ASSTT.COMMISSIONER OF INCOME TAX CIRCLE-2, Nagpur V. M/s Western Coalfields Limited, Nagpur

MA 15/NAG/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5759 (ITAT-NAGPUR)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-07-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2024
• Assessment Year: 2010-2011
• Appeal Filed On: 13-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Assessee Lawyers: PRAKASH NANWANI
• Keywords: Tax effect
• Section: 43B; 143(3); 191; 194J

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER MA No. 15/NAG/2024 (Arising out of ITA No. 109/NAG/2018 (Assessment Year : 2010-11) Assistant Commission of Income Tax, Circle-2, Nagpur ................ Appellant v/s Western Coalfields Limited Civil Lines, Nagpur. ................ Respondent AND MA No. 16/NAG/2024 (Arising out of ITA No. 243/NAG/2018 (Assessment Year : 2006-07) Deputy Commission of Income Tax, Circle-2, Nagpur ................ Appellant v/s Western Coalfields Limited Civil Lines, Nagpur. ................ Respondent Assessee by : Shri Prakash Nanwani, CA Revenue by : Shri Abhay Y. Marathe, Sr. DR Date of Hearing – 19/07/2024 Date of Order – 19/07/2024 ACIT Circle-2, Nagpur vs. WCL MA NOS. 15 & 16/NAG/2024 (ARISING OUT OF ITA No.109 & 243/Nag./2018) Page | 2 O R D E R PER V. DURGA RAO, J.M MA NO. 16/NAG/2015 The present Miscellaneous Application No. 15/NAG/2024 is arising out of ITA No. 109/NAG/2018, wherein the appeal of the revenue was dismissed. 2. The department vide Miscellaneous Petition dated 13.03.2024 has submitted as follows: “1. Miscellaneous Petition is filed on the order of the Hon ble ITAT Nagpur bench, Nagpur dated 27.07.2023 received in the office of Pr. CIT on 06.11.2023 in Appeal No ITA 109/NAG./2018 in the case of M/s Western Coalfields Limited, Nagpur, for the A. Y. 2010-11. 2. 11 In this case, the assessee has filed its return of income for A.Y. 2010- on 13.10.2010 declaring total income of Rs. 1234,29,04,840/-. Subsequently a revised return was e-filed on 26.03.2012 declaring total income of Rs. 1210,68,71,391/-. In this case order u/s 143(3) was passed on 22.02.2013 determining taxable income of Rs. 154854.74 lacs. The assessee preferred an appeal before CIT(A)-2, Nagpur. In this case, the appeal filed by the assessee against the order passed u/s. 143(3) of the Act dated 22/02/2013 was decided by the CIT(A) vide its order in appeal No. CIT (A)-2/486/2012-13 dated 20/02/2018. The CIT (A) partly allowed the appeal of the assessee. All the major additions made were decided in favour of the assessee. 3. The Assessing Officer has accepted the decision of CIT(A) on all the issues except issue No. 6 i.e. addition of Rs. 56.34 lakhs under section 2(24)(x) of the Act read with section 43B of the Act. The AO held that there is contribution from employees and as the same is income in terms of provisions of section 2(24)(x) read with Section 43B of the Act, 1961. The AO, thus, recommended further appeal on the issue before the Hon'ble ITAT Nagpur Bench, Nagpur on the following grounds of appeal ACIT Circle-2, Nagpur vs. WCL MA NOS. 15 & 16/NAG/2024 (ARISING OUT OF ITA No.109 & 243/Nag./2018) Page | 3 1. On the facts and circumstances of the case, and also in view of the decision of the Apex Court in the case of M/s. Alom Extrusion Limited and others reported at 319 ITR 306(SC), the learned CIT(A)-2, Nagpur erred in deleting the addition made by the AO amounting to Rs. 56.34 lakhs u/s. 2(24)(x) of the Act, 1961 for non deduction of taxes u/s. 194J of the I.T.Act, 1961. 2. Any other ground which may be raised during the course of hearing. 4. The Hon'ble ITAT, Nagpur Bench, Nagpur (through virtual court) vide its order in ITA No. 109/NAG/2018 dated 27/07/2023 dismissed the appeal filed by the revenue. It is held that admittedly, the tax effect involved in the appeal is below monetary limit fixed by the CBDT Circular vide its latest circular No. 17/2019 dated 08/08/2019 and are not falling under the exceptions provided under the above said circular. Thus, grounds raised by the revenue in the appeal fails and the appeal is not maintainable. Therefore, the appeal of Revenue was dismissed as withdrawn with a liberty to file appropriate application for restoration of appeal to the file. 5. In this case, it is noticed that the Hon'ble ITAT, Nagpur Bench, Nagpur vide its order dismissed revenue's appeal without appreciating the provisions of section 36(1)(va) r.w.s 2(24)(x) as held by Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs CIT (2022) 143 taxman.com 178(SC) vide order dated 12.10.2022. In view of the above, the Hon'ble ITAT be pleased to recall its order and adjudicate upon the grounds of appeal raised by Revenue on merits, 6.. There is mistake apparent from record in the order of the Hon'ble ITAT dated 27.07.2023. Hence, this miscellaneous application is submitted after obtaining prior approval of Pr. CCIT, Nagpur vide F. No. PCCIT/NGP/Tech./Judl./260A/WCL/2023-24 dated 01/03/2024 (copy enclosed).” 3. We have perused the assessment order to examine the issue. In paragraph 8 of the Assessment Order, the Assessing Officer has made a detailed observation in the Assessment Order, as follow: ACIT Circle-2, Nagpur vs. WCL MA NOS. 15 & 16/NAG/2024 (ARISING OUT OF ITA No.109 & 243/Nag./2018) Page | 4 “8. Employee Contribution: As in the last year, difference in contribution towards following heads is proposed for disallowance. (Amount in Lakh) 31.03.2010 31.03.2009 Difference 1. Employee contribution to employee welfare fund 21.29 19.40 1.89 2. WCL RCC Charitable Fund 8.29 6.75 1.54 3. Natural Calamity Fund 59.57 6.66 52.91 Total 89.81 32.81 56.34 The assessee submitted its reply as under: Employees' Welfare Fund (FC 470118) Increase of Rs.1.89 lakhs In case of Employee's Welfare Fund, contributions collected from the salary (fractional amount) of the employees are deposited into the fund and expenditure of welfare nature is met from this fund with the consent of the concerned committee of the fund. The balance in fund is used as and when it is required and therefore, it is a running accounting. WCL RCC Charitable fund Rs.1.54 lakhs. In the Record Note of the Regional Coal Consumers Council Meet held on 21.12.1997, it was decided that refund cases to customers for Rs.100 or below is to be transferred to Welfare fund and the cases will be treated as closed. Accordingly an amount of Rs.1.54 lacs is transferred to WCL RCCC Charitable fund during F.Y. 2009-10. Natural calamity fund (FC 470119) Addition of Rs.52.91 lakhs In the meeting of the standard Committee of JBCCI-VI, held on January 16, 2003 at CIL, Kolkata, it was decided to create a Natural Calamity Fund which will be maintained by CIL, Kolkata. According to the scheme all employees will contribute Rs.2/- per month through their salary. The amount so deducted will be remitted to CIL by the subsidiaries and kept in a separate account to be utilized in case of natural calamities. ACIT Circle-2, Nagpur vs. WCL MA NOS. 15 & 16/NAG/2024 (ARISING OUT OF ITA No.109 & 243/Nag./2018) Page | 5 The fund will be monitored by a committee consisting of representatives of central trade unions representing JBCCI. Contribution from the employees are collected under the instructions of the governing body for the welfare activities. 8.1: Reply of the Assessee perused. As regards the collection towards funds, the excess amounts represent contribution from the employees to the company. The excess contribution collected from the employees is considered as income within the meaning of provisions of Sec.2(24)(x) of the I.T. Act and therefore in view of the definition of the income as well as in view of decision of Kolkata High court in the case of Kesoram Industries and Cotton mills ltd. 191 ITR 518, if any particular amount neither deposited nor transferred, then it is to be treated as income of the previous year in which the contribution was received. Therefore in view of the definition as well as the decision of the Kolkata High Court, the amount of Rs.56.34 lakhs is considered as income chargeable to tax. 4. We find that none of the funds can be ascribed to the funds mentioned u/s 2(24)(x) r/w Section 36(1)(va) of I.T. Act, 1961. These are the funds for which there is no specified due date. Hence, the miscellaneous application is clearly not maintainable. The reliance made on Checkmate Services Pvt. Ltd vs. CIT (2022) 143 taxman.com 178 (SC) is improper and cannot be ascribed to. 5. In the result, the MA No. 15/NAG/2023 filed by the department is dismissed. MA NO. 16/NAG/2015 6. Since the facts are similar, except with the variations in the numerical figures, by following the rational of our order under MA No. 15/NAG/2024, we dismiss this miscellaneous application also. ACIT Circle-2, Nagpur vs. WCL MA NOS. 15 & 16/NAG/2024 (ARISING OUT OF ITA No.109 & 243/Nag./2018) Page | 6 7. As a result, both the departmental Miscellaneous Application Nos. 15/NAG/2024 and 16/NAG/2024 are dismissed. Order pronounced in the open Court on 19/07/2024. Sd/-- K.M. ROY ACCOUNTANT MEMBER Sd/- V. DURGA RAO JUDICIAL MEMBER NAGPUR, DATED: 19/07/2024 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Rajesh V. Jalit Private Secretary (On contract) Sr. Private Secretary ITAT, Nagpur