ATUL ENTERPRISES,AHMEDABAD vs. THE DCIT, CPC, BANGALURU

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ITA 282/AHD/2020Status: DisposedITAT Ahmedabad10 June 2022AY 2018-193 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 dismissed the appeal, relying on the jurisdictional High Court's decision in CIT vs. GSRTC. The court held that if employee contributions are not credited to the employee's account by the due date under Section 36(1)(va), the deduction is not allowable even if deposited before the due date under Section 43B.

What were the facts?

The assessee claimed a deduction for employee's contribution to PF/ESI. The CIT(A) disallowed this amount, and the assessee appealed, arguing it was paid before the return filing due date.

What were the issues?

Whether disallowance of employee's contribution to PF/ESI is justified when paid before the return filing due date but not by the due date specified in Section 36(1)(va).

Which sections of the Income-tax Act were involved?

Section 36(1)(va),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, “B” BENCH, AHMEDABAD

Before: SHRI PRAMOD M JAGTAP&

For Respondent: Shri Abhimanyu Singh Yadav, Sr. DR
Hearing: 09.06.2022Pronounced: 10.06.2022

The instant appeal filed by the assessee is directed against the order dated 24.02.2020 passed by the Commissioner of Income Tax (Appeals)-3, Ahmedabad arising out of the order dated 16.10.2019 passed by the DCIT(CPC), Bengaluru under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2018-19.

2.

The grounds of appeal

raised by the assessee are read as under: “1. The learned CIT(A) erred in law and on facts in making disallowance of Rs.692355/- u/s.36(1)(va) of the Act eventhough the same is allowable u/s. 43B of the Act on payment basis.

2. The learned CIT(A) ought to have seen that the appellant paid the said P.F., E.S.I. during the financial year itself/before the due date of filing of return and hence fully allowable.

3. The learned CIT(A) while passing the said order have not allowed opportunity of being heard eventhough the appellant had filed adjournment letter

Atul Enterprises vs. DCIT Asst.Year –2018-19 - 2 - requesting to file written submissions along with case laws in the said matter dated Total tax effect.”

3.

At the time of call, none appears on behalf of the assessee neither any written notes of submissions was filed before us. Further that it appears from the fact that employees’ contribution has not been paid within the due date prescribed under the provision of law though, according to the assessee it was paid before filing of return for the year under consideration. We find the identical facts and circumstances of the case the ground of appeal has already been decided against the assessee by the Hon’ble Jurisdictional High Court in the case of CIT vs. GSRTC, reported in 366 ITR 170. While dealing with this particular aspect of the matter the Hon’ble Court was pleased to observe as follows:

“"Section 43B, read with section 36(1)(va) of the Income-tax Act, 1961 - Business disallowance — Certain deductions to be allowed on actual payment (Employees contribution) - Whether where an employer has not credited 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(1)(va), assesses shall not be entitled to deduction of such amount though he deposits same before due date prescribed under section 43B i.e., prior to filing of return under section 139(1) -Held, yes - Assesses State transport corporation collected a sum being provident fund contribution from its employees - However, it had deposited lesser sum in provident fund account — Assessing Officer disallowed same under section 43B -However, Commissioner (Appeals) deleted disallowance on ground that employees contribution was deposited before filing return - Whether since assessee had not deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1 )(va), disallowance made by Assessing Officer was just and proper - Held, yes [Para 8] [In favour of revenue]”

Respectfully relying upon the order passed by the Hon’ble Jurisdictional High Court on the identical facts we find it fit and proper to dismiss this ground of appeal filed by the assessee. Hence, the appeal

Atul Enterprises vs. DCIT Asst.Year –2018-19 - 3 - filed by the assessee is found to be devoid of any merit and thus, dismissed.

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