SATISH ENGINEERING WORKS,MUMBAI vs. CENTRAL PROCESSING CENTRE, BANGALORE., JUDICIAL ASSESSING OFFICER:WARD-21(3)(2), MUMBAI, BANGLORE

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ITA 1028/MUM/2021Status: DisposedITAT Mumbai09 March 2022AY 2018-194 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that contributions paid before the due date for filing the return of income under section 139(1) are allowable. However, payments made beyond this due date are not.

What were the facts?

The assessee, a partnership firm, was assessed with an addition/disallowance under section 36(1)(va) for employee contributions to provident fund/ESIC. The assessee argued that these contributions were paid before filing the return of income.

What were the issues?

Whether employee contributions to provident fund/ESIC paid after the due date for filing the return of income but before the actual filing date are allowable as a deduction.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI SANDEEP SINGH KARHAIL & SHRI GAGAN GOYAL

For Appellant: Shri Bhupendra Shah
For Respondent: Shri Chandra Vijay
Hearing: 15/02/2022Pronounced: 09/02/2022

Heard together (2 matters)

ITA 1028/Mum/2021
I.T.A No.1463/Mum/2021

Read from the judgment's own cause title. This page is filed under one of them.

Date of hearing 15/02/2022 Date of pronouncement 09/02/2022 O R D E R Per: Gagan Goyal (AM): This appeal has been filed by the assessee against the order dated 08/08/2019 passed by the Commissioner of Income-tax (Appeals) for the assessment year 2018-119.

2.

The sole grievance of the assessee in this appeal pertains to disallowance under sec6tion 36(1)(va) of the Act, 1961.

2 ITA 1028/Mum/2021 3. The brief facts of the case are that the assessee, a partnership firm, is engaged in the business of manufacturing and sale of all types of dies, compression / injection moldings, sheet metal parts, electrical and other accessories and household products. It filed its return of income on 30/10/2018 declaring total income of Rs.9,577608/- which was assessed by the Deputy Commissioner of Income-tax, CPC at Rs.15,85,905/- by making addition / disallowance under section 36(1)(va) of Rs.6,28,297/- being any sum receipt from employees as contribution to provident fund / ESIC. The assessee agitated the addition before National Faceless Appeal Centre (NFAC), Delhi but of no avail.

4.

Still aggrieved, the assessee filed the present appeal before the Tribunal.

5.

We have heard the rival submissions and perused the material placed on record. The issue for consideration before us is, whether employees' contribution to provident fund / ESIC is allowable under section 43B when paid beyond the due date for filing return of income under section 139(1). The first appellate authority negated the claim of the assessee by relying upon the judgement of Hon'ble Gujarat High Court in the case of State Road Transport Corporation 366 ITR 170(Guj). The Ld.AR before us, invited our attention to the following judgments of the Hon'ble Supreme Court for the proposition that when contribution had been paid prior to filing of return under section 139(1), assessee would be entitled for deduction:- 1. CIT vs M/s Alom Extrusions Limited - 319 ITR 306(SC) 2. CIT VS Vinay Cement Limited - 313 ITR 1 (ST)(SC) 3. Mahadev Gold Storage vs. Jurisdictional Assessing Officer & Anr 127taxmann.com 722 (Agra) 4. M/s Crescent Roadways Pvt Ltd ITA No.l952/Hyd.2018

3 ITA 1028/Mum/2021 5. Aj'ay Piplani vs ADIT

6. Shri Gopalakrishna Aswini Kumar vs ADIT ITA No.359/Bang/2021 The Ld.AR of the assessee before us, submitted in the paper book the proof of payments made to ESIC/PF, the details of which are as under:- Date Amount 17/07/2019 Rs. 14,026/- 07/08/2017 Rs.14, 969/- 30/08/2017 Rs. 15/430/- 12/09/2017 Rs.13,869/- 24/10/2017 Rs.14, 141/- 16/11/2017 Rs.14, 182/- 15/12/2017 Rs.14, 490/- 13/01/2018 Rs. 15, 055/- 28/02/2018 Rs.14, 684/- 19/03/2018 Rs.12, 923/- The Ld.AR submitted that the first appellate authority was not justified in deciding the assessee. We find force in the contentions of the assessee. We find that Hon'ble Supreme Court in the case of CIT VS Vinay Cement Limited (supra) held that contribution made to provident fund before filing of the not be disallowed under section 43B. However, in this case, from the details of payments made available on record we find that some of the payments are made beyond the due date for filing the return of income. Therefore, respectfully following the judicial precedents, we direct the jurisdictional AO to allow those payments which were made before the due date for filing of return u/s. 43B r.w.s. 36(l)(va) of the I.T. Act, 1961 after necessary verification as per law.

6.

In the result, appeal of the assessee is allowed for statistical purposes.

4 ITA 1028/Mum/2021 Order pronounced in the open court on 9th March 2022.

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