NESCO LTD, V. DCIT 9(2),

MA 230/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8203 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2002-2003
• Appeal Filed On: 12-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP, ACCONTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER MA NO.230/MUM/2011 ARISING OUT OF ITA NO.5515/MUM/2005 FOR A.Y. 2002-0 3 M/S. NESCO LTD., NESCO ESTATE, W.E. HIGHWAY, GOREGAON (EAST), MUMBAI -400 063 ....... APPLICANT VS DY. COMMISSIONER OF INCOME-TAX 9(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI -400 020 ..... RESPONDENT PAN: AAACN 1222 E APPLICANT BY: SHRI HARESH P. SHAH RESPONDENT BY: SHRI D.S. SUNDER SINGH DATE OF HEARING: 13.04.2012 DATE OF PRONOUNCEMENT: 27.04.2012 O R D E R PER R.S. PADVEKAR, JM THIS MISC. APPLICATION IS FILED BY THE ASSESSEE U/S .254(2) OF THE ACT WITH A PRAYER TO RECTIFY THE ORDER PASSED IN IT A 5515/MUM/2005 DATED 10.12.2008 FOR THE A.Y. 2002-03. 2. ONE OF THE ISSUES IN THE APPEAL FILED BY THE ASS ESSEE WAS THE DISALLOWANCE ON ACCOUNT OF EMPLOYERS AND EMPLOYEE S CONTRIBUTION TO PF & ESIC WHICH WAS DISALLOWED BY THE A.O. BY INVOK ING SEC.43B. THE TRIBUNAL HAS OBSERVED THAT THE ASSESSEE HAS PAI D THE AMOUNT DUE ON ACCOUNT OF BOTH THE EMPLOYERS AND EMPLOYEES CO NTRIBUTION TO PF & ESIC DURING THE YEAR ITSELF TOTALLING TO ` 23,88,862/- AND IN WHICH SUM OF ` 71,987/- IN RESPECT OF EMPLOYEES CONTRIBUTION TO PF WAS PAID BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME. IT IS FURTHER OBSERVED THAT THE A.O. DISALLOWED THE CLAIM OF THE ASSESSEE HOLDING MA 230/MUM/2011 M/S. NESCO LTD. 2 THAT THE PAYMENTS WERE MADE AFTER THE DUE DATES. T RIBUNAL ALSO CONSIDERED THE DECISION OF HONBLE HIGH COURT OF BO MBAY IN THE CASE OF CIT VS. PAMVI TISSUES LTD. 215 CTR (BOM) 150 AS WELL AS THE DECISION IN THE CASE OF CIT VS. GODAVARI (MANNAR) S AHAKARI SAKHAR KARKHANA LTD. 298 ITR 149 (BOM) AND HELD THAT EMPLO YEES CONTRIBUTIONS TO PF & PENSION FUNDS HAVE NOT PAID B EFORE THE DUE DATE UNDER THE RESPECTIVE ACT ARE NOT ALLOWABLE EXPENDIT URE U/S.43B OF THE ACT. IN RESPECT OF THE EMPLOYEES SHARE OF CONTRIB UTION TO PF & ESIC, THE TRIBUNAL FOLLOWED THE DECISION OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF PALANPA TRANSPORTS VS. CIT 238 ITR 493 AND HELD THAT ASSESSEE HAS PAID THE EMPLOYEES SHARE OF CONTRIBUT ION AFTER GRACE PERIOD ALLOWED UNDER THE RESPECTIVE ACT AND THERE I S NO MERIT IN THE CLAIM OF THE ASSESSEE. IN THE APPLICATION THE ASSE SSEE HAS PLEADED THAT AFTER THE DECISION OF THE TRIBUNAL THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALOM EXTRUSION LTD. 319 ITR 306 HAS HELD THAT AMENDMENT TO SEC.43B BY THE DELETION OF THE SECOND PROVISO WITH THE RETROSPECTIVE EFFECT AND HAS SPECIFICALLY OVERRULED THE DECISIONS OF HONBLE HIGH COURT OF BOMBAY. IT IS PLEADED THAT T HERE IS A MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL AND THE SAME MAY BE RECTIFIED. 3. WE HAVE HEARD THE COUNSELS AND PERUSED THE RECOR DS. THE FACTS ARE NARRATED HEREINABOVE. IN THE CASE OF ALOM EXTR USION LTD. (SUPRA) THE HONBLE SUPREME COURT HAS HELD THAT AMENDMENT T O SEC.43B IS RETROSPECTIVE IN OPERATION. MOREOVER, THE DECISION IN THE CASE OF ALOM EXTRUSION LTD. (SUPRA) HAS BEEN FOLLOWED IN THE SUB SEQUENT DECISION OF THE TRIBUNAL IN THE CASE OF M/S. PINKPEN P. LTD. VS . CIT IN ITA NO.6847/MUM/2008 DATED 28.8.2010. THE OPERATIVE PA RT OF THE TRIBUNALS ORDER ON THIS ISSUE READS AS UNDER:- 10. THE NEXT ISSUE IS DISALLOWANCE OF EMPLOYEES CO NTRIBUTION TO PF AND ESIC OF ` 43,721/-. THE SHORT CONTROVERSY BEFORE US IS IN RESPECT OF THE PAYMENT OF THE EMPLOYEES CONTRIBU TION TO P.F./E.S.I.C BEYOND THE GRACE PERIOD WHICH WAS RELA TING TO THE MA 230/MUM/2011 M/S. NESCO LTD. 3 MONTH OF FEBRUARY. THE LD. COUNSEL RELIED ON THE D ECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S. ALOM EXTRUSION LTD., 319 ITR 306. THE A.O. MADE THE DISALLOWANCE U/S. 36(1)(VA) AS HE WAS OF THE OPINION THAT THE EMPLOYE ES CONTRIBUTION TO PF/ESIC EVEN IF MADE BEFORE FILING OF THE RETURN OF INCOME IS NOT COVERED U/S. 43B OF THE I.T. ACT. IN THE CASE OF ALOM EXTRUSION LTD.(SUPRA), THE ISSUE BEFORE THEIR LORDS HIP WAS WHETHER THE OMISSION OF SECOND PROVISO TO SECTION 43B OF THE I.T. ACT 1961 BY THE FINANCE ACT 2003 OPERATED W.E.F. 1 .2.2004 OR WHETHER IT OPERATED RETROSPECTIVELY W.E.F. 1.4.1988 . IN THE SAID CASE ALSO, THE ISSUE WAS CONCERNING THE CONTRIBUTIO N PAYABLE BY THE EMPLOYER TO THE P.F/SUPERANNUATION FUND OR ANY OTHER FUND OF WELFARE OF THE EMPLOYEES. IN OUR OPINION, NOW TH E ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F HONBLE SUPREME COURT IN THE CASE OF ALOM EXTRUSION LTD. (S UPRA). WE, THEREFORE, ALLOW THE GROUND TAKEN BY THE ASSESSEE A ND DELETE THE ADDITION. 4. WE, ACCORDINGLY RECTIFY THE ORDER OF THE TRIBUNA L IN ITA NO.5515/MUM/2005 DATED 10.12.2008 AND HOLD THAT IF THE ASSESSEE HAS PAID THE EMPLOYERS AS WELL AS EMPLOYEES CONTR IBUTION ON OR BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME T HEN THE SAME SHOULD BE ALLOWED. THE A.O. IS DIRECTED TO VERIFY FROM TH E DETAILS AVAILABLE ON RECORD AND ACCORDINGLY ALLOW THE CLAIM. ACCORDINGL Y, THE ASSESSEES APPEAL IS ALLOWED. 5. IN THE RESULT, THE ASSESSEES MISC. APPLICATION IS ALLOWED PRO- TANTO . ORDER PRONOUNCED IN THE OPEN COURT ON 27TH APRIL, 2 012. SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 27TH APRIL, 2012 MA 230/MUM/2011 M/S. NESCO LTD. 4 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)13, MUMBAI, 4) THE CIT-7, MUMBAI. 5) THE D.R. D BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN