SAHAYOG MICROFINANCE LTD vs. ASST CIT 8(1)(2), MUMBAI

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ITA 3720/MUM/2016Status: DisposedITAT Mumbai07 June 2017AY 2012-133 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the facts regarding the exact amount of employee's contribution and the timing of payments were not clear. Therefore, the matter was set aside and restored to the Assessing Officer for a fresh examination in light of the Bombay High Court's decision in Ghatge Patil Transports Ltd.

What were the facts?

The assessee, a non-banking finance company, had its provident fund payments disallowed by the Assessing Officer under Section 43B for being paid after the due date. The assessee contended that the amount disallowed was partly employer's contribution and that both contributions were paid before the due date for filing the return of income.

What were the issues?

Whether disallowance of provident fund payments under Section 43B is justified when the payments, including employer's contribution, are made before the due date of filing the return of income.

Which sections of the Income-tax Act were involved?

Section 43B

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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)

For Appellant: Shri Alok Saksena
For Respondent: Shri Rakesh Ranjan
Hearing: 7.6.2017Pronounced: 7.6.2017

The appeal filed by the assessee is directed against the order passed by the learned CIT(A), Valsad and it relates to A.Y. 2012-13.

2.

The assessee is contesting disallowance of provident fund payments by invoking provisions of section 43B of the Act.

3.

I heard the parties and perused the record. The assessee is non-banking finance company. The Assessing Officer noticed that the employees contribution to provident fund amounting to ` 3,63,887/- was paid by the assessee after the due date prescribed under the Provident Fund Act and accordingly he disallowed the same by invoking provisions of section 43B of the Act. The learned CIT(A) confirmed the same and hence the assessee has filed this appeal before us.

4.

Learned AR submitted that the Assessing Officer has erroneously taken the amount of employees contribution of ` 3,63,887/-. He submitted that the employees contribution was ` 1,88,193/- and remaining amount of `

2 M/s. Sahayog Microfinance Ltd.

1,75,694/- was employers contribution. He submitted that the assessee has paid both amounts before the due date of filing the return of income and hence they are allowable as deduction as per the decision rendered by Hon'ble Bombay High Court in the case of Ghatge Patil Transports Ltd. (368 ITR 749).

5.

I heard learned Departmental Representative and perused the record. I noticed that the details of payment of provident fund amount of ` 3,63,887/- is not available on record. Further assessee contends that the employees contribution was actually ` 1,88,193/- and remaining amount represents employers contribution. Since the facts are not clear on this issue, I am of the view that this issue requires fresh examination at the end of the Assessing Officer in the light of the decision rendered by Hon'ble Bombay High Court in the case of Ghatge Patil Transports Ltd. (supra). Accordingly, I set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the Assessing Officer with the direction to examine this issue afresh by following the decision rendered by Hon'ble Bombay High Court in the case of Ghatge Patil Transports Ltd.(supra). After providing adequate opportunity of being heard to the assessee, the Assessing Officer may take appropriate decision in accordance with law.

6.

In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order has been pronounced in the Court on 7.6.2017.

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