DCIT, CIRCLE-2(2), HYDERABAD, HYDERABAD vs. TIBREWALA ELECTROMECH PVT. LTD., HYDERABAD, HYDERABAD

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ITA 357/HYD/2017Status: DisposedITAT Hyderabad09 January 2018AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, stating that the Assessing Officer wrongly invoked Section 36(1)(va) read with Section 2(24)(x). The Tribunal followed the Supreme Court's decision in CIT vs. Alom Extrusions Ltd.

What were the facts?

The Revenue appealed against the CIT(A)'s decision allowing deduction for employee's contribution to EPF & ESI. The assessee had paid these contributions, but the Revenue argued it was not in consonance with Section 36(1)(va) and thus disallowed under Section 43B.

What were the issues?

Whether the employer's payment of employee's contribution to EPF/ESI after the due date but before the due date for filing the return of income is eligible for deduction under Section 43B.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” BENCH: HYDERABAD

Before: SHRI D. MANMOHAN & SHRI S. RIFAUR RAHMAN

Hearing: 09.01.2018Pronounced: 09.01.2018

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B” BENCH: HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA. No.357/Hyd/2017 Assessment Year: 2012-2013 The Deputy Commissioner of vs. M/s. Tibrewala Electromech Pvt Income Tax, Ltd., Circle-2(2), Hyderabad. Plot No. B-66, APIE, Balanagar, Hyderabad. PAN: AAACT 7512 K (Appellant) (Respondent) For Assessee: Smt. Dr. Divya K.J - DR For Revenue : Shri K.A. Sai Prasad Date of Hearing : 09.01.2018 Date of Pronouncement : 09.01.2018 ORDER PER D. MANMOHAN, VP. 1. The only ground urged by the Revenue reads as under:- “In the facts and circumstances of the case, whether the CIT (A) is correct in law in holding that the payment of the employee’s contribution towards EPF & ESI by the employer-assessee, which is not in consonance with the Explanation to Section 36(1)(va) is entitled for deduction u/s 43B of the IT Act?” 2. Learned Departmental Representative vehemently contended that the Statute prescribes a time limit for payment of employee’s contribution to EPF and ESI, u/s 36(1)(va) of the Act, and the provisions having been introduced as a welfare legislation, an assessee who has not fulfilled the condition cannot escape the wrath of the provisions of section 43B of the Act.

3.

On the other hand, Ld Counsel appearing for the assessee submitted that an identical issue has come up before the Hon’ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd (319 ITR 36), which in turn was followed by the ITAT, Hyderabad “A” Bench in the case of VBC Industries Ltd vs. DCIT (ITA No.143/Hyd/2013) whereby if any payment is made towards employee’s contribution to EPF / ESI before due date for filing the return of income u/s 139(1) of the Act, disallowance cannot be made by invoking the provisions of section 43B of the Act. Ld Counsel for the assessee placed reliance upon the following decisions:-

(1) I.T.A. No.293/Hyd/2017 in the case of ITO vs. M/s. Toshali Cements Pvt. Ltd. and (2) I.T.A No. 840/Hyd/2016 in the case of ITO vs. M/s. Golden Star Facilities and Services P. Ltd. 4. We have considered the rival submissions and perused the record. Consistent with the view taken by the ITAT, Hyderabad Bench which in turn was based upon the decisions of various High Courts as well as Hon’ble Supreme Court, we hold that Ld. CIT(A) was justified in his conclusion that the A.O. has wrongly invoked the provisions of section 36(1)(va) r.w.s 2(24)(x) of the Act. We therefore uphold the order of the Ld. CIT(A) and dismiss the appeal filed by the Revenue. Pronounced accordingly in the open Court on 09th January, 2018.

Sd/- Sd/- (S. RIFAUR RAHMAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated: 09th January, 2018.

OKK, Sr.PS

Copy to

1.

M/s. Tibrewala Electromech Pvt Ltd., Plot No.B-66, APIE, Balanagar, Hyderabad. 2. DCIT, Circle-2(2), Room No. 513, 5th Floor, Signature Towers, Kondapur, Hyderabad. 3. CIT (A)-2, Hyderabad. 4. Pr. CIT-2, Hyderabad. 5. DR, ITAT, Hyderabad. 6. Guard File

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