DCIT CORPORATE CIRCLE 2(1), CHENNAI vs. EASTERN CHROME TANNING CORPORATION PVT LTD., CHENNAI

PDF · subscribers
ITA 1022/CHNY/2018Status: DisposedITAT Chennai24 September 2018AY 2013-144 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that no deemed addition can be made under Section 36(1)(va) read with Section 2(24)(x) of the Act if the amount is paid before the due date of filing the return of income. This decision followed a High Court ruling.

What were the facts?

The assessee company remitted employee contributions to PF and ESI belatedly, but within the due date for filing the return of income. The Assessing Officer treated these delayed payments as income of the assessee.

What were the issues?

Whether belated remittance of employee's contribution to PF and ESI, if paid before the due date of filing the return, can be disallowed as income.

Which sections of the Income-tax Act were involved?

Section 2(24)(x),Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABRAHAM P.GEORGE & SHRI DUVVURU R.L.REDDY

Hearing: 27.08.2018Pronounced: 24.09.2018

आदेश / O R D E R PER DUVVURU R.L.REDDY, JUDICIAL MEMBER:

1.

This appeal filed by the Revenue is directed against the order of the Commissioner of Income Tax(Appeals)-6, Chennai, in 6/2016-17 dated 29.12.2017 for the AY 2013-14.

2.

Brief facts of the case are that the assessee company is engaged in the business of manufacturing of leather shoe upper and filed its return of income for the AY 2013-14 on 28.09.2013 admitting a total income of Rs.48,89,020/-. The case was selected for scrutiny and notice u/s.143(2) dated 02.09.2014 was issued and duly served on assessee on 22.09.2014.

After considering the details furnished by the assessee against statutory notices as well as the submissions of the assessee, the assessment u/s.143(3) of the Act was completed by determining the total income of Rs.1,32,48,810/-. During the course of assessment proceedings, the AO has noticed that the contribution to PF & ESI collected from the employees had been remitted belatedly. Accordingly, the AO treated the delayed payments representing employees contribution towards PF and ESI of Rs.83,59,786/- as income of the assessee and brought to tax u/s.2(24)(x) r.w.s.36(i)(a) of the Act.

3.

The assessee carried the matter in appeal before the Ld.CIT(A) and challenged the above said disallowance.

4.

After considering the submissions of the assessee and by relying upon the decision of the Hon’ble Madras High Court in the case of CIT vs. Industrial Security & Intelligence India Pvt. Ltd. in TCA No.585 & 586 of 2016 & MP No.1 of 2015 dated 24.07.2015, Ld.CIT(A) deleted the addition and allowed the appeal filed by the assessee.

5.

Aggrieved the Revenue is in appeal before the Tribunal and challenged the issue with regard to belated remittances of employees contribution towards PF. The Ld.DR has submitted that the employees contribution of ESI & PF are governed by the Sec.36(1)(va) and not under 43B of the Act.

6.

In spite of service of notice (Ack. on record), neither assessee nor his representative appeared during the course of hearing of the appeal.

Hence, we proceed to decide the issue on merits after considering the submissions of the Ld.DR.

7.

We have heard the Ld.DR, perused the materials placed on record and gone through the orders of authorities below. In the present case on the hand, the assessee failed to remit the PF & ESI amounting to Rs.83,59,786/- within the due date under PF Act but the assessee had remitted the same within the due date of filing of the return of income.

There is no dispute about the above said contention. We have also perused the ratio laid down in the case of CIT vs. Industrial Security & Intelligence India Pvt. Ltd. in TCA No.585 & 586 of 2016 & MP No.1 of 2015 dated 24.07.2015, wherein, it was held that there could be no deemed addition u/s.36(1)(va) r.w.s.2(24)(x) of the Act if the impugned amount paid before the due date of the filing of the return. This Tribunal has also followed the above decision of the Hon’ble Jurisdictional High Court in deciding the similar issue in various cases. In view of the above we sustain the order passed by the Ld.CIT(A) in deleting the addition and thus the ground raised by the Revenue is dismissed.

8.

In the result, the appeal filed by the Revenue is dismissed.

More judgments on Section 2(24)(x)

All 2,270 judgments and leading authorities on Section 2(24)(x) →

Recent GST High Court judgments

Search GST case law →