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Income Tax Appellate Tribunal, AHMEDABAD ‘A’ BENCH, AHMEDABAD
I TA N o. 2 3 4 9/ Ah d /2 0 1 6 S ou t he r n I n di a B i di W or ks P v t Lt d Vs . I TO Ass e ss me n t Y ea r : 2 0 11 - 1 2 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD ‘A’ BENCH, AHMEDABAD [Coram: Pramod Kumar AM and Mahavir Prasad JM] ITA No. 2349/Ahd/2016 Assessment Year: 2011-12 M/s. Southern India Bidi Works Pvt Ltd ............…………......Appellant Gordhanbhai Jethabhai Compound, Near Post Office, At & Post Bajwa, Baroda - 391310 [PAN : AACCS 9802 M] Vs. Income Tax Officer ...........................Respondent Circle-2(1)(1), Baroda Appearances by:
Mohit Balani, for the Appellant Rajdeep Singh, for the Respondent Date of concluding the hearing : 09.07.2018 Date of pronouncing the order : 08.10.2018 O R D E R Per Pramod Kumar, AM: 1. By way of this appeal, the assessee appellant has challenged correctness of order dated 12th July 2016 passed by the CIT(A)-2, Vadodara in the matter of order dated 29.06.2015 passed by the Assessing Officer under section 154 of the Income-tax Act, 1961 for the assessment year 2011-12.
Grievances raised by the appellant are as follows:-
“1.00 Disallowance of deduction u/s 36(1)(va) of the Income-tax Act, 1961 in respect of employee contribution to provident fund to the tune of Rs. 8,57,744/- being sum total of Rs.3,68,916/- and Rs.4,88,828/-.
1.01 On the facts and circumstances of your appellant's case and in law, the Id. CIT (Appeal) has erred in confirming the action of Id. AO of not allowing a sum of Rs.8,57,744/- as deduction towards payment for employee contribution to PF. The payment towards employee contribution was although made after the due date under the relevant PF Act but well within the due date of filing the return of income under section 139 of the Act.
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Further, the Id. CIT (Appeal) failed to apprehend the reason for non-deposition of employee contribution to PF of Rs.3,68,916/- related to the month of December, 2010 was due to the fact that the EPF code was allotted to the appellant only on 20.01.2011 i.e. much after the due date for the month concerned.”
When this appeal was called out for hearing, learned counsel for the assessee effectively only pressed the grievance against the impugned disallowance to the extent of Rs.4,88,828/- and claimed it to be an issue covered, in favour of the assessee. The written note submitted by the learned counsel for the assessee, inter alia, states as follows:-
“…… the appellant submits that both the Authorities failed to appreciate that five days of grace period has been allowed to the employer by clause (iii) of CPFC’s Circular No. E.128(1) 60III dated 19/03/1964 as modified by circular No. E11/128 (section 14-B Amendment)/73 dated 24/10/1973. As apparent, from the chart reproduced by the AO at Page no.1 of the order u/s 154 of the Act, the appellant has deposited employee employee’s contribution for the month of March on 16.04.2011, i.e. well within the grace period. Hence, disallowance u/s 36(1)(va) of the Act amounting to Rs.4,88,828/- may kindly be deleted on this short ground itself. Further reliance is placed on the judgement of CIT vs. Amoli Organics (P.) Ltd 221 Taxman 116 (Guj.) (Mag), the copy of which is attached along with this chart herewith marked as Annexure-A.
So far as employees contribution towards PF for the month of December, 2010 amounting to Rs.4,88,828, both the authorities have failed to appreciate that the due date for payment of PF and ESIC should be reckoned from the date of payment of salary instead of the month, it gets due. Reliance is placed on the decision of Kanoi Paper & Industries Ltd vs. ACIT 75 TTJ 448 (Calcutta), the copy of which is attached alongwith this chart herewith marked as Annexure-B. Further reliance is placed on the decision of M/s. Suzlon Energy Ltd vs. DCIT in ITA No.764 & 765/Ahd/2018, the copy of which is attached along with the charge herewith marked as Annexure-C….”
The copies of judgments referred to in the note above were also filed before us. Learned Departmental Representative, on the other hand, placed reliance on the stand
I TA N o. 2 3 4 9/ Ah d /2 0 1 6 S ou t he r n I n di a B i di W or ks P v t Lt d Vs . I TO Ass e ss me n t Y ea r : 2 0 11 - 1 2 Page 3 of 4 of the authorities below and submitted that even if these judicial precedents are to be followed, the matter should atleast be remitted to be file of the Assessing Officer for necessary verification.
We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. Respectfully following the judicial precedents from the Hon’ble jurisdictional High Court in the case of Amoli Organics (P.) Ltd (supra) and by a co-ordinate bench in the case of Suzlon Energy Ltd (supra), we hold that, as long as the payment is made within the permissible grace period, the disallowance is indeed required to be deleted and that the due date for payment is to be computed in accordance with the correct legal position. However, as learned Departmental Representative rightly contends, the matter is required to be remitted to the file of the Assessing Officer for necessary verification in respect of the factual aspects embedded in the claim of the learned Counsel. We, therefore, remit the matter to the file of the Assessing Officer for taking a fresh decision in the light of above observations.
In the result, appeal is allowed for statistical purposes. Pronounced in the open court today on the 8th October, 2018
Sd/- Sd/-
Mahavir Prasad Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 8th October, 2018 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad 1. Date of dictation: ..........08.10.2018 2. Date on which the typed draft is placed before the Dictating Member: .. 08.10.2018 3. Date on which the approved draft comes to the Sr. P.S./P.S.: …08.10.2018...
I TA N o. 2 3 4 9/ Ah d /2 0 1 6 S ou t he r n I n di a B i di W or ks P v t Lt d Vs . I TO Ass e ss me n t Y ea r : 2 0 11 - 1 2 Page 4 of 4 4. Date on which the fair order is placed before the Dictating Member for Pronouncement: …08.10.2018.. 5. Date on which the file goes to the Bench Clerk : . 08.10.2018……. 6. Date on which the file goes to the Head Clerk : ……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order: …. 8. Date of Despatch of the Order: ………………......