CHANDRAHAS MUNDAPPA RAI,MUMBAI vs. DCIT, CPC, CPC BANGALORE

O R D E R

Per : Kuldip Singh, Judicial Member:

“1. Under the facts and circumstances of the case and in law, Assessing officer has erred in making an addition of

2. Under the facts and circumstances of the case and in law, AO has erred in not appreciating the fact that the said sum of Rs.16,48,759/- is fully paid and discharged his liability before due date of Filing of Return.

Relief Claimed:

The addition made by the AO amounting to Rs.16,48,759/- u/s. 36(l)(va) of the Act being the late payment of Employees Contribution towards PF & ESIC should be deleted in view of various favorable pronouncements made by the Jurisdictional Bombay High Court in case of CIT vs Ghatge Patil Transport Ltd. (2015)(53 Taxmann.com 141) and CIT vs Hindustan Organics Chemicals Ltd. (2014)(48 Taxmann.com 421) and also by the Supreme Court in the case of CIT vs Alom Extrusions Ltd. (2009)(185 Taxman416 (SC).

The appellant craves right to add, amend, alter, modify or substitute any 7 all grounds of appeal at the time of hearing.”

3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has dismissed the same. Feeling aggrieved with the impugned order passed by the Ld. CIT(A) assessee has come up before the Tribunal by way of filing the present appeal.

14. Therefore, the amended provisions of Section 43B as well as 36(1 )(va) are not applicable for the assessment year under consideration. By following the binding decision of Hon'ble Jurisdictional High Court, the employees contribution paid by the assessee before the due date of filing of return of income u/s. 139(1) is an allowable deduction. Accordingly, we decide this issue in favour of the assessee and the disallowance made by the Assessing Officer is deleted.

“7. We have heard the authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record. We find that our indulgence in the present appeal has been sought by the assessee, for adjudicating, as to whether in the backdrop of the post-amended Sec. 43B of the Act, the lower authorities were justified in disallowing the amount of the employees contribution to provident fund that was deposited by the assessee beyond the stipulated period contemplated under the Provident Fund act, but before the ‘due date’ of filing of its return of income under Sec. 139(1) of the Act. We find that it is an admitted fact, that though the assessee had deposited the employees contribution to provident fund beyond the time period allowed under the PF act, however, the said amounts were paid before the ‘due date’ of filing of the return of income by the assessee under Sec. 139(1) of the Act. We are unable to accept the observations of the lower authorities, that the provisions of Sec. 43B would not be applicable as regards the employees contribution to provident fund, and the same would continue to be governed by Sec. 36(1)(va) r.w.s. 2(24)(x) of the Act. We find that the issue under consideration is squarely covered by the judgment of the Hon’ble High Court of Bombay in 5 Mr. Chandrahas Mundappa Rai the case of CIT Central, Pune Vs. Ghatge Patil Transports Ltd. (ITA No. 1002 & 1034 of 2012; dated 14.10.2014) (Bom). The Hon’ble High Court in its aforesaid order had clearly observed that both employees and employers contribution would be covered under the amendment to Sec. 43B of the Act and the Alom Extrusions (supra) judgment. We thus, are of the considered view that the disallowance of Rs. 6,30,867/- upheld by the CIT(A), not being in conformity with the aforesaid judgment of the Hon’ble High Court cannot be sustained and is hereby vacated.”

Order pronounced in the open court on 29.03.2022.