DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(2), HYDERABAD vs. COUNTRY CONDO'S LIMITED, HYDERABAD

Facts in brief are that the A.O while completing the assessment disallowed PF Contribution of Rs. 5,11,924/- and ESI contribution of Rs. 98,335/- u/s 43B of the IT Act as these were remitted beyond the due date specified in the respective Acts. Assessee preferred an appeal before the Ld. CIT(A) and the Ld. CIT(A) analysing the payments of these contributions and also the relevant case laws on the issue held that as these contributions were made before due date of filing of the return u/s 139(1) of the IT Act, no disallowance is required to be made. The CIT(A) followed the decision of the Hon’ble ITAT, Hyderabad Bench in the case of M/s Tetra Soft (India) Pvt. Ltd.,

At the outset Ld. Counsel for the assessee submitted that the tax effect in this appeal is less than 10 lakhs and therefore, in view of the CBDT circular No. 21/2015 dated 10.12.2015 the appeal is liable to be dismissed. Ld. Counsel for the assessee further, submitted that the monetary limit for filing of the appeal by the Revenue before the Tribunal has been increased to 20 lakhs vide CBDT circular No. 03/2018 dated 11.07.2018. Ld. Counsel for the assessee further submitted that even on merits as the contributions were paid before due date of filing of the return the same should be allowed as deduction, in view of various case laws relied upon before the CIT(A).

On the other hand Ld. DR placed reliance on the decisions in the case of CIT Vs Gujarat State Road Transport Corporation, [2014] 366 ITR 170 (Guj) and CIT Vs. Merchem Ltd., [2015] 378 ITR 443 (Kerala) in support of her contentions that the contributions since paid beyond the due date as prescribed in the respective Acts they are not allowable as deduction u/s 43B of the IT Act.

We have heard rival contentions and perused the orders of the authorities below. In this case the disallowance made by the A.O towards PF and ESI contributions are Rs. 5,11,924/- and Rs. 98,335/- respectively, the tax effect on these disallowances is admittedly less than 10 lakhs. Therefore the appeal by the Revenue is liable to dismissed on this ground itself. Even on merits on a careful perusal of the Ld. CIT(A) we find that the CIT(A) considering the following decisions and also

We also observed from the Ld. CIT(A) order that similar view has been taken by the Coordinate Bench of this Tribunal in the case of M/s Tetra Soft (India) Pvt. Ltd., (supra), wherein it has been held that the contributions made within the due date of filing of return u/s 139(1) of the IT Act cannot be disallowed u/s 43B of the IT Act. In view of the above discussion the grounds of appeal of the Revenue are dismissed. 7. In the result, the appeal filed by the Revenue is dismissed.