C. DOCTOR & CO. P.LTD,MUMBAI vs. ACIT 10(1), MUMBAI

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ITA 5654/MUM/2011Status: DisposedITAT Mumbai15 February 2024AY 2008-095 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that sums collected from employees as PF and ESI contributions, if not deposited within the due dates prescribed by the respective acts, are disallowable, even if deposited before the return filing due date. This is based on the Supreme Court's decision in Checkmate Services Pvt. Ltd.

What were the facts?

The assessee collected employees' contributions towards Provident Fund and ESI but deposited them after the due dates prescribed by the respective acts, though before the due date for filing the return of income. The Assessing Officer and CIT(A) disallowed these amounts.

What were the issues?

Whether employees' contributions to Provident Fund and ESI, paid after the statutory due dates but before the return filing due date, are allowable as deductions.

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

Cases cited in this judgment(6)Show list

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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI PRASHANT MAHARISHI, AM & SHRI NARENDER KUMAR CHOUDHRY, JM

For Respondent: Shri H.M. Bhatt, Sr. DR
1.

This appeal [ M/s. C. Doctor & Co. P. Ltd. [Assessee / Appellant] against the Appellate order passed by the Commissioner of Income Tax (Appeals) 21, Mumbai [Ld. CIT(A)] dated 19.4.2011 for Assessment Year 2008-09, wherein the appeal filed by the Assessee against the assessment order passed under section 143 (3) of The Income-tax Act, 1961 (the Act) dated

2.

The Assessee is aggrieved by the assessment order and is in appeal before us. The Assessee has raised the following grounds of appeal:-

1. a) The learned Commissioner of Income Tax (Appeals) -21, has erred in law and on facts in confirming disallowance made by the Assessing Officer of Rs. 8,14,634/-- being Employees' contribution to Provident Fund ( Rs * 0.7 ,87,510/-) and contribution to Employees' State Insurance (Rs.27,124/) received from the employees which were paid belatedly but before the due date for filing the Return of Income u/s. 139.

b) The learned Commissioner of Income Tax (Appeals) -21 has erred in law and on facts of the case in confirming the impugned disallowance in utter disregard to the ratio of the Supreme Court judgment in the case of CIT v / s Vinay Cement Limited ( 213 CTR 0268) and also various judgments of the ITAT and the High Courts as follows: i) Sai Consulting Engineers (P) Limited. v. DCIT Circle 8, Abd. ITA No. 2262/Ahd/2007. ii) Sabari Enterprises 298 ITR 141 (Kar). iii)George Williamson 284 ITR 619 (Gau). iv) Sunil Goel v. ACIT 118 TTJ (Del) 415. v) CIT v. P.M. Electronics Limited 15 DTR 258 (Delhi High Court). vi) CIT v. AIMIL Limited & Ors. (2010) 35 DTR (Del) 68 (Delhi High Court). vii) CIT v. ANZ Information Technology 318 ITR 123 (Karnataka). viii) Additional CIT v. Vestas RRB India Limited (2005) 93 TTJ (Del) 144.

Though the appellant had drawn attention of the learned CIT (A) to the judgments of the Supreme Court and the above-said judgments, leaned CIT (A) has not at all considered the same in the appellant order.

2. The learned Commissioner of Income Tax (Appeals) -21 has erred in law and on facts of the case in confirming the impugned disallowance in utter disregard to the principle of judicial discipline which postulates that judgments on a point of law as laid by the High Court and Tribunal should be followed by the authorities subordinate to that High Court and the Having acknowledged the fact that various Benches of the ITAT, Mumbai are holding that employees' contribution of PF, etc. paid in government account before the due date of filing the Return of Income is allowable as deduction, the learned CIT (A) is in gross error in confirming the disallowance made by the Assessing Officer of the employees' contribution to PF and ESI which were paid before the due date for filing the Return u / s 139.

3. It is therefore, prayed that the disallowance of Rs.8,14,634/- confirmed by the CIT(A) ,may please be deleted.

3.

The only ground in this appeal is with respect to confirmation of dis-allowance of Rs.8,14,634/- being Employees’ contribution to Provident Fund and Employees’ contribution to the State Insurance Fund deposited beyond the due date prescribed under the respective provisions of the law but before the due date of filing of return under section 139 of the Act.

4.

The facts show that the Assessee is a company engaged in the business of trading of equipments and accessories. It filed its return of income on 21.11.2008 showing total income of Rs.92,50,710/-. On scrutiny, the Assessing Office found that in tax audit report employees’ contribution of Rs.7,87,510/- has been paid beyond the due date prescribed under the Provident Fund Act. This is the employees’ contribution, which should have been deposited before the due date prescribed under the respective Provident Fund Act. The Assessee has also

5.

The Assessing Officer rejected the same and made the dis- allowance of Rs.8,14,634/- by passing the assessment order under section 143(3) of the Act dated 7.12.2010.

6.

The Assessee challenged the same before the Ld. CIT (A), who also confirmed the above dis-allowance. Therefore, now the Assessee is in appeal before us.

7.

The Assessee has made an application on 1.7.2013 transferring the above appeal from Mumbai to Ahmedabad on the ground that the Company’s registered office shifted from Mumbai to Ahmedabad. Hon’ble President as per order dated 1.12.2023 rejected such transfers and these appeals were fixed for hearing.

8.

Subsequent to this order, two notices were sent at the address of the Assessee by registered post. Both the notices were returned by postal department stating that the office of the Assessee is closed. The registry does not have any alternative address of the Assessee nor had the Assessee indicated according to Rule 9(A) of the Income Tax Appellate Tribunal Rules, 1963. Therefore, theses appeals are disposed off on the merits of the case as per information available on record.

9.

The Ld. DR was heard. We have carefully considered the contentions raised by the Ld. DR as well as the orders of the lower authorities. We find that the Assessee has collected employees’ contribution under the Provident Fund Act and ESIC

10.

Accordingly, appeal of the Assessee is dismissed.

Order pronounced in the open court on 15.02.2024.

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