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Income Tax Appellate Tribunal, ‘A’ BENCH : CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P. GEORGE]
आदेश / O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
Appeals filed by the Revenue are directed against an order dated 09.05.2017 of ld. Commissioner of Income Tax (Appeals)-8, Chennai for assessment year 2013-14 and assessment year 2014- 2015. Cross objection filed by the assessee is only for assessment year 2013-2014.
Revenue has taken altogether three grounds of which ground No. 1 & 3 are general needing no specific adjudication,
Ground No.2 which is the only effective ground is reproduced hereunder:-
2. The CIT(A) erred in deleting the addition of Rs 42,21,653/- made u/s 36(i)(va) r.w.s 2(24)(x) of the Income tax Act, 1961. 2.1 As per the provisions of section 36(1)(va) deduction in respect of any sum received by the tax payer as contribution from his employees towards any welfare fund of such employees is allowed only if such sum is credited by the tax payer to the employees' account in the relevant fund on or before the due date. Due date means the date by which the assessee is required as an employer to credit such contribution to the employee's account in the relevant fund under the provisions of any law or term of contract of service or otherwise. 2.2 It is pertinent to mention that the provisions of section 43B of the Income tax Act 1961 is not applicable &1803/17, CO133/17 :- 3 -:
in the case of employees' contribution towards PF/ESI. 2.3 It is submitted that the CBDT in Circular No. 22/2015 dated 17.12.2015 has clarified that deduction relating to employees' contribution to welfare funds are governed by section 36(1)(va) of the Incometax Act. This circular was issued by the CBDT in the light of the judicial decision in the case of CIT vs Alom Extrusions Ltd (2009) 185 TAXMAN 416 (SC) 2.4 The decision of the jurisdictional High Court in the case of M/s Industrial Security & Intelligence India Pvt Ltd has not been accepted and a Review Petition has been filed before the Hon'ble High Court of Madras.
Ld. Counsel for the Revenue submitted that Revenue had not 4. accepted the judgment of Hon’ble Jurisdictional High Court in the case of CIT vs. Industrial Security & Intelligence India Pvt Ltd. (TCS No.585 & 586 of 2015, dated 24.07.2015). According to him, contribution by the employees towards welfare funds, remitted after due date prescribed in the respective enactments had to be disallowed u/s.36(i)
(va) of the Act. Reliance was also placed on CBDT Circular No.22/2015, dated 17.12.2015.
Per contra, ld. Authorised Representative submitted that the 5.
order of the ld. Commissioner of Income Tax (Appeals) was founded on a judgment of Jurisdictional High Court and could not be assailed.
That apart, according to him, for assessment year 2013-2014, disallowance was made through a rectification u/s.154 of the Income &1803/17, CO133/17 :- 4 -:
Tax Act, 1961 (in short ‘’the Act’’). This issue was raised by the assessee in its cross objection.
We have considered the rival contentions and perused the orders of the authorities below. What has been held by Hon’ble Jurisdictional High Court in the case of Industrial Security & Intelligence India Pvt Ltd. (supra) is reproduced hereunder:-
’5. We find that the Tribunal has righty relied on the decision of the Supreme Court in the case of CIT vs. Alom Extrusions Ltd, reported in 319 ITR 306, whereby the Supreme Court held that omission of second proviso to Section 43B and amendment to first proviso by Finance Act, 2003 are curative in nature and are effective retrospectively. i.e. with effect from 01.01.1988 i.e the date of insertion of first proviso. The Delhi High Court in the case of CIT vs. Amil Ltd, reported in 321 ITR 508 held that if the assessee had deposited employee’s contribution towards Provident Fund and ESI after due date as prescribed under the relevant Act, but before the due date of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of Section 43B as amended by Finance Act, 2003.
6. In the present case, the assessee had remitted the employees contribution beyond the due date for payment, but within the due date for filing the return of income. Hence, following the above said decisions, we find no reason to differ with the findings of the Tribunal. Accordingly, we find no question of law much less any substantial question of law arises for consideration in these appeals.
&1803/17, CO133/17 :- 5 -:
Hon’ble Jurisdictional High Court had also considered CBDT Circular No.22/2015, dated 17.12.2015 while giving the judgment. In the circumstances, we do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals).
Since appeals of the Revenue are being dismissed, cross 7. objection filed by the assessee has become infructuous.
To summarize the results, both the appeals of the Revenue as well as cross objection of the assessee are dismissed.
Order pronounced on Thursday, the 3rd day of May, 2018, at Chennai.