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Income Tax Appellate Tribunal, “A”
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
ORDER PER BENCH: This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals), (NFAC), dated 23.07.2021 emanating out of proceedings under section 143(1) of the Income-tax Act, 1961 (hereinafter also called as „the Act‟) for the Assessment Year 2019-20. The assessee has raised the following grounds of appeal:
1. The learned CIT(A) NFAC erred in law and on facts in confirming the addition of Rs 5,35,998/- on account of delay in depositing Employee's Contribution to PF /ESI Act made by the Asst. Director of Income Tax, CPC Bangalore.
2. The IT Authorities ought to have appreciated that amendment to Section 43B r.w.s 36(l)(va) r.w.s 143(l)(a)(iv) by Finance
A.Y. 2019-20 Durvankur Dining Hall vs. ACIT/DCIT
Act 2021 is prospective i.e. effective from April 01, 2021 and thus not applicable in the instant case. 3. The IT Authorities ought to have appreciated that the Employee Contribution to PF/ESI is allowable as deduction U/43B of the ITA 1961 although disallowable u/s 36(1) (va) of the ITA 1961. 4. Appellant craves leave to add, alter, clarify, explain, modify, delete any of the grounds of appeal, and to seek any just and fair relief.
In the present appeal, the question involved is allowability of employees‟ contribution of ESIC and PF, which was deposited beyond time mentioned in the respective Statutes but before filing income tax return u/s 139(1) of the Act.
No one has appeared on behalf of the appellant-assessee. We heard ld. DR, perused the records. In this case, the DCIT (CPC), Bengaluru vide an order u/s 143(1) of the Act dated 02.07.2020 disallowed an amount of Rs.5,35,998/- by giving following reasons: “Any sum received from employees as contribution to any provident fund or superannuation fund or any fund set up under ESI Act or any other fund for the welfare of employees to the extent not credited to the employees account on or before the due date [36(1)(va)]”.
4. From the plain reading of the order u/s 143(1), it is not clear whether any opportunity was provided before making the disallowance by the DCIT (CPC), Bengaluru. Aggrieved by the same, an appeal was filed before the CIT(A). The CIT(A) dismissed the appeal of assessee.
A.Y. 2019-20 Durvankur Dining Hall vs. ACIT/DCIT
Hon‟ble Rajasthan High Court in the case of Rajasthan State Beverages Corpn. Ltd vide order dated 4/8/216 has held as under: Quote “This court in the aforesaid case has also allowed the claim of the assessee, in so far as payment of PF & ESI etc. is concerned, on the finding of fact that the amounts in question were deposited on or before the due date of furnishing of the return of income and taking in consideration judgment of this Court in CIT v. State Bank of Bikaner & Jaipur [2014] 363 ITR 70/43 taxmann.com” Unquote
The SLP filed against the said decision has been dismissed by Hon‟ble SC.
Hon‟ble Jurisdictional High Court held in the case of CIT vs Ghatge Patil Transports Ltd, IT APPEAL NOS. 1002 & 1034 OF 2012 vide order dated 14/10/2014 as under : Quote , “ In this manner, the amendment provided by Finance Act, 2003 put on par the benefit of deductions of tax, duty, cess and fee on the one hand with contributions to various Employees' Welfare Funds on the other. All this came up for consideration before the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. (supra). The Tribunal in the case at hand relied upon the said judgment. There is no reason to fault the order passed by the Tribunal. We are of the A.Y. 2019-20 Durvankur Dining Hall vs. ACIT/DCIT view that the decision of the Supreme Court in Alom Extrusions Ltd. (supra) applies to employees' contribution as well as employers' contribution. Question Nos.2, 3 & 4 are accordingly answered in favour of the assessee and against the revenue. ” Unquote. Thus respectfully following the Hon‟ble High Courts it is held that the payment of employee‟s contribution beyond the due date mentioned in the relevant statute but before the due date of filling the return of income u/s 139(1) is allowable expenditure.
In the result, the assessee‟s appeal is allowed.
Order pronounced in the open Court on 19th September, 2022.
Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) ACCOUNTANT MEMBER JUDICIAL MEMBER पपणे / Pune; ददिधंक / Dated : 19th September, 2022 GCVSR आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : अपऩलधर्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2.
3. The concerned CIT(A).
The concerned Pr. CIT. नवभधगऩयप्रनिनिनर्,आयकरअपऩलऩयअनर्करण, “ए” बेंच, 5. पपणे / DR, ITAT, “A” Bench, Pune. गधर्ाफ़धइल / Guard File. 6. आदेशधिपसधर / BY ORDER, // TRUE COPY // Senior Private Secretary आयकरअपऩलऩयअनर्करण, पपणे/ITAT, Pune.
A.Y. 2019-20 Durvankur Dining Hall vs. ACIT/DCIT
S.No Details Date Initials Designation 1 Draft dictated on 15.09.2022 Sr. PS/PS 2 Final Draft placed before 15.09.2022 Sr. PS/PS author 3 Draft proposed & placed JM/AM before the Second Member 4 Draft discussed/approved by AM/AM Second Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order