JCIT, NEW DELHI vs. M/S. INDIAN IRON STEEL CO. LTD., NEW DELHI

PAN:AAACI7171D (Appellant) (Respondent) Department by Sh. Arun Kumar Yadav, Sr. O DR O Respondent by None R Date of Hearing 14.12.2017 O Date of Pronouncement 15.12.2017 R ORDER PER K.N. CHARY, JUDICIAL MEMBER Challenging the order dated 14.3.2016 in Appeal No. 1170/CIT(A)-1/C-3(1)/2015-16 passed by the Ld. Commissioner of Income Tax (Appeals)-1, Kolkata (for short hereinafter refe3rred to as “Ld. CIT(A)”), Revenue preferred this appeal on the following grounds: “i. Whether the Ld. CIT(A) was justified in deleting the addition made by the AO u/s 43B on account of late depositing of PF, contributed by employees, in relevant fund scheme by the assessee which was mandatory u/s 36(1) (va) read with section 2(24)(x) of the I.T. Act. ii. The appellant craves to amend modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal.”

2. Briefly stated the facts are that the assessee derives income from Iron & Steel Manufacturing and Trading. For the AY 2004-05 they have filed their return of income on 29.10.2004 showing the total income as nil and subsequently revised the same on 23.8.2005. Assessment under section 143(3) of the Income Tax Act, 1961 (for short hereinafter referred to as “the Act”) was completed at a nil taxable income. However, by way of order dated 22.1.2008 passed under section 143(3) / 154 of the Act, learned AO made an addition of Rs. 1903.23 lacs under section 43B of the Act holding that as per item 16(b) of the tax and audit report, employees contribution of PF was deposited beyond the due date and as per section 36(1)(va) of the Act, any sum received on account of employees contribution towards PF is allowable only if such sums are credited by the assessee to the employers account in the relevant fund on or before the respective due dates. As there is no provision to allow late deposit of contribution to PF by employees the amount of Rs. 19,03,23,781/- should be disallowed u/s 43B of the Act and added back to the total income of the assessee.

3. In the appeal preferred by the assessee, learned CIT(A) deleted the said amount, while following the decisions reported in the case of CIT vs. Alom Extrusion Ltd. 319 ITR 306 SC and CIT vs. Venus Cement Ltd. 2013 CTR 268 and CIT vs. Vijayashree Ltd. Hence the Revenue is in this appeal before us.

4. It is contended by the learned DR that the second proviso to section 43B of the Act, providing for disallowance of items in clause (b) namely Provident Fund and ESI deposited beyond due date was omitted by Finance Act, 2003 w.e.f. 01.04.2004 relevant to AY 2004-05. The AR further relied upon various decisions in the case of CIT vs. Alom Extrusion Ltd. 319 ITR 306 SC, CIT vs. Venus Cement Ltd. 2013 CTR 268 and CIT vs. Vijayashree Ltd. The issue is no longer res integra inasmuch as the Hon’ble Calcutta High Court held that whether the deletion of the additions on account of employees’ contribution to ESI and PF by invoking the provisions of Section 36(1)(va) read with section 2(24)(x) of the Act is not at all a substantial question of law. Learned Sr. DR heavily relied upon the order of the Ld. AO.

5. On a careful consideration of the matter we find that the learned CIT(A) on verification of the record found that the contribution was actually paid for various months before the due date of filing and the decisions of the Hon’ble Calcutta High Court in Vijayashri Ltd. case (Supra) is applicable to the facts of the case. In view of this factual and legal position that the second proviso to section 43B of the Act was omitted by Finance Act, 2003 w.e.f. 01.04.2004 we find that the impugned order does not suffer any illegality or irregularity, so that it needs to be interfered with. We, therefore, uphold the finding of the learned CIT(A) and find that the appeal is devoid of merits. We accordingly dismiss the same.