ITO, JAIPUR vs. PROFESSIONAL H R SERVICES PVT. LTD., JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh HkkxpUn] ys[kk lnL; ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 1120/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2013-14 cuke The ITO M/s. Professional H.R. Services (P) Ltd. Vs. Ward- 6(1), Jaipur 1/1081, Malviya Nagar, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAFCP 3030 P vihykFkhZ@Appellant izR;FkhZ@Respondent jktLo dh vksj ls@ Revenue by: Smt. Poonam Rai, DCIT-DR fu/kZkfjrh dh vksj ls@Assessee by: Shri Rajeev Sogani, CA lquokbZ dh rkjh[k@ Date of Hearing : 22/02/2017 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 22 /02/2017 vkns'k@ ORDER PER BHAGCHAND, AM The Revenue has filed an appeal against the order of the ld. CIT(A)-2 , Jaipur dated 26-10-2016 for the assessment year 2013-14 raising following grounds of appeal. ‘’On the facts and in the circumstances of the case and in law the ld. CIT(A)-II, Jaipur has erred in:- (i) Whether on the facts and circumstances of the case and in law the ld. CIT(A) was justified in deleting addition of Rs. 40,04,259/- made for depositing the

2 ITA No.1120/JP/2016 The ITO,Ward- 6(1), Jaipur vs. M/s. Professional H.R. Services (P) Ltd. , Jaipur

employee’s contribution to PF & ESI beyond the prescribed time limit provide in the respective Act.

(ii). Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) was justified in holding that employee’s contribution to PF & ESI are governed by the provisions of Section 43B and not by Section 36(10)(va) r.w.s. 2(24)(x) of the I.T. Act.’’

2.1 Apropos Ground No. 1 and 2 of the Revenue, the facts as emerges

from the order of the ld. CIT(A) is as under:-

‘’2.3 I have perused that facts of the case, the assessment order and the submission of the appellant. Admittedly, employee’s contribution to ESI and PF has been paid by the appellant, in all instances, before the due date of filing the return of income u/s 139(1). This fact is therefore, not in dispute. In view of the judgments of the Rajasthan High Court in the case Jaipur Vidhyut Vithran Nigam Ltd., 265 CTR 62 ( Raj.), CIT Vs. State Bank of Bikaner & Jaipur (2014) 99 DTR 131 ( Raj.) and ITAT, Jaipur, in the case of the assessee, the claim of the appellant is allowable. Accordingly, the disallowance made by the Assessing Officer is directed to be deleted. This ground is allowed. 2.2 During the course of hearing, the ld. DR relied on the order AO.

2.3 On the other hand, the ld. AR of assessee supported the order of the

ld. CIT(A).

2.4 I have heard the rival contentions and perused the materials

available on record. In this case, the AO noticed during assessment

proceedings that the assessee had failed to deposit EPF amounting to Rs.

3 ITA No.1120/JP/2016 The ITO,Ward- 6(1), Jaipur vs. M/s. Professional H.R. Services (P) Ltd. , Jaipur

33,58,280/- and ESI amounting to Rs. 6,45,979/-, totaling to Rs.

40,04,259/- on or before the prescribed due dates. Hence, the AO in terms

of Section 36(1)(va) read with Section 2(24)(x) of the I.T. Act disallowed

the amount of Rs. 40,04,259/- and added the same to the total income of

the assessee which has been deleted by the ld. CIT(A) in first appeal. The

Revenue is in appeal before this Bench praying that the ld. CIT(A) has

erred in deleting the amount of Rs. 40,04,259/- disallowed by the AO. It

is observed that that such issue has already been decided in favour of the

assessee by the ITAT Jaipur Bench in the case of ITO vs. M/s. S.

Brothers Facilities Management in ITA No. 957/JP/2016 for the

assessment year 2013-14 vide order dated 5 /01/2017 by observing as

under:-

‘’2.5 I have heard the rival contentions and perused the materials available on record. I have gone through the order of the ld. CIT(A) and the case laws submitted before the ld. CIT(A) which finds favour of the assessee. It may further be noted that such issue has also been decided by the ITAT, Coordinate Bench, Jaipur in favour of the assessee vide its order dated 27-09-2016 in the case of ACIT vs. Shri Shailendra Garg, C/o M/s. Garment Craft India (P) Ltd. (ITA No. 804/JP/2015 for the assessment year 2010- 11). It may be further noted that the Hon'ble Hon'ble Jurisdictional High Court in the case of CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (2014) 265 CTR 59 had considered this issue in detail at para 7 to 9 of its order as under:-

4 ITA No.1120/JP/2016 The ITO,Ward- 6(1), Jaipur vs. M/s. Professional H.R. Services (P) Ltd. , Jaipur

‘’7. Further, the hon'ble Supreme Court in CIT v. Vinay Cement Ltd. [2009] 313 ITR (St.) 1 (SC) while dismissing the special leave petition preferred by the Revenue against the judgment of the Gauhati High Court observed as under : ‘’In the present case, we are concerned with the law as it stood prior to the amendment of section 43B. In the circumstances the assessee was entitled to claim the benefit in section 43B for that period particularly in view of the fact that he has contributed to provident fund before filing of the return." 8. Following the observations of the hon'ble Supreme Court in Vinay Cement (supra), the Delhi High Court in CIT v. AIMIL Ltd. [2010] 321 ITR 508 (Delhi) held at page 518 as under : "We may only add that if the employees' contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Funds Act as well as the Employees' State Insurance Act. Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. In so far as the Income-tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down by the Supreme Court in Vinay Cement [2009] 313 ITR (St.) 1 (SC)." 9. In view of the settled legal position, the appeal preferred by the Revenue has no substance and the same is, therefore, dismissed. No costs. ‘’ In view of the above facts, circumstances of the case and the decisions mentioned above, I find no reason to interfere with the

5 ITA No.1120/JP/2016 The ITO,Ward- 6(1), Jaipur vs. M/s. Professional H.R. Services (P) Ltd. , Jaipur

order of the ld. CIT(A). Thus the appeal of the Revenue is dismissed. ‘’ In view of the above deliberations and respectfully following the orders of Hon'ble Jurisdictional High Courts in the cases of CIT vs. JVVNL 265 CTR 62 (Raj), and CIT vs. State Bank of Bikaner & Jaipur (2014), 99 DTR 131 (supra) and also the order of ITAT Jaipur Bench (supra), I find no reason to interfere with the order of the ld. CIT(A) on the issue in question. Thus Ground No. 1 and 2 of the Revenue are dismissed. 3.0 In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 22 /02/2017. Sd/- ¼HkkxpUn½ (Bhagchand) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 22 /02/ 2017 *Mishra आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- The ITO, Ward- 6(1), Jaipur 1. 2. izR;FkhZ@ The Respondent- M/s. Professional H.R. Services (P) Ltd. Jaipur vk;dj vk;qDr¼vihy½@ CIT(A). 3. 4. vk;dj vk;qDr@ CIT, विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 1120/JP/2016) vkns'kkuqlkj@ By order,

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