EVEN DATE I.E 30.8.2017 FOR AY 2001-02. SINCE COMMON ISSUES ARE INVOLVED, BOTH THE SE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER. IN ITA NO. 972/JP/2017, THE REVENUE HAS TAKEN THE FOLL OWING GROUNDS OF APPEAL AS UNDER:- (I) WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE AD DITION OF RS. 3,53,31,946/- MADE BY THE AO FOR DEPOSITING THE EMPLOYEE'S CONTRIBUTION TO PF & ESI BEYOND THE PRES CRIBED TIME LIMIT PROVIDED IN RESPECTIVE ACTS.' (II) 'WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT EMPLOY EE'S CONTRIBUTION TO PF & ESI ARE GOVERNED BY THE PROVIS ION OF SECTION 43B AND NOT BY SECTION 36(1)(VA) R.W.S. 2(2 4)(X) OF THE I.T. ACT.' (III) 'WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE ID. CIT(A) IS JUSTIFIED IN HOLDING THAT THE PAYMENT OF RS. 26,24,224/- TO THE GRATUITY FUND OF M/S RAJASTH AN RAJYA VIDYUT KARMCHARI GRATUITY TRUST IS ADMISSIBLE DEDUC TION, PARTICULARLY WHEN THE FUND IS NOT IN THE ASSESSEE'S NAME AND THERE IS NO EVIDENCE TO SHOW THAT THE FUND HAS BEEN CREATED FOR THE BENEFIT OF ASSESSEE'S EMPLOYEES.' (IV) 'WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING THE CLAIM OF RS. 57,50,000/- ON ACCOUNT OF BONUS PAYMENT WITHOUT APP RECIATING THE FACT THAT THE SAME WAS NOT CLAIMED BY THE ASSES SEE IN RETURN OF INCOME.' ITA NO. 972 &977/JP/2017 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD.AND OTHERS 3 (V) 'WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE ID. CIT(A) WAS JUSTIFIED IN DELETING THE AD DITION OF RS. 1,14,85,104/- MADE ON ACCOUNT OF DISALLOWANCE O F PENSION PAYMENT BY CONSIDERING THE ADDITIONAL EVIDE NCE WITHOUT PROVIDING OPPORTUNITY TO THE AO AS PER RULE -46A.' 2. REGARDING GROUND NOS. 1 AND 2, BRIEFLY THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER OBSERVED THAT THE CONTRIBUTION TOWARDS CPF, GPF & E PF HAVE NOT BEEN PAID TO THE CREDIT OF GOVERNMENT WITHIN THE TIME PR ESCRIBED UNDER THE RELEVANT PROVISIONS, ACCORDINGLY, HE DISALLOWED AN AMOUNT OF RS. 3,53,31,946/- U/S 43B OF THE ACT. 3. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE RELIED ON THE DECISIONS OF HONBLE RAJASTHAN HIGH IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR 99 DTR 131, CIT VS. JAIPUR VIDYUT VITRAN NIGAM LTD. 98 DTR 105 AND CIT VS. UDAIPUR D UGDH UTPADAK SAHARI SANGH LTD. 98 DTR 109 AND SUBMITTED THAT THE ASSESSEE HAS DEPOSITED THE ENTIRE CPF, GPF, EPF AND ESI BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSEE HAS DEPOSITED THE CONTRIBUTION TO WARDS CPF, GPF, EPF AND ESI BEFORE THE DUE DATE OF FILING OF THE INCOME TAX RETURN. THE LD. CIT(A) FURTHER OBSERVED THAT THE DECISIONS OF THE H ONBLE RAJASTHAN HIGH COURT RELIED UPON BY THE ASSESSEE SUPPORTED IT S CASE THAT IF EMPLOYEES CONTRIBUTION TOWARDS PF, IF PAID AFTER TH E DUE DATE UNDER THE RESPECTIVE ACTS BUT BEFORE FILING OF RETURN OF INCO ME U/S 139, THE SAME CANNOT BE DISALLOWED U/S 43B OR U/S 36(1)(VA) OF TH E ACT. THEREAFTER THE LD. CIT(A) REFERRED TO THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. ALOM EXTRUSIONS LTD. 319 ITR 306 AND DIRECTED THE AO ITA NO. 972 &977/JP/2017 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD.AND OTHERS 4 TO VERIFY THE DATES OF PAYMENTS OF EMPLOYEES CONTR IBUTION TOWARDS PF AND ESI AND DELETE THE ADDITION MADE ON THIS ACCOUN T, IF THE PAYMENTS HAVE BEEN MADE BEFORE THE DUE DATE OF FILING OF RET URN OF INCOME BY THE APPELLANT. 4. DURING THE COURSE OF HEARING, THE LD. DR HAS SUB MITTED THAT THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF HONBLE RAJASTHAN HIGH COURT AND THE SAME HAS BEEN CHALLENGED BEFORE THE H ONBLE SUPREME COURT IN CASE OF JVVNL AND THE ISSUES IS CURRENTLY PENDING ADJUDICATION BEFORE THE HONBLE SUPREME COURT. 5. PER CONTRA, THE LD. AR HAS REITERATED THE SUBMIS SIONS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE MATTER IS SQU ARELY COVERED BY THE DECISIONS OF HONBLE RAJASTHAN HIGH COURT. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND WE DO NOT THINK THAT THERE IS ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOLLOWING THE DECISIONS OF THE HONBLE RAJASTHAN HIGH COURT REFERRED SUPRA AND IN DIRECTING THE AO T O VERIFY THE DATES OF PAYMENT OF EMPLOYEES CONTRIBUTION AND DELETE THE S AME, IF THE PAYMENTS HAVE BEEN MADE BEFORE THE DUE DATE OF FILI NG OF THE RETURN OF INCOME. IN THE RESULT, THE GROUNDS TAKEN BY THE REV ENUE ARE DISMISSED. 7. REGARDING GROUND NO. 3, BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY HAS CONTRIBUTED AN AMOUNT OF RS. 2 6,24,224/- TOWARDS GRATUITY FUND AND THE SAME WAS CLAIMED ON P AYMENT BASIS. THE ASSESSING OFFICER HOWEVER, DISALLOWED THE CLAIM OF THE ASSESSEE ON THE ITA NO. 972 &977/JP/2017 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD.AND OTHERS 5 GROUND THAT THOUGH THE ASSESSEE HAS FILED APPROVAL GRANTED OF M/S RAJASTHAN RAJYA KARMCHARI GRATUITY TRUST, IT IS HOW EVER, NOT ESTABLISHED WHETHER IT IS WILL ALSO APPLY TO THE CASE OF THE AS SESSEE COMPANY. 8. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E THE LD. CIT(A), THE LD. AR HAS SUBMITTED THAT THE GRATUITY FUND OF THE ASSESSEE COMPANY IS DULY APPROVED AND A COPY OF THE APPROVAL CERTIFICATE WAS FILED BEFORE THE LD. CIT(A). IT WAS SUBMITTED THAT THE SAID GRATUITY TRUST IS FOR ALL THE FIVE COMPANIES FORMED AS A RESULT OF UNBUNDLING EXERCISE FROM THE ERSTWHILE RSEB. THE LD. CIT(A) HAS RETURN A FINDING THAT THE GRATUITY FUND OF THE ASSESSEE COMPANY IS DULY APPRO VED AND A CERTIFICATE TO THIS EFFECT HAS BEEN PLACED ON RECOR D. ACCORDINGLY, HE DELETED THE DISALLOWANCE OF RS. 26,24,224/- MADE BY THE ASSESSING OFFICER. 9. DURING THE COURSE OF HEARING BOTH THE PARTIES RE ITERATED THEIR RESPECTIVE POSITIONS TAKEN BEFORE THE LOWER AUTHORI TIES. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF LD. CIT(A) WHERE HE HAS RETURNED A FINDING THAT THE PAYMENT HAS BEEN MA DE TO THE APPROVED GRATUITY TRUST. DURING THE COURSE OF HEARI NG, AT THE POINTED QUESTION RAISED BY THE BENCH, THE LD AR SUBMITTED T HAT THE SAID GRATUITY TRUST THOUGH CALLED AS M/S RAJASTHAN RAJYA KARMCHAR I GRATUITY TRUST IS FOR ALL THE FIVE COMPANIES FORMED AS A RESULT OF UN BUNDLING EXERCISE FROM THE ERSTWHILE RSEB AND THE ASSESSEE COMPANY HA S CONTRIBUTED TO THE SAID TRUST IN RELATION TO ITS EMPLOYEES. HENCE , THE FINDINGS OF THE LD ITA NO. 972 &977/JP/2017 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD.AND OTHERS 6 CIT(A) ARE CONFIRMED AND THE GROUND TAKEN BY THE RE VENUE IS DISMISSED. 10. REGARDING GROUND NO. 4, BRIEFLY THE FACTS OF TH E CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE VIDE ITS LETTER DATED NIL HAS CLAIMED DEDUCTION TOWARDS BONU S PAYMENT OF RS. 57,50,000/- PERTAINING TO THE EARLIER YEAR ON PAYME NT BASIS. HOWEVER, THE AO DID NOT ALLOW THE SAME AND THERE IS NO DISCU SSION THEREOF IN THE ASSESSMENT ORDER. DURING THE COURSE OF APPELLATE PR OCEEDINGS, THE ASSESSEE SUBMITTED THAT BY MISTAKE, IT DID NOT CLAI M THE DEDUCTION OF RS. 57,50,302/- IN THE RETURN OF INCOME HOWEVER, TH E CLAIM WAS MADE AND NECESSARY DETAILS OF ACTUAL PAYMENT OF THE BONU S WERE SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD CIT(A) RETURNED A FINDING THAT SINCE THE PAYMENT IS MADE DURING THE Y EAR, THE SAME IS ALLOWABLE AS DEDUCTION U/S 43B OF THE ACT ON PAYMEN T BASIS. 11. DURING THE COURSE OF HEARING, BOTH THE PARTIES REITERATED THEIR RESPECTIVE CONTENTIONS AS MADE BEFORE THE LOWER AUT HORITIES AND AFTER CONSIDERING THE SAME, WE DO NOT SEE ANY INFIRMITY I N THE ORDER OF THE LD. CIT(A) WHO HAS ALLOWED THE CLAIM OF BONUS ON PAYMEN T BASIS UNDER THE PROVISIONS OF SECTION 43B OF THE ACT. HENCE, THE G ROUND TAKEN BY THE REVENUE IS DISMISSED. 12. REGARDING GROUND NO. 5, BRIEFLY THE FACTS OF TH E CASE ARE THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS. 1,14,85,104/- ON ACCOUNT OF PENSION PAYMENT DURING THE YEAR IN RESPECT OF ITS E MPLOYEES. THE AO DISALLOWED THE SAME BY OBSERVING THAT THE PENSION/S UPERANNUATION FUND ITA NO. 972 &977/JP/2017 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD.AND OTHERS 7 DID NOT HAVE THE APPROVAL OF THE COMPETENT AUTHORIT Y. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE SUBMITTED A COPY OF THE APPROVAL AND SUBMITTED THAT THE PENSION FUND OF THE ASSESSEE COMPANY IS DULY APPROVED. THE LD. CIT(A) HAS RETURNED A FINDING THA T THE PENSION FUND OF THE ASSESSEE IS DULY APPROVED AS EVIDENT FROM TH E CERTIFICATE PRODUCED BEFORE HIM AND ACCORDINGLY DELETED THE ADD ITION MADE BY THE AO. 13. DURING THE COURSE OF HEARING BOTH THE PARTIES R EITERATED THEIR RESPECTIVE POSITIONS AS TAKEN BEFORE THE LOWER AUTH ORITIES. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MA TERIAL AVAILABLE ON RECORD AND WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN ALLOWING THE CLAIM OF PENSION PAYMENT TO AN APPROVE D PENSION FUND. HENCE, THE GROUND TAKEN BY THE REVENUE IS DISMISSED . ITA NO. 977/JP/2017 14. IN ITA NO. 977/JP/2017 IN RELATION TO M/S RAJAS THAN RAJYA VIDYUT PRASARAN NIGAM LTD., BOTH THE PARTIES FAIRLY SUBMIT TED THAT FACTS AND CIRCUMSTANCES OF THE CASE ARE EXACTLY IDENTICAL AS IN ITA NO. 972/JP/2017 AND SIMILAR GROUNDS OF APPEAL HAVE BEEN TAKEN BY T HE REVENUE. GIVEN THE FACT THAT THE FACTS AND CIRCUMST ANCES ARE IDENTICAL, OUR FINDINGS AND DIRECTIONS AS CONTAINED IN ITA NO. 972/JP/2017 SHALL APPLY MUTATIS MUTANDIS TO THIS MATTER AS WELL. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ITA NO. 972 &977/JP/2017 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD.AND OTHERS 8 ORDER PRONOUNCED IN THE OPEN COURT ON 03/05/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03/05/2018. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- DCIT, CIRCLE-6, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM LTD./ M/S RAJASTHAN RAJYA VIDYUT PRASARAN NI GAM LTD., JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 972 & 977/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR