AGEW STEEL MANUFACTAUTURERS PVT. LTD.,AHMEDABAD vs. THE ITO, WARD-1(1)(4), AHMEDABAD

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ITA 1898/AHD/2017Status: DisposedITAT Ahmedabad10 October 2019AY 2014-154 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the disallowance made by the Assessing Officer was justified. The assessee's argument that the amounts were deposited before the due date for filing the return was not accepted, following the Gujarat High Court's decision in CIT vs. GSRTC.

What were the facts?

The assessee company engaged in steel manufacturing delayed the payment of employees' contribution towards Provident Fund and ESIC beyond the stipulated due dates. The Assessing Officer made a disallowance of Rs. 18,69,737/- on this account.

What were the issues?

Whether delayed deposit of employees' contribution to Provident Fund and ESIC beyond the statutory due date, even if deposited before the due date of filing the return, is disallowable as a deduction.

Which sections of the Income-tax Act were involved?

Section 43B,Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH

Before: SHRI MAHAVIR PRASAD & SHRI WASEEM AHMED

For Appellant: Shri Karan Shah, A.R

PER MAHAVIR PRASAD, JUDICIAL MEMBER

1.

1. This appeal filed by the Assessee is directed against the order of the Ld. CIT(A)-1, Ahmedabad dated 16.06.2017 pertaining to A.Y. 2014-15 and for confirming the disallowance of Rs. 18,69,737/- made by the A.O. on account of delayed payment of Employees Contribution to Provident Fund and ESIC.

2 . A.Y. 2014-15 2. The facts of the case are that the assessee company is engaged in the business of manufacturing of Iron and Steel doors, Window, Door Frames, Pressed Steel products and other Steel Fabrications.

3.

On perusal of column No.20b of form No.3CD of the audit report It Is found that the assessee has not deposited the employees contribution towards provided fund and ESI within stipulated time. The details of which are as under- Sr. No. Nature of Due date for Actual date for Amount fund payment payment

1. Provided fund 20/05/2013 22/05/2013 Rs. 1,31,197/-

2.

-do- 20/06/2013 03/07/2013 Rs. 1, 39,386/-

3. -do- 20/07/2013 23/07/2013 Rs. 1, 32,645/-

4. -do- 20/08/2013 12/09/2013 Rs. 1, 43,234/-

5. -do- 20/09/2013 05/10/2013 Rs. 1,3 7,396/-

6. -do- 20/10/2013 06/11/2013 Rs. 1,28,762/-

7. -do- 20/11/2013 28/12/2013 Rs. 1, 38,2047-

8. -do- 20/12/2013 01/01/2014 Rs. 1,22,2607-

9. -do- 20/01/2014 07/02/2014 Rs. 1,36,188/-

10. -do- 20/02/2014 30/03/2014 Rs. 1,51,489/-

11.

-do- 20/03/2014 16/04/2014 Rs. 1,4 1,310/-

12.

-do- 20/04/2014 01/05/2014 Rs. 1,56,487/- Total Rs. 16,58,558/-

ESI Sr. Nature of Due date for Actual date for Amount No. fund payment payment

1.

Employee's 21/0572013 25/05/2013 Rs.18,063/- Contribution 3 . A.Y. 2014-15 2. -do- 21/06/2013 03/07/2013 Rs. 1 9,405/-

3. -do- 21/08/2013 07/09/2013 Rs. 1 9,885/-

4.

-do- 21/09/2013 04/1072013 Rs. 1 9,325/-

5.

-do- 21/10/2013 31/10/2013 Rs. 1 8,329/-

6. -do- 21/11/2013 28/11/2013 Rs. 1 9,380/-

7. -do- 21/12/2013 01/01/2013 Rs. 16,776/-

8. -do- 21/01/2014 30/0172014 Rs. 18,669/-

9.

-do- 21/02/2014 03/03/2014 Rs.20,933/-

10.

-do- 21/03/2014 28/03/2014 Rs. 18,909/-

11. -do- 21/04/2014 01/05/2014 Rs.2 1,505/- Total Rs.2,11,179/- In view of the above, the assessee vide notice u/s 142(1) dated 21.07.2016 was requested to explain as to why the disallowance of Rs.18,69,737/- for the late payment of employees contribution of provided fund and ESI should not be made.

4. Thereafter assessee filed reply which was not tenable in the eyes of ld. A.O. and he made addition of Rs. 18,69,737/-.

5. Thereafter assessee preferred first statutory appeal before the ld. CIT(A) who confirmed the action of the A.O.

6.

Now assessee has come before us by way of second appeal.

7.

At the time of hearing ld. A.R. Shri Karan Shah fairly conceded that matter is against the assessee in view of the Hon’ble Gujarat High Court order in the 4 . A.Y. 2014-15 case of CIT vs. GSRTC and requested that he does not want to context the appeal. Since ld. A.R. has conceded himself that matter is against him and judgment of Hon’ble Gujarat High Court in the matter of CIT vs. GSRTC 366 ITR 170 wherein it is held as under:

"Section 43B, read with section 36(1)(va) of the Income-tax Act, 1961 - Business disallowance — Certain deductions to be allowed on actual payment (Employees contribution) - Whether where an employer has not credited sum received by it as employees' contribution to employees' account in relevant fund on or before due date as prescribed in Explanation to section 36(1)(va), assesses shall not be entitled to deduction of such amount though he deposits same before due date prescribed under section 43B i.e., prior to filing of return under section 139(1) - Held, yes - Assesses State transport corporation collected a sum being provident fund contribution from its employees - However, it had deposited lesser sum in provident fund account — Assessing Officer disallowed same under section 43B - However, Commissioner (Appeals) deleted disallowance on ground that employees contribution was deposited before filing return - Whether since assessee had not deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1 )(va), disallowance made by Assessing Officer was just and proper - Held, yes [Para 8] [In favour of revenue]

8.

In the result, the appeal of the Assessee is dismissed.

Order pronounced in Open Court on 10- 10- 2019

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