Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI INTURI RAMA RAO & SHRI DUVVURU R.L.REDDY
आदेश / O R D E R PER DUVVURU R.L.REDDY, JUDICIAL MEMBER:
Both the appeals filed by the assessee are directed against the Order of the Commissioner of Income Tax (Appeals)-7, Chennai, in & in ITA No.339(T)/CIT(A)-7/2016-17 dated 29.01.2019 for the AYs 2013-14 & 2014-15 respectively. & 1072/Chny/2019 :- 2 -:
The only grievance of the assessee in both the appeals is that the Ld.CIT(A) erred in disallowing an amount of Rs.21,79,320/- & Rs.9,72,263/- for the AYs 2013-14 & 2014-15 respectively on account of delayed remittance of employees contribution towards EPF & ESI u/s.36(1)(va) r.w.s.2(24)(x) of the Income Tax Act, 1961. Brief facts of the case of the assessee are that the assessee company engaged in service provider for commercial documents exchange for banks and other financial institutions. The assessee filed its return of income for the AY 2013-14 on 30.09.2013 admitting loss of Rs.38,33,444/- and for the AY 2014-15 on 28.11.2014 admitting ‘Nil’ income with a carried forward loss of Rs.37,64,013/- and both the cases were selected for scrutiny under CASS and notices u/s.143(3) were served on the assessee. After considering the submissions of the assessee, the AO completed the assessment u/s.143(3) of the Act on 17.03.2016 determining the loss at Rs.1,27,31,860/- by making disallowance/additions of Rs.88,98,416/- for the AY 2013-14 and on 21.12.2016 determining the loss at Rs.93,03,106/- by making various disallowances of Rs.55,39,093/- and also denied the carried forward loss to the tune of Rs.38,33,444/- & Rs.37,64,013/- for the AYs 2013-14 & 2014-15 respectively. Out of this, the disallowance u/s.36(1)(va) r.w.s.2(24)(x) of Rs.21,79,320/- & Rs.9,72,263/- for the AYs 2013-14 & 2014-15 respectively, which is the subject matter of this appeal. & 1072/Chny/2019 :- 3 -:
Aggrieved, the assessee has preferred both the appeals before the Ld.CIT(A). The Ld.CIT(A) directed the AO to consider some of the disallowances/additions. However, the Ld.CIT(A) confirmed the disallowance on account of the remittance of employee’s contribution towards EPF & ESI u/s.36(1)(va) r.w.s.2(24)(x).
On being aggrieved, the assessee preferred both the appeals before the Tribunal. The ld.Counsel for the assessee submitted that the Ld.CIT(A) erred in disallowing contribution of Rs.21,79,320/- & Rs.9,72,263/- for the AYs 2013-14 & 2014-15 respectively on account of delayed remittances. He further submitted that the assessee has remitted the above said remittances within the time limit prescribed u/s.139(1) of the Act. The similar issue has been taken up by the Hon’ble jurisdictional High Court in the case of M/s.Industrial Security & Intelligence India Pvt. Ltd., in & 2049/Mds/2014 dated 31.10.2014 and decided this issue in favour of the assessee. Therefore, the orders passed by the Ld.CIT(A) liable to be set aside. On the other hand, the Ld.DR submitted that the assessee failed to remit these amounts within the time prescribed under the PF Act. Therefore, the assessee is not entitled for deduction and the said amounts to be treated as income within the meaning of Sec.2(24)(x) of the Act. Therefore, the orders passed by the Ld.CIT(A) liable to be confirmed. & 1072/Chny/2019 :- 4 -:
We have heard both the parties and also perused the orders passed by the Hon’ble jurisdictional High Court in the case of M/s.Industrial Security & Intelligence India Pvt. Ltd., in Tax Case (Appeal) Nos.585 & 586 of 2015 dated 24.07.2015, wherein, Para Nos.5 & 6 as held as under:
“……5. We find that the Tribunal has rightly relied on the decision of the Supreme Court in the case of. CIT V. Alom Extrusions Ltd. reported in 319 ITR 306, whereby, the Supreme Court held that omission of second proviso to Section 435 and amendment to first proviso by Finance Act, 2003 are curative in nature and are effective retrospectively, i.e., with effect from 1.4.1988 i.e., the date of insertion of first proviso. The Delhi High Court in the case of CIT V. Amil Ltd. reported in 321 ITR 508 held that if the assessee had deposited employee’s contribution towards Provident Fund and ESI after due date as prescribed under the relevant Act, but before the due date of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of Section 435 as amended by Finance Act, 2003.
In the present case, the assessee had remitted the employees contribution beyond the due date for payment, but within the due date for filing the return of income. Hence, following the above-said decisions, we find no reason to differ with the findings of the Tribunal. Accordingly, we find no question of law much less any substantial question of law arises for consideration in these appeals. Accordingly, both the Tax Case (Appeals) stand dismissed. No costs. Consequently, M.P.No.1 of 2015 is also dismissed”.
6. Upon perusal of the above said decision rendered by the Hon’ble High Court, we are of the view that this issue is squarely covered by the decision of the Hon’ble High Court. Hence, we are of the view that the orders passed by the Ld.CIT(A) is not in accordance with law and therefore, liable to be set aside. Consequently, the grounds raised by the assessee in both the appeals are allowed.
In the result, both the appeals filed by the assessee are allowed.
Order pronounced on the 10th day of September, 2019 in Chennai.