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Before: SHRI MAHAVIR PRASAD & SHRI AMARJIT SINGH
आदेश / O R D E R
PER MAHAVIR PRASAD, JUDICIAL MEMBER : These are two appeals by the assessee against the order of the Commissioner of Income Tax(Appeals)-2, Vadodara, dated 26/07/2016 for the Assessment Years (AYs) 2011-12 and 2012-13.
Since in both appeals issues are common only figures and assessment years are different therefore for the sake of convenience, we would like to dispose of both the appeals by way of a common order. In these appeals following Grounds have been taken by the assessee:
ITA Nos.2764 & 2765/Ahd/2016 Utsav Food Products vs. ACIT Asst.Years – 2011-12 & 2012-13 - 2 - 2.1 In ITA No.2764/Ahd/2016 for Asst. Year 2011-12:
The rectification order passed u/s.154 of IT Act by the assessing officer and partly confirmed by the first appellate authority is bad in law and deserves to be quashed. 2. The assessing officer as well as first appellate authority has erred in law and on facts in making disallowances & confirming respectively contribution to employee's provident fund amounting to Rs.3,75,431/-. The same deserves to be deleted. 3. The appellant craves to reserve his right to add, alter, amend, or delete any ground of appeal during the course of hearing. 2.2 In ITA No.2765/Ahd/2016 for Asst. Year 2012-13:
The rectification order passed u/s.154 of IT Act by the assessing officer and partly confirmed by the first appellate authority is bad in law and deserves to be quashed. 2. The assessing officer as well as first appellate authority has erred in law and on facts in making disallowances & confirming respectively contribution to employee's provident fund amounting to Rs.4,30,703/-. The same deserves to be deleted. 3. The appellant craves to reserve his right to add, alter, amend, or delete any ground of appeal during the course of hearing.
The brief facts of the case are that the assessee firm filed its return of income on 28/09/2011 showing total income at Rs.30,46,690/-. Assessment u/s.143(3) was completed on 12/03/2014 declaring total income at Rs.30,78,340/-. On perusal of the assessment record particularly Schedule-M to Column 16(b) of Form 3CD, AO noticed that assessee firm deposited Provident Fund to the tune of Rs.8,01,230/- beyond the prescribed limit. In view of the provisions of section 2(24)(x) r.w.s. 36(l)(va), the Provident Fund was not deposited in the respective account within the time limit prescribed under Provident Fund Act, the same was required to be included in the total income of the assessee.
ITA Nos.2764 & 2765/Ahd/2016 Utsav Food Products vs. ACIT Asst.Years – 2011-12 & 2012-13 - 3 - Since the assessee did not include the above mentioned amount of Provident Fund paid belatedly in the total income, the AO issued notice u/s.154 dated 23/06/2015 for proposed rectification. In response to the notice u/s.154, the assessee submitted before the AO that contribution to the Provident Fund was deposited before the due date of filing of return of income and hence there was no requirement for rectification u/s.154 in view of the judgments of various courts.
3.1 After considering the submission of the assessee and also reproducing the provisions of section 2(24)(x) and 36(l)(va), the AO was of the view that the due date for payment of employees contribution to the Provident Fund Account is the date prescribed under the Provident Fund Act, which is 20th day of the following month. Accordingly, the AO passed rectification order after making an addition of Rs.8,01,230/- on account of employees contribution to the Provident Fund, which was not deposited in the respective account within the time prescribed under the Provident Fund Act. Aggrieved the assessee filed the appeal and same was partly allowed by the ld. CIT(A). Now appeal is before us.
We have gone through the relevant record and impugned order. In this case, appellant has challenged rectification order passed u/s.154 by the AO and confirmed by the ld. CIT(A) and it is fact that explanation of section 36(1)(va) states that “due date” means that the date by which assessee is required as an employer to credit the employees' contribution to the employees' account in the relevant fund under any Act, Rule,
ITA Nos.2764 & 2765/Ahd/2016 Utsav Food Products vs. ACIT Asst.Years – 2011-12 & 2012-13 - 4 - order or notification issued thereunder. If any sum was received by the employer as employees' contribution to the Provident Fund, the same is deemed to be the income u/s.2(24)(x). This matter has been dealt by the Hon'ble Jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation relevant para of the same is reproduced here as under: "Section 43B, read with section 36(1)(va) of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed on actual payment (Employee contribution) - Whether where an employer has not credited sum received by it as employees' contribution to employees' account in relevant fund on or before due date as prescribed in Explanation to section 36(1)(va), assesses shall not be entitled to deduction of such amount though he deposits same before due date prescribed under section 43B i.e., prior to filing of return under section 139(1) - Held, yes - Assessee State transport corporation collected a sum being provident fund contribution from its employees - However, it had deposited lesser sum in provident fund account - Assessing Officer disallowed same under section 43B - However, Commissioner (Appeals) deleted disallowance on ground that employee, contribution was deposited before filing return - Whether since assesses had no deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1)(va), disallowance made by Assessing Officer was just and proper - Held, yes [para 8] [In favour of revenue]"
In view of the above judgment we confirm the impugned order and dismiss the appeal of the assessee.
So far ITA No.2765/Ahd/2016 for Asst. Year 2012-13 is concerned, finding of above said matter will apply. Therefore, this appeal is also dismissed.
ITA Nos.2764 & 2765/Ahd/2016 Utsav Food Products vs. ACIT Asst.Years – 2011-12 & 2012-13 - 5 - 7. In the result, both the appeals filed by the assessee are dismissed.
This Order pronounced in Open Court on 18/12/2017
Sd/- Sd/- vejthr flag vejthr flag vejthr flag महावीर �साद vejthr flag (लेखा सद�य) (�या�यक सद�य) ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 18/12/2017 Priti Yadav, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-2, Vadodara. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad