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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI R. K. PANDA & MS. SUCHITRA KAMBLE
PER R. K. PANDA, AM : This appeal filed by the assessee is directed against the order dated
30.11.2015 of the ld. CIT(A)- 1, Raipur (CG) relating to assessment year
2012-13.
The ld. counsel for the assessee did not press the ground of appeal no.1
relating to ad-hoc disallowance of Rs.1,50,000/- on account of manufacturing
expenses for which ld. DR has no objection. Accordingly, the ground of appeal
no.1 by the assessee is dismissed.
Ground no.2 by the assessee reads as under :- “2. On the facts and in the circumstances of the case, the Learned CIT(A) has erred in confirming the addition made by the A.O. of Rs.1,75,233/- on account of
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delay in payment of PF/ESIC. The addition made by A.O. and sustained by Ld. CIT(A) is unjustified, unwarranted and uncalled for.”
Facts of the case, in brief, are that the assessee is a private limited
company engaged in the business of manufacturing of M.S. Angle, Flat,
Channel, Ribbed Bar, CTD Bar etc.. It filed its return of income on 30.09.2012
declaring total income at Rs.14,68,380/-. During the course of assessment
proceedings, the Assessing Officer observed that the assessee has debited an
amount of Rs.25,642/- under the head ESIC. He observed that as per Annexure
to Form No.3CD of the Audit Report an amount of Rs.18,237/- was deposited in
the Government Account after the due date. Similarly, out of employees’
contribution of PF Account out of Rs.1,73,586/- an amount of Rs.1,56,996/-
was deposited in Government Account after the due date. He, therefore,
disallowed the above two amounts u/s 36(1)(va) of the I.T. Act.
In appeal, the ld. CIT(A) upheld the order of the Assessing Officer by
observing as under :-
“3.3 The appellant has contended that section 43B overrides section 36 due to which the amount should be allowed. However the appellant has not appreciated the provisions of the Act properly. The amounts in question Rs.18,237/- and Rs.1,56,996/- are employee’s contribution to ESIC and PF respectively. Clause (b) of section 43B is applicable to employer’s contribution. Employee’s contribution is governed by sections 2(24)(x) and 36(1)(va) When the contribution is received by the employer from employee, it is included in employer’s income by virtue of section 2(24)(x). When the respective amount of employee’s contribution is paid to PF/ESIC account the deduction is allowed under section 36(1)(va). However this payment should be made within the due date prescribed under the PF Act. In the present case, the payment has been made after the due date. Therefore, the assessee will not get any deduction. This disallowance is sustained.”
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Aggrieved with such order of the ld. CIT(A), the assessee is in appeal
before the Tribunal.
The ld. counsel for the assessee, at the outset, filed a copy of the decision
of the Raipur Bench of the Tribunal in the case of DCIT vs. Hira Ferro Alloys
Ltd. vide ITA No.358 to 360/Rpr/2014 order dated 18.01.2018 for assessment
years 2009-10 to 2011-12 respectively. Referring to the said decision, he
submitted that the Tribunal after considering various decisions has decided the
issue in favour of the assessee and dismissed the appeal filed by the Revenue on
the ground that the assessee has deposited the amount before the due date of
filing of return u/s 139(1) of the I.T. Act. He accordingly submitted that this
being a covered matter the disallowance made by the Assessing Officer and
upheld by the ld. CIT(A) should be deleted.
The ld. DR on the other hand heavily relied on the order of the ld.
CIT(A).
We have considered the rival arguments made by both the sides and
perused the material available on record. It is an admitted fact that the
employees’ contribution to PF and ESIC, although deposited after the due date
prescribed under the relevant Act, however, has been deposited before the due
date of filing of the return of income u/s 139(1) of the I.T. Act, 1961. The
Raipur Bench of the Tribunal in the case of Hira Ferro Alloys Ltd. (supra) while
adjudicating the identical issue at para 55 of the order has observed as under :-
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“55. After hearing ld. D.R. and perusing the orders of the lower authorities, we find that the CIT(A) relying on the decision of the Delhi High Court in CIT vs. AIMIL Limited [2010] 188 TAXMAN 265 (DELHI), wherein, it has been held that the employee’s contribution towards EPF and ESI etc. deposited after the due date but before the time allowed for filing the return u/s 139(1) will not call for any disallowance u/s 36(1)(va), has deleted the disallowance. We find that the assessee has deposited the amount before the due date u/s 139(1). Therefore, we confirm the order of the CIT(A) and dismiss the ground of appeal of the revenue.”
Since the assessee in the instant case has undisputedly deposited the
employees’ contribution to PF and ESIC before the due date of filing of the
return, therefore, respectfully following the decision of the Tribunal cited
(supra) the disallowance made by the Assessing Officer and upheld by the ld.
CIT(A) is deleted. The ground raised by the assessee is allowed.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open Court at the time of hearing itself i.e. on this 14th August, 2018.
Sd/- Sd/- (SUCHITRA KAMBLE) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 14-08-2018. Sujeet Copy of order to: - 1) The Appellant 2) The Respondent 3) The CIT 4) The CIT(A) 5) The DR, I.T.A.T., Raipur. By Order //True Copy// Sr. Private Secretary ITAT, Raipur