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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S.SUNDER SINGH
आदेश / O R D E R
PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the Order dated 30.11.2016 of Commissioner of Income Tax (Appeals)-1, Coimbatore, in Appeal No.28/16-17 for the AY 2013-14 and raised the following grounds:
1. The order of the Honourable Commissioner of Income Tax (Appeals) is opposed to law and contrary to the facts of the case and against equity and principles of natural justice. 2. a) The Honourable Commissioner of Income Tax (Appeals) erred in concluding that the due date for remitting the employee’s contribution is covered by explanation to section 36(1)(va) and not by explanation to section 43B.
ITA No.399/Mds/2017 :- 2 -: b) The Honourable Commissioner of Income tax (Appeals) ought to have followed the decision of the Jurisdictional High Court, where there are conflicting judgments rendered by Jurisdictional and Non-Jurisdictional High Courts.
In view of the above grounds and such other additional grounds as may be adduced at the time of hearing with the leave of the Honourable Income Tax Appellate Tribunal, the appellant prays before the Honourable Income Tax Appellate Tribunal that; a) The Order of the Honorable Commissioner of Income Tax (Appeals) upholding the action of the learned assessing officer denying the claim u/s.43B be set aside, b) Directions be given to the learned Assessing Officer to treat the remittance made by the appellant towards employee’s contribution as paid within the due date and allow the claim u/s.43B, and c) Such other consequential orders may be passed as the Honourable Income Tax Appellate Tribunal may deem fit to render justice.
2.0 All the grounds of the appeal are related to the belated payment of PF & ESI to the tune of Rs.48,79,388/- to the respective fund accounts.
The AO brought the above amount to tax since the amounts were remitted to the respective accounts beyond the due date prescribed under PF & ESI acts. The details of deduction and the date of remittance to the respective accounts are furnished as under:
7.1 On a perusal of the details flied, it is noticed from the Annexure to 3CD report that the assessee company had delayed the remittance of Provident Fund & ESI collected from its employees during the following months:
Name of Actual date of Due Date for S.No. Amount the Fund remittance Remittance 1 PF Rs.4,31,880 21-05-2012 15-05-2012 2 PF Rs.4,63,383 21-06-2012 15-06-2012 3 PF Rs.5,34,327 21-08-2012 15-08-2012 4 PF Rs.5,71,367 21-09-2012 15-09-2012 5 PF Rs.6,02,736 23-11-2012 15-11-2012 6 PF Rs.5,90,893 24-12-2012 15-12-2012 7 PF Rs.6,00,633 31-01-2013 15-01-2013 8 PF Rs.6,04,078 21-03-2013 15-03-2013 9 ESI Rs.51,425 28-06-2012 20-06-2012 10 ESI Rs.54,688 23-07-2012 20-07-2012 11 ESI Rs.57,488 31-08-2012 20-08-2012 12 ESI Rs.63,840 27-09-2012 20-09-2012 13 ESI Rs.64,912 26-11-2012 20-11-2012 14 ESI Rs.62,024 24-12-2012 20-12-2012 15 ESI Rs.63,448 02-02-2013 20-01-2013 16 ESI Rs.62,266 28-03-2013 20-03-2013 Total Rs.48,79,388
ITA No.399/Mds/2017 :- 3 -:
3.0 The Ld.CIT(A) confirmed the addition as under:
As regards the balance amount of Rs.44,47,508/- which was not paid within the due date as prescribed in Section 43B of the Income Tax Act, 1961. The employees’ contribution is covered by Explanation 36(1)(va). The Hon’ble High Court in the case of CIT Vs Gujarat State Transport Corporation (41 taxmann.com 100 (Guj) and court in the case of CIT Vs Merchem Ltd (378 LTR 443) have specifically held that employees contribution not credited in the specified account within due date as provided under relevant statute cannot be allowed. In view of the detailed decisions rendered by the Gujarat High Court and the Kerala High court as well as the CBDT Circular No.22/2015 dated 17.12.2015 wherein the CBDT has clarified that the said Circular does not apply to claim of deduction relating to employee’s contribution to welfare funds which are governed by Section.36(1)(va) of the Income Tax Acts 1961, the amount of Rs.44,47,508/- as detailed by the Assessing Officer in the assessment order stands confirmed in the hands of the appellant.
4.0 We heard the rival submissions and perused the material placed before us.
Though the assessee has remitted the amounts beyond the prescribed due dates of PF & ESI Acts, the assessee has remitted the amounts before filing the return of income and before the due date of filing the return of income. This issue is squarely covered in favour of the assessee by the Hon’ble jurisdictional High Court in the case of CIT v.
Industrial Securities & Intelligence India Pvt. Ltd. (2015) 7 TML 1063 Madras HC.
5.0 Respectfully following the decision of the Hon’ble jurisdictional High Court, we allow the appeal of the assessee and set-aside the orders of the lower authorities.
ITA No.399/Mds/2017 :- 4 -: 6.0 In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on June 08, 2017, at Chennai.