RAJMAHAL COAL MINING LIMITED,KOLKATA vs. A.C.I.T., CIRCLE - 7(2), KOLKAA, KOLKATA

The solitary grievance of the assessee is that the ld. CIT(Appeals) has erred in confirming the disallowance of Rs.40,81,018/- with the aid of section 36(1)(va) of the Income Tax Act.

Brief facts of the case are that the assessee has filed its return of income on 31.10.2017 declaring total income at Rs.38,70,71,440/-. The case was selected for scrutiny assessment. A perusal of the record had revealed to the ld. Assessing Officer that the assessee did not make payment of employees’ contribution to Provident Fund Account within the due date prescribed under section 36(1)(va) of the Act. Accordingly he disallowed it. Before the ld. 1st Appellate Authority, it was contended by the assessee that there is no delay in making the payments. The ld. Counsel for the assessee took us through the written submissions filed before the Tribunal. The synopsis of such submissions is available on pages 1 to 4 of the paper book, which reads as under:- Assessment Year: 2017-2018 Rajmahal Coal Mining Limited Assessment Year: 2017-2018 Rajmahal Coal Mining Limited Assessment Year: 2017-2018 Rajmahal Coal Mining Limited Assessment Year: 2017-2018 Rajmahal Coal Mining Limited

Ld. Counsel for the assessee, at the very outset, submitted that in response to the notice, the assessee has pleaded that being a Company engaged in execration of coal, the Coal Mines Provident Fund Scheme is applicable upon the assessee and as per the Scheme, the employees’ contribution to Provident Fund is to be deposited upto the last day of the month and assessee has deposited the same. He took us through G.S.R. 1726 dated 11.09.1968, which has been amended subsequently. Copy of such regulation is placed as Annexure-C.

On the other hand, ld. D.R. was unable to controvert the contention of the ld. Counsel for the assessee.

On due consideration of the record, we are of the view that the ld. 1st Appellate Authority failed to appreciate the controversy in right perspective. As per Coal Mines Provident Fund Scheme, Assessment Year: 2017-2018 Rajmahal Coal Mining Limited the payment was to be made upto the last day of every month. Earlier it was on 15th day of the month. However, later on, it was changed to the last day of the month, the expression “on or before 3 (the last day) of every month”. The word ‘3’ is to represent the footnote at the end of the provision of the Scheme. The ld. CIT(Appeals) construed it as 3rd day of the month. All these aspects have been explained by the assessee in its written submission elaborately. After examining the facts in the light of the above Scheme, we find that there is no delay in depositing the employees’ contribution to the Provident Fund Account as per the Scheme of Coal Mines and, therefore, no disallowance is to be made. The appeal of the assessee is allowed and disallowance of Rs.40,81,018/- is deleted.

In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 16thMarch, 2023.