DCIT CORPORATE CIRCLE 1, COIMBATORE vs. INDO SHELL MOULD LIMITED, COIMBATORE

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ITA 3091/CHNY/2017Status: DisposedITAT Chennai23 July 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 upheld the CIT(A)'s order, stating that since the CIT(A) followed the jurisdictional High Court's decision, there was no reason to interfere. The Revenue's appeal was dismissed.

What were the facts?

The Assessing Officer disallowed the assessee's claim for employee contributions to PF and ESI, as they were not paid by the due date. The CIT(A) deleted the addition, holding that the payments were made before the due date of filing the return of income.

What were the issues?

Whether disallowance under Section 36(1)(va) is warranted if employee contributions to PF/ESI are paid before the due date of filing the return of income, and if Section 43B has an overriding effect.

Which sections of the Income-tax Act were involved?

Section 2(24)(x),Section 36(1)(va),Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

Hearing: 23.07.2018Pronounced: 23.07.2018

आदेश/ O R D E R

PER S. JAYARAMAN, ACCOUNTANT MEMBER:

1.

The Revenue filed this appeal against the order of the Commissioner of Income Tax (Appeals)- 1, Coimbatore, in dated 12.10.2017 for assessment year 2013-14

2.

M/s. Indo Shell Mould Limited, the assessee, is in the business of manufacturing of ferrous and non ferrous castings. While making the assessment for assessment year 2013-14, the AO found that the assessee collected Rs. 61,65, 419/- (Rs. 56,24,214/- towards PF contribution + Rs. 5,41,205/- towards ESI) from its employees and it has not paid to the PF authorities within the due date specified in the Provident Fund Act and hence the AO invoking provisions of section 2(24)(x) r.w.s. 36(1)(va) disallowed.

Aggrieved, the assessee filed an appeal before the Ld. CIT(A) and the Ld. CIT(A) following the Jurisdictional High Court decision in the case of CIT vs M/s. Industrial Security & Intelligence India Pvt. Ltd., Tax case (Appeal) Nos.

585 & 586 of 2015 held that since, the assessee made the remittance of employees contribution towards ESI and PF account before the date of filing of the return of income u/s. 139(1) of the Income Tax Act, 1961, no disallowance can be made u/s. 43B and accordingly deleted the addition made by the AO.

3.

Aggrieved, the Revenue filed this appeal with the following grounds of appeal:

“1.The order of the ld. CIT(A), Coimbatore is against the facts and circumstances of the case and is erroneous by law. 2. Whether on the facts and circumstances of the case, the ld. CIT(A) was justified in allowing the appeal of the assessee relying upon the jurisdictional High Court’s decision in the case of CIT vs. Industrial Security and Intelligence Industries India Pvt Ltd, which was rendered on 24.7.2015, which is prior to issue of circular No.22/2015 dt. 17.12.2015.

3. Whether on the facts and circumstances of the case, the ld. CIT(A) was justified in stating that section 438 has over riding effect on section 36(1)(va) as section 438(b) deals with allowability of employer’s contribution to welfare funds whereas section 36(1)(va) deals with employees’ contribution to welfare funds.

4.

For these and other grounds that may be adduced at the time of hearing, the order of the ld. CJT(A), may be cancelled and that of the Assessing Officer be restored.”

The Ld. DR made the case on the lines of grounds of appeal. None was appeared from the assessee’s side.

4. We have considered the plea made by the Ld. DR. Since, the Ld. CIT(A) applied the decision of the Jurisdictional High Court, we do not find any reason to interfere with his order. The Revenue’s appeal is dismissed.

5.

In the result, the Revenue’s appeal is dismissed.

Order pronounced on Monday, the 23rd day of July, 2018 at Chennai.

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