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

ITA 973/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2092 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2002-2003
• Appeal Filed On: 11-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L R MEENA
• 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 HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 973 & 974/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2002-03 & 2003-04 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 FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI L.R. MEENA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 20/02/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 23/02/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST T WO SEPARATE ORDERS OF CIT (A), BIKANER BOTH DATED 29.08.2017 FO R THE ASSESSMENT YEARS 2002-03 & 2003-04 RESPECTIVELY. THE REVENUE H AS RAISED THE COMMON GROUNDS IN THESE APPEALS AS UNDER:- (I) WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE AD DITION OF RS. 5,28,47,010/- MADE BY THE AO FOR DEPOSITING THE EMP LOYEES ITA NO. 973 &974/JP/20174 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM L TD. 2 CONTRIBUTION TO PF & ESI BEYOND THE PRESCRIBED TIME LIMIT PROVIDED IN RESPECTIVE ACT. (II) WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT EM PLOYEES CONTRIBUTION TO PF & ESI ARE GOVERNED BY THE PROVIS ION OF SECTION 43B AND NOT BY SECTION 36(1)(VA) R.W.S. 2(24)(X) OF THE I.T. ACT. (III) THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND , ALTER ANY OF THE GROUNDS ON OR BEFORE HEARING. 2. THE ONLY COMMON ISSUES RAISED IN THESE TWO APPEA LS BY THE REVENUE IS REGARDING THE DISALLOWANCE MADE BY THE A O IN RESPECT OF EMPLOYEES CONTRIBUTION TO PF & ESI BEYOND THE PRES CRIBED TIME LIMIT PROVIDED IN RESPECTIVE ACTS BUT BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME WHICH WAS DELETED BY THE LD. CIT(A). 3. WE HAVE HEARD LD. DR AS WELL AS LD. AR AND CONSI DERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET WE NOTE THAT THIS ISSUE IS NOW COVERED BY THE DECISION OF HONBLE JURISDICTION HI GH COURT IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR 99 DTR 131 A S WELL AS THE DECISION IN CASE OF CIT JAIPUR VIDYUT VITRAN NIGAM LTD. 98 DTR 105. THE LD. CIT(A) HAS CONSIDERED AND DECIDED THIS ISSUE BY FOLLOWING DECISIONS OF HONBLE JURISDICTION HIGH COURT IN PARA 2.3 IS A S UNDER:- 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION MADE. IT IS SEEN THAT THE ASSESSEE HAS DEPOSITED TH E CONTRIBUTION TOWARDS CPF, GPF, EPF AND ESI BEFORE THE DUE DATE O F FILING OF ITA NO. 973 &974/JP/20174 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM L TD. 3 THE INCOME TAX RETURN. THE DECISION OF RAJASTHAN HI GH COURT RELIED BY THE LD. AR SUPPORTS THE CASE OF THE APPEL LANT WHEREIN IT IS HELD THAT IF EMPLOYEES CONTRIBUTION TOWARDS PF, IF PAID AFTER THE DUE DATE UNDER THE RESPECTIVE ACTS BUT BEFORE F ILING OF RETURN OF INCOME U/S 139(1), CANNOT BE DISALLOWED U/S 43B OR U/S 36(1 )(VA) OF THE ACT. DURING THE COURSE OF APPELLATE PR OCEEDINGS, THE APPELLANT SUBMITTED THAT ESI & PF WERE DEPOSITED WI TH IN THE FINANCIAL YEAR AND HENCE DEDUCTION COULD NOT BE DEN IED IN VIEW OF DECISIONS OF VARIOUS COURTS, RATIO OF WHICH HAVE HELD THAT PAYMENT OF ESI AND PF BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME IS AN ALLOWABLE DEDUCTION. ON OVERALL APPREC IATION OF THE FACTS, I TEND TO AGREE WITH THE APPELLANTS CLAIM. THE HON'BLE SUPREME COURT IN CASE OF CIT VS. ALOM EXTRUSIONS LT D. REPORTED IN 319 ITR 306 HELD THAT OMISSION OF SECOND PROVISO TO SEC 43B AND THE AMENDMENT OF FIRST PROVISO BY FINANCE ACT, 2003, BRINGING ABOUT UNIFORMITY IN PAYMENT OF TAX, DUTY, CESS AND FEE ON ONE HAND AND CONTRIBUTION TO EMPLOYEES WELFARE FUNDS ON THE OTHER, ARE CURATIVE IN NATURE, AND THUS, EFFECTIVE RETROSPECTIVELY W.E.F. 1-4-88 I.E. THE DATE OF INSERTION OF FIRST P ROVISO. IT WAS FURTHER HELD THAT WHERE PROVIDENT FUND AND EMPLOYEE S STATE INSURANCE CONTRIBUTION WERE PAID BY THE ASSESSEE BE FORE FILING OF THE RETURN AND PROOF OF PAYMENT WAS SUBMITTED BEFOR E THE ASSESSING OFFICER, THE AMOUNTS WERE DEDUCTIBLE AS D EDUCTION. THE HON'BLE DELHI HIGH COURT IN CASE OF CIT VS. AIM IL LTD & ORS. REPORTED IN 321 ITR 508 HELD AS UNDER:- AS SOON AS EMPLOYEES CONTRIBUTION TOWARDS PF OR E SI IS RECEIVED BY THE ASSESSEE BY WAY OF DEDUCTION OR OTHERWISE FR OM THE SALARY/ WAGES OF THE EMPLOYEES, IT WILL BE TREATED AS INCOME AT THE HANDS OF THE ASSESSEE. IT CLEARLY FOLLOWS THERE FROM THAT IF THE ASSESSEE DOES NOT DEPOSIT THIS CONTRIBUTION WITH PF /ESI AUTHORITIES, IT WILL BE TAX AS INCOME AT THE HANDS OF THE ASSESSEE. HOWEVER, ON MAKING DEPOSIT WITH THE CONCERNED AUTHO RITIES, THE ASSESSEE BECOMES ENTITLED TO DEDUCTION UNDER THE PR OVISIONS OF S. ITA NO. 973 &974/JP/20174 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM L TD. 4 36(1 )(VA). SEC. 43B(B), HOWEVER, STIPULATES THAT S UCH DEDUCTION WOULD BE PERMISSIBLE ONLY ON ACTUAL PAYMENTS. THIS IS THE SCHEME OF THE ACT FOR MAKING AN ASSESSEE ENTITLED TO GET D EDUCTION FROM INCOME INSOFAR AS EMPLOYEES CONTRIBUTION IS CONCER NED. DELETION OF THE SECOND PROVISO HAS BEEN TREATED AS RETROSPEC TIVE IN NATURE AND WOULD NOT APPLY AT ALL. THE CASE IS TO BE GOVER NED WITH THE APPLICATION OF THE FIRST PROVISO. IF THE EMPLOYEES' CONTRIBUTION IS NOT DEPOSITED BY THE DUE DATE PRESCRIBED UNDER THE RELEVANT ACTS AND IS DEPOSITED LATE, THE EMPLOYER NOT ONLY PAYS I NTEREST ON DELAYED PAYMENT BUT CAN INCUR PENALTIES ALSO, FOR W HICH SPECIFIC PROVISION ARE MADE IN THE PROVIDENT FUND ACT AS WEL L AS THE ESI ACT. THEREFORE, THE ACTS PERMIT THE EMPLOYER TO MAK E THE DEPOSIT WITH SOME DELAYS , SUBJECT TO THE AFORESAID CONSEQU ENCES. INSOFAR AS THE I T ACT IS CONCERNED, THE ASSESSEE CAN GET T HE BENEFIT IF THE ACTUAL PAYMENT IS MADE BEFORE THE RETURN IS FIL ED. - CIT VS. VINAY CEMENT LTD. (2007) 213 CTR (SC) 268, CIT VS. DHARMENDRA SHARMA (2007) 213 CTR (DEL) 609 : (2008) 297 ITR 32 0 (DEL) AND CIT VS. P. M. ELECTRONICS LTD. (2008) 220 CTR (DEL) 635 : (2008) 15 DTR (DEL) 258 FOLLOWED.' APART FROM THE ABOVE DECISIONS, THE FOLLOWING DECIS IONS ARE ALSO APPLICABLE ON THE ISSUE AT HAND:- I. DY CIT VS. ORBIT RESORTS (P) LTD (48 SOT 23 (URO) II. ACIT VS. RANABAXY LABORATORIES LTD. (2011) 7 ITR ( TRIB) 161 (DLH) III. ACIT VS. M/S. ANIL SPECIAL STEEL INDUSTRIES LTD. ( DECISION OF JAIPUR BENCH IN ITA NO. 1100/JP/2011) FROM THE ABOVE DECISIONS, IT IS CLEAR THAT PAYMENT OR CONTRIBUTION MADE TO THE PROVIDENT FUND AUTHORITY ANY TIME BEFOR E FILING OF THE RETURN FOR THE YEAR IN WHICH THE LIABILITY TO PAY A CCRUED IS AN ALLOWABLE EXPENDITURE. LIKEWISE, IN THE PRESENT CAS E, THE EMPLOYEES CONTRIBUTION WAS DEPOSITED BY THE APPELL ANT BEFORE DUE DATE FOR FILING OF RETURN OF INCOME, THEREFORE, IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT VS. ALOM ITA NO. 973 &974/JP/20174 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM L TD. 5 EXTRUSIONS LTD (SUPRA) AND DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LTD & ORS (SUPRA ), THE PAYMENTS MADE BEFORE DUE DATE FOR FILING OF RETURN OF INCOME ARE ALLOWABLE. THE AO IS DIRECTED TO VERIFY THE DATES OF PAYMENT O F EMPLOYEES CONTRIBUTION TOWARDS PL AND ESI AND DELETE THE ADDI TION MADE ON THIS ACCOUNT IF THE PAYMENTS HAVE BEEN MADE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME BY THE APPELLANT. CON SIDERING THE FACTUAL AND LEGAL POSITION AS DISCUSSED ABOVE, THE AO IS DIRECTED TO VERIFY AND ALLOW AS PER LAW. THIS GROUND OF APPE AL IS ALLOWED. THOUGH THE REVENUE HAS NOT ACCEPTED THE DECISION OF HONBLE JURISDICTION HIGH COURT, HOWEVER, IN VIEW OF THE BI NDING PRECEDENT OF THE HONBLE JURISDICTION HIGH COURT IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR (SUPRA) WE DO NOT FIND ANY ERROR OR ILLEGA LITY IN THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. IN THE RESULT, THE APPEALS FILED BY THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/02/2018 SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23/02/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- DCIT, CIRCLE-6, JAIPUR. ITA NO. 973 &974/JP/20174 DCIT VS. M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM L TD. 6 2. IZR;FKHZ@ THE RESPONDENT- M/S RAJASTHAN RAJYA VIDYUT UTPADAN NIGAM 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. 973 &974/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR