ADHAAN SOLUTION PVT. LTD.,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1(1)(1), AHMEDABAD

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ITA 2904/AHD/2016Status: DisposedITAT Ahmedabad10 May 2018AY 2013-144 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 upheld the disallowance, agreeing with the CIT(A) that delayed deposit of employee contributions to PF/ESIC disentitles the assessee to a deduction. This was based on the jurisdictional High Court's ruling in the State Road Transport Corporation case.

What were the facts?

The assessee company failed to deposit employee contributions towards PF/ESIC into the government account before the stipulated due dates. The Assessing Officer disallowed the amount of Rs. 8,90,876/- on this ground.

What were the issues?

Whether delayed deposit of employee contributions to PF/ESIC beyond the due date prescribed in the respective acts leads to disallowance of the deduction.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 2(24)(x)

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 “SMC” BENCH

Before: Shri Rajpal Yadav & Shri Amarjit Singh

For Appellant: Shri Taj Shah, A.R
For Respondent: Shri Vilas Shinde, Sr. D.R, Shri Taj Shah, A.R

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member ITA No. 2904/Ahd/2016 Assessment Year 2013-14

Adhaan Solution Pvt. Ltd. The ITO, A-807, Dev Aurum, Anand Ward-1(1)(1) Nagar Cross Road, Opp: Vs Ahmedabad Madhur Hall, (Respondent) Prahladnagar Road, Ahmedabad PAN: AAICA5878R (Appellant)

Revenue by: Shri Vilas Shinde, Sr. D.R. Assessee by: Shri Taj Shah, A.R. Date of hearing : 22-02-2018 Date of pronouncement : 10-05-2018 आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

This assessee’s appeal for A.Y. 2013-14, arises from order of the CIT(A)-1, Ahmedabad dated 21-09-2016, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.

2.

The assessee has raised following grounds of appeal:- “1) That on facts and in law, the learned CIT (A) has grievously erred in confirming the addition of Rs.8,90,876/- made u/s 36(1)(va) rws 2(24) (x) of the Act, made towards employees' contribution to PF/ESIC.

I.T.A No. 2904/Ahd/2016 A.Y. 2013-14 Page No 2 Adhaan Solution Pvt. Ltd vs. ITO

2) That on facts, evidence on record, and in law, the learned CIT(A) ought to have deleted the entire disallowance as prayed for.”

The assessee has filed return of income declaring nil income on 26th 3. August, 2013. During the course of scrutiny, the assessing officer noticed that assessee has not deposited contribution of provident fund/ESIC received from the employees in the government account before the due date as specified in these acts. Therefore assessing officer has disallowed an amount of Rs. 8,90,876/- as per provisions of section 2(24) (x) and section 36(i)(va) of the act. The details of such non-payments/delayed payments are as under:- Sl. No. Due date Date of payment Amount TOTAL PF ESIC 1. 15.1.2013 28.1.2013 5,06,222 - 5,06,222 2. 21.7.12 23.7.12 - 31,984 31,984 3. 21.7.12 25.7.12 - 35,916 31,916 4. 21.10.12 30.10.12 - 55,189 55,189 5. 21.10.12 18.5.13 - 873 873 6. 21.11.12 27.11.12 - 16,746 16,746 7. 21.11.12 5.12.12 - 77,049 77,049 8. 21.1.13 5.2.13 - 70,359 70,359 9. 21.3.13 8.4.13 - 34,685 34,685 10. 21.4.13. 30.4.13 - 58,137 58,137 11. 5.7.12 3.8.12 - 1,182 1,182 12. 15.1.13 17.1.13 - 2,328 2,328 13. 15.1.13 5.4.13 - 4,206 4,206 Total 8,90,876

I.T.A No. 2904/Ahd/2016 A.Y. 2013-14 Page No 3 Adhaan Solution Pvt. Ltd vs. ITO

4.

Aggrieved assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee by placing reliance in the case of State Road Transport Corporation (366 ITR 170).

5.

We have heard rival contention and perused the material on record carefully. It is undisputed fact that assessee has committed default in depositing the amount received from employees towards contribution to provident fund/ESIC in the govt. account before the due date prescribed in the PF act. The Hon’ble jurisdictional Gujarat High court in the case of State Road Transport Corporation (366 ITR 170) held that where an employer has not credited the 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(i)(va) then the assessee shall not be entitled to deduction of such amount. In view of the above facts and the judicial findings we are inclined with the decision of ld. CIT(A). Accordingly, the appeal of the assessee is dismissed.

6.

In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 10-05-2018

Sd/- Sd/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 10/05/2018 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file.

I.T.A No. 2904/Ahd/2016 A.Y. 2013-14 Page No 4 Adhaan Solution Pvt. Ltd vs. ITO

By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद

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