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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1016/JP/2016
PER SHRI KUL BHARAT, JM.
This appeal by the assessee is directed against the order of ld. CIT (A) Alwar,
dated 07.10.2016 pertaining to assessment year 2013-14. The assessee has raised
the following grounds of appeal :-
“The ld. CIT(A) has erred on facts and in law in confirming the disallowance of Rs. 13,82,959/- being employees’s contribution of PF u/s 36(1)(va) read with section 2(24)(x) of the IT Act, 1961 ignoring that the same is deposited beore the end o the yea and the issue is covered by the decision of Rajasthan High Court in case of CIT Vs. State Bank of Bikaner & Jaipur 363 ITR 70, CIT Vs. Jaipur Vidyut Vitran Nigam Ltd. 363 ITR 307 and CIT Vs Udaipur Dugdh Utpadak Sahakari Sangh Ltd, 366 ITR 163.
The assessee craves right to add, alter or amend any of the grounds of the appeal.
The appropriate cost be awarded to the assessee.”
2 ITA No. 1016/JP/2016 M/s The Alwar Central Co-operative Bank Ltd.
Only effective ground is against confirmation of disallowance of Rs.
13,82,959/- being employee’s contribution provident to PF.
Briefly, stated the facts are that the case of the assessee was picked up for
scrutiny assessment and the assessment under section 143(3) of the Income Tax Act, 1961(hereinafter referred to as the Act) was framed vide order dated 5th Jan,
2016. While framing the assessment, the assessing Officer made addition on
account of investment in LIC for leave encashment of Rs. 30 lakhs. Addition on
account of interest in Income Tax refund of Rs. 22,50,035/- received by the
Assessee. The Assessing Officer made addition on interest of Rs. 2,53,682/-
received on the Income Tax Refund. Further the Assessing Officer made
disallowance of employee’s contribution towards PF on account of late payment.
Aggrieved by this, the assessee preferred an appeal before ld. CIT(A), who after
considering the submissions partly allow the appeal. Thereby, he sustained the
addition of Rs. 13,82,959/- made on account of disallowance of employees
contribution deposited as deposited late. Aggrieved by this, the assessee is in
present appeal before this Tribunal.
At the outset, the ld. Counsel for the assessee submitted that the assessee is
covered by the decisions of the Rajasthan High Court in the case of CIT Vs. State
Bank of Bikaner & Jaipur and Jaipur Vidyut Vitaran Nigam Ltd. 364 ITR 70(Raj).
3.1 On the contrary, Ld. Departmental Representatives opposed the submissions
and supported the orders of the authorities below.
3.2 We have heard the rival contention, perused the material available records
and gone through the orders of the authorities below. The Assessing Officer has
3 ITA No. 1016/JP/2016 M/s The Alwar Central Co-operative Bank Ltd.
made addition on the ground that the Central Board of Direct Taxes vide circular no.
22/2015 dated 17/12/2015 clarified that deduction is allowable to the employees
assessee if he deposit the employer contribution to welfare fund on or before the
‘due date’ of filing of return of income in view of decision Hon’ble Apex Court in the
case of CIT vs. Alom Extursions Ltd. The CBDT further clarified that this circular
does not apply to the claim of deduction relating to employee’s contribution to
welfare fund which are governed by section 36(1)(va) of the IT Act. This issue has
been decided to the jurisdictional High Court in the case of CIT Vs. State Bank of
Bikaner and Jaipur 363 ITR 70 (Raj) wherein the Hon’ble High Court as held as
under:-
“A conjoint reading of the proviso to section 43B which was inserted by the Finance Act, 1987, made effective from April 1, 1988, the words numbered a claused (a), (c), (d),(e) and (f), are omitted from the above proviso and, further more a second proviso was removed by the Finance Act, 2003, therefore, the deduction towards the employer’s contribution, if paid, prior to due date of filing of the return can be claimed by the assessee. In our view, the Explanation appended to section 36(1)(va) of the Act further envisage that the amount actually paid by the assessee on or before the due date admissible at the time of submitting return of the income under section 139 of the Act in respect of the previous year can be claimed by the assessee for deduction out of their gross total income. It is also clear that section 43B starts with a notwithstanding clause and would thus override section 36(1)(va) and if read in isolation section 43B would become obsolete. Accordingly, contention of counsel for the Revenue is not tenable for the reason aforesaid that deductions our of the gross income or payment of tax at the time of submission of return under section 139 is permissible only if the statutory liability of payment of PF or other contribution referred to in clause (b) are paid within the due date under the respective enactments by the assessee and not under the due date of filing of return.” Respectfully followings the judgment of Hon’ble Jurisdictional High Court, we direct
the Assessing Officer to delete the disallowance.
4 ITA No. 1016/JP/2016 M/s The Alwar Central Co-operative Bank Ltd.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 08 /03/2017.
Sd/- Sd/- ( dqy Hkkjr) ¼foØe flag ;kno½ (VIKRAM SINGH YADAV) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 08 /03/2017. Das/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
The Appellant- M/s The Alwar Central Co-operative Bank Ltd. 2. The Respondent- The ACIT Circle-2, Alwar. 3. The CIT, 4. The CIT (A) 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 1016/JP/2016)
vkns'kkuqlkj@ By order,
सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत