ALMIGHTY RESOURCES PVT. LTD.,ALWAR vs. INCOME TAX OFFICER, BHIWADI

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ITA 679/JPR/2018Status: DisposedITAT Jaipur15 August 2018AY 2014-156 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that if the payments were made before the due date of filing the return of income, they are allowable, even if delayed beyond the statutory due dates under the respective Acts. The CIT(A) erred in upholding the disallowance without considering admitted facts.

What were the facts?

The assessee made delayed payments of employees' contribution to ESI and EPF. However, these payments were made before the due date for filing the return of income. The Assessing Officer disallowed these amounts, and the CIT(A) upheld the disallowance.

What were the issues?

Whether delayed deposit of employees' contribution to ESI and EPF, made before the due date of filing the return of income, is allowable as a deduction.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 2(24)(x),Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 679/JP/2018

For Appellant: Shri Mahendra Balani (CA) jktLo dh vksj ls@
Hearing: 21/08/2018Pronounced: 23/08/2018

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 679/JP/2018 fu/kZkj.k o"kZ@Assessment Year :2014-15 cuke M/s Almighty Resources Pvt. Ltd., Income Tax Officer, Vs. A-75, Bhagat Singh Colony, Bhiwadi, Bhiwadi. Alwar (Raj)-301009. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAKCA 6390 A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Mahendra Balani (CA) jktLo dh vksj ls@ Revenue by : Smt. Roshanta Meena (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 21/08/2018 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 23/08/2018 vkns'k@ ORDER

PER: VIJAY PAL RAO, J.M.

This appeal by the assessee is directed against the order dated

28/02/2018 of ld. CIT(A), Alwar for the A.Y. 2014-15. The assessee has

raised following grounds of appeal: “1. The on the facts and circumstances of case and in Law CIT (A) has erred in maintaining the addition to the extent of Rs. 293231.00 on account of delay deposit of Employees Contribution of ESI and EPF. 2. The delay amount of Rs. 123378/- in case of delay of ESI Payment and Rs. 169854/- in case of delay in EPF Payment towards contribution of Employee’s has been disallowed; the amount so disallowed has been deposited before the due date of return. 3. The delayed payment in respect of employees' contribution to PF & ESI needs to be given liberal approach in view of the ratio laid down

ITA 679/JP/2018_ 2 M/s Almighty Resources P. Ltd. Vs ITO

by the Hon'ble Delhi High Court in the case of CIT v. P.M. Electronics Ltd.. 220 CTR 635 (Delhi) while relying upon the decision of Hon'ble Apex Court in the case of CIT Vs. Vinay Cement Ltd.,213 CTR (SC) 268, concurred with the view taken by the Hon'ble Madras High Court in Nexus Computer (P) Ltd., 219 CTR (Mad) 54 that employer/ employees' contribution towards provident fund payments made after the due date prescribed under the Employees' Provident Fund Act and Rules made there under but before the due date for furnishing the return of income under sub sec. 1 of sec. 139 of the Act, are allowable under s. 36(I)(va) read with sec. 2(24(x) and sec. 43B of the Act. Moreover, Hon'ble Apex Court in the case of CIT vs Atom Extrusions Ltd. 319 ITR 306 (SC) held that the omission of the first proviso to section 43B of the Act by the Finance Act 2003, operated, retrospectively, with effect from, April 1, 1988 and not prospectively from April 1, 2004. 4. The Appellant craves leave to add, amend, modify, or withdraw any of the ground of appeal at the time of hearing.”

2.

We have heard the ld. A.R. of the assessee as well as the ld. DR and

considered the relevant material on record. During the course of

assessment proceedings, the Assessing Officer noted that as per audit

report, the assessee has paid P.F. contribution and ESI to the employees

after due date of prescribed limit under the respective Act. The Assessing

Officer has given the details of the payments made by the assessee in

respect of the PF and ESI contribution at page 2 and 3 of the assessment

order as under:

ESI

S. No. Month Employee’s contribution Due date Actual date of payment 1. April, 2013 5054 21/05/2013 21/06/2013 2. April, 2013 3759 21/05/2013 17/06/2013

ITA 679/JP/2018_ 3 M/s Almighty Resources P. Ltd. Vs ITO

3.

May, 2013 5343 21/06/2013 18/07/2013 4. May, 2013 5310 21/06/2013 18/07/2013 5. May, 2013 6745 21/06/2013 21/08/2013 6. June, 2013 4126 21/07/2013 12/08/2013 7. June, 2013 7002 21/07/2013 17/09/2013 8. July, 2013 4126 21/08/2013 16/09/2013 9. July, 2013 6702 21/08/2013 23/10/2013 10. July, 2013 4142 21/08/2013 17/10/2013 11. August, 2013 6074 21/09/2013 19/11/2013 12. August, 2013 4186 21/09/2013 19/11/2013 13. September, 2013 5991 21/10/2013 20/12/2013 14. September, 2013 4074 21/10/2013 20/12/2013 15. October, 2013 5891 21/11/2013 28/01/2014 16. November, 2013 4125 21/12/2013 21/01/2014 17. November, 2013 5964 21/12/2013 20/02/2014 18. December, 2013 4170 21/01/2014 20/02/2014 19. December, 2013 5924 21/01/2014 18/03/2014 20. December, 2013 3872 21/01/2014 18/03/2014 21. January, 2014 6130 21/02/2014 18/04/2014 22. January, 2014 3651 21/02/2014 18/04/2014 23. February, 2014 7156 21/03/2014 20/05/2014 24. February, 2014 3861 21/03/2014 20/05/2014 Total 123378/-

Provident Fund

S. No. Month Employee’s contribution Due date Actual date of payment 1. April, 2013 42803/- 20/05/2013 21/05/2013 2. July, 2013 46030/- 20/08/2013 21/08/2013 3. November, 2013 40815/- 20/12/2013 26/12/2013 4. December, 2013 40206/- 21/01/2014 29/01/2014 Total 169854/-

Thus, it is clear that the payments were made by the assessee before due

date of filing the return of income U/s 139(1) of the Income Tax Act, 1961

(in short the Act), however, due to the reason that the payments were

made not made within the period stipulated as per EPF scheme and ESI

Act. Therefore, the Assessing Officer disallowed the said amount of Rs.

1,69,854/- and Rs. 1,23,378/- respectively. The Assessing Officer further

ITA 679/JP/2018_ 4 M/s Almighty Resources P. Ltd. Vs ITO

noted that, though, the issue has been decided in favour of the assessee

by the decision of the Hon’ble Jurisdictional High Court in the case of CIT

Vs. JVVNL, 99 DTR 131. However, since the revenue has not accepted that

decision and filed an SLP before the Hon'ble Supreme Court, therefore, the

Assessing Officer made disallowance in this respect.

3.

There is no dispute that if the revenue has not accepted the decision

of Hon’ble Jurisdictional High Court and challenged the same before the

Hon'ble Supreme Court then to keep the issue alive, the Assessing Officer

has to make the disallowance/addition on the issue. However, the

appellate authority is bound by the decision of the Hon’ble Jurisdictional

High Court. In the case in hand, the ld. CIT(A) has not disputed the fact

that all the payments were made before due date of filing of the return of

income U/s 139(1) of the Act and dismissed the appeal of the assessee in

para 3.3 as under:

“3.3 In absence of any evidences in support of the claim, I have relied upon the facts mentioned in the assessment order. No proof of deposits of ESI before the due date of filing of return was filed during appellate proceedings. After considering the same, I see no reason to interfere with the assessment order passed by the A.O. Accordingly the appellant’s grounds of appeal are dismissed.”

It is apparent that the ld. CIT(A) has given the reason for upholding the

disallowances that no proof of deposit was produced by the assessee

ITA 679/JP/2018_ 5 M/s Almighty Resources P. Ltd. Vs ITO whereas the Assessing Officer itself has not disputed the factual position of

making the payments by the assessee as reproduced in the assessment

order and quoted in the foregoing paragraph of this order. Hence, even if

there was no appearance by the assessee before the ld. CIT(A) and the

appeal was decided on merits then the ld. CIT(A) was not expected to

ignore the admitted facts as recorded in the assessment order.

Accordingly, in view of the various decisions of Hon’ble Jurisdictional High

Court in the case of CIT Vs. State Bank of Bikaner & Jaipur, 363 ITR 70

(Raj) as well as CIT Vs. JVVNL (supra), we set aside the orders of the

authorities below qua this issue and allow the claim of the assessee. At the

cost of repetition, we may again point out that the appellate authority

ought not to be influenced by the stakes involved in the case but has to

maintain the judicial discipline.

4.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on 23/08/2018.

Sd/- Sd/- ¼foØe flag ;kno½ ¼fot; iky jko½ (VIKRAM SINGH YADAV) (VIJAY PAL RAO) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 23rd August, 2018 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- M/s Almighty Resources Pvt. Ltd., Bhiwadi, 1. Alwar.

ITA 679/JP/2018_ 6 M/s Almighty Resources P. Ltd. Vs ITO izR;FkhZ@ The Respondent- The ITO, Bhiwadi. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 679/JP/2018) 6.

vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

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