MUSKAN HOSPITAL &RSEARVH CENTRE,BOKARO vs. DCIT CIRCLE-3, BOKARO

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ITA 241/RAN/2017Status: DisposedITAT Ranchi26 November 20184 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that no disallowance can be made for employee's contribution to PF and ESIC if deposited within the due date for filing the return of income, following the Supreme Court decision in Rajasthan State Beverages Corporation Ltd.

What were the facts?

The assessee deposited employee's contribution to EPF and ESIC after the due date prescribed by the respective Acts but before the due date for filing the return of income. The Assessing Officer and CIT(A) disallowed these amounts as deductions.

What were the issues?

Whether disallowance of employee's contribution to PF and ESIC is permissible when deposited before the due date of filing the return of income, despite being after the due date under the respective Acts.

Which sections of the Income-tax Act were involved?

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

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, RANCHI ‘ SMC’ BENCH, RANCHI

Before: SHRI N.S SAINI

For Appellant: Shri Nitin PaSARI, Adv
For Respondent: Shri A.K.Mohanty, JCIT
Hearing: 26/11Pronounced: 26/11

This is an appeal filed by the assessee against the order of

the CIT(A), Hazaribag, dated 20.6.2017 for the assessment year

2014-15.

2.

In Ground No.A & B of the appeal, the grievance of the

assessee is that the CIT(A) was not was not justified in confirming

the addition made towards EPF and ESIC on the ground that the

same was not deposited within the due date prescribed under the

respective Act..

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ITA No. 241/R an/ 2017 Asse ssment Year : 20 14- 15 :

3.

Brief facts of the case are that the Assessing Officer observed

that the assessee has not deposited employees’ contribution to

Provident Fund of Rs.6,50,138/- and employees’ contribution to ESIC

of Rs.1,05,924/- within the due date prescribed under the respective

Act, therefore, he added the same to the total income of the assessee

u/s.36(1)(va) of the Act.

4.

On appeal the CIT(A) confirmed the action of Assessing Officer

as there was no compliance from the side of the assesse.

5.

Before me, the A.R of the assessee submitted that in view of the

decision of Hon’ble Supreme Court in the case of Rajasthan State

Beverages Corporation Ltd., [2017] 84 taxmann.com 185 (SC), no

disallowance of deduction for employees’ contribution to PF & ESIC is

to be made where the amount is deposited by the assessee within the

time prescribed for filing return of income u/s.139(1) of the Act.

6.

The DR could not controvert the above submission of the AR of the assessee.

7.

After hearing rival submissions and perusing the material on

record, I find that it is not in dispute that the assesse has deposited

employees’ contribution to Provident Fund of Rs.6,50,138/- and

employees’ contribution to ESIC of Rs.1,05,924/- within the due date

prescribed u/s.139(1) of the Act as is evident from page 2 and 3 of the

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ITA No. 241/R an/ 2017 Asse ssment Year : 20 14- 15 :

assessment order. The addition was made on the ground that the

employees’ contribution to PF and ESIC was not deposited within the

time prescribed under the P.F.Act. I find that no disallowance can be

made for deduction of the same u/s.36(1)(va) of the Act in view of the

decision of Hon’ble Supreme Court in the case of Rajasthan State

Beverages Corporation Ltd., [2017] 84 taxmann.com 185 (SC), where

it was held as under :-

“ Section 43B, read with section 36(1)(va), of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment (PF and ESI contribution) - High Court by impugned order held that amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va) - Whether SLP against said impugned order was to be dismissed - Held, yes [Para 2] [In favour of assessee]”

8.

Respectfully following the decision of Hon’ble Supreme Court in

the case of Rajasthan State Beverages Corporation Ltd. (supra), I set

aside the orders of lower authorities and delete the addition of

Rs.6,50,138/- towards EPF payment and Rs.1,05,924/- towards ESI

payment.

9.

In Ground No.C of the appeal, the grievance of the assesse is

that the interest paid on the delayed deposit also being follow –up

expenses are also to be considered and allowable as deduction.

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10.

No arguments were advanced by ld A.R. of the assesse on this

ground and, therefore, same is dismissed for want of prosecution.

11.

In the result, appeal of the assessee is partly allowed

Order pronounced on 26/11/2018.

Sd/- (N.S Saini) ACCOUNTANT MEMBER Ranchi; Dated 26/11/2018 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : M/s. Muskan Hospital & Research Centre, Ram Nagar Colony, CHAS, Bokaro Steel City, Jharkhand

2.

The Respondent. DCIT, Circle-3, Bokaro 3. The CIT(A)- Hazaribag 4. Pr.CIT- Hazaribag 5. DR, ITAT, Ranchi 6. Guard file. By order //True Copy//

Sr. Pvt.Secretary, ITAT, Ranchi on tour

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