Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH AHMEDABAD
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH AHMEDABAD
BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No. 2313/Ahd/2015 With CO No. 189/Ahd/2015 (Assessment Year: 2012-13)
ACIT, Mehsana Circle, Mehsana Appellant Vs. M/s. Ammann Apollo India Pvt. Ltd., Plot No.2, At-Ditasan, Post-Jagudan, Mehsana, Pin 382710 Respondent / Cross Objector
PAN: AACCA0194N
राज�व क� ओर से/By Revenue : Shri Prasoon Kabra, Sr. D.R. आवेदक क� ओर से/By Assessee : None सुनवाई क� तार�ख/Date of Hearing : 28.09.2017 घोषणा क� तार�ख/Date of Pronouncement : 29.09.2017
ORDER PER S. S. GODARA, JUDICIAL MEMBER
This Revenue’s appeal and assessee’s cross objection for assessment year 2012-13 arise against the CIT(A), Gandhinagar, Ahmedabad’s order dated 29.05.2015 in case no. CIT(A)/GNR/287/2014-15, reversing Assessing Officer’s action disallowing /adding late payment of employees’ contribution to ESI/PF and the one u/s.14A r.w. Rule 8D amounting to Rs.6,08,838/- and Rs.30,00,186/-;
ITA No. 2313/Ahd/15 & CO No. 189/Ahd/15 (ACIT vs. M/s. Ammann Apollo India Pvt. Ltd.) A.Y. 2012-13 - 2 -
respectively; in proceedings u/s. 143(3) of the Income Tax Act, 1961; in short “the Act”. Case called twice. None appears at assessee’s behest. Case file records indicate that the Registry has already sent an RPAD notice to the assessee dated 08.09.2017 for today’s hearing. We therefore proceed ex parte against the assessee.
We advert to Revenue’s former substantive ground seeking to revive former disallowance of Rs.6,08,838/- pertaining to assessee’s late payment of employees’ contribution to PF/ESI. Case file sufficiently records that the assessee had made the impugned payments on 18.08.2011 and 17.10.2011 much after the due dates falling on 15.08.2011 and 15.10.2011; respectively. This made the Assessing Officer to invoke the impugned disallowance. The CIT(A) on the other hand holds that such a disallowance cannot be made in case it is found that the impugned payment is made in grace period as under:
“5.3 I have considered the facts of the case, assessment order, submission made and case laws relied upon. AO has made the disallowance of Rs.6,08,138/- towards contribution of employees PF contending that the Hon'ble Jurisdictional High Court in CIT v. Gujarat State Road Transport Corp, 223 Taxman 398 has clearly stated contribution towards P.P. payable by the employees shall be paid before the stipulated dates as per P.P. rules and the same cannot be allowable as expenditure if the same are deposited before the due date of filing of return. Further, it is also contended by the AO that in the audit report the due date mentioned is 15th of the next month by the auditor. Accordingly, the due date for payment in respect of deposit of employee's contribution to PF is to be taken as 15th of the next month and concluded that appellant had failed to deposit employee's PF contribution of an amount of Rs.608838/- within the time and accordingly disallowed the same under 36(1)(v)(a) of the Act. On the other hand, appellant has contended that no disallowance is warranted in the case of the appellant as the employees PF deducted were deposited into the government account within the grace period of 5 days i.e. before 15th of the subsequent month. With regard to the Gujarat High Court decision in the case of Gujarat State Road Transport Corpn (Supra) relied upon by the AO it is contended that it is not relevant in the case of the appellant as appellant had deposited the Employees' PF contribution within the grace period whereas in the case relied upon by the AO the contribution is made to the government account beyond the grace period allowed.
ITA No. 2313/Ahd/15 & CO No. 189/Ahd/15 (ACIT vs. M/s. Ammann Apollo India Pvt. Ltd.) A.Y. 2012-13 - 3 -
In the entirety of the facts of the circumstances of the case, it is seen that in the case of the appellant, all the payments in respect of employees' contribution have been made on or before the due date as per the relevant Act within the grace period. In the case of Indo Swiss Anti Shock Ltd, Hon'ble Ahmedabad Tribunal has held that payment of employees' contribution within the grace period is allowable and has been treated as paid on or before the due date as per explanation to section 36(1)(va) of the Act. Similarly, the in the case of Sony India (P) Ltd reported at 315 UR 150, Hon'ble Delhi Tribunal relying on the decision taken by the Hon'ble Madras High Court in the case of Ganapathy Mills Co. Ltd (2000) 243 ITR 879, had deleted the addition made by the AO holding that the 'due date' for payment of PF contribution as defined in Explanation to section 36(1)(va) gets extended by the grace period of 5 days allowed under the relevant statute. From the discussion made above, it is clear that for the purpose of computing the due date u/s 36(1)(va), the grace period of 5 days is to be added to the due date. In the case of the appellant, the employees' contribution had been deposited to the government account within the grace period allowed as per the relevant PF Act and therefore, the contention of the appellant is allowable. Following the judicial pronouncements as above, the disallowance and addition made by the AO on account of Employees' PF of Rs.6,08,138/- is held not justified and is hereby directed to be deleted. Relevant ground of appeal are allowed.”
Learned Departmental Representative quotes hon’ble jurisdictional high court’s decision in Gujarat State Road Transport Corporation case (supra) restoring an identical disallowance. He however fails to dispute the latter lower appellate finding that the assessee had made the impugned payment within the grace period as prescribed in the relevant statute. We therefore find no merit in this instant former substantive ground.
The Revenue’s latter substantive ground seeks to restore Assessing Officer’s action disallowing an amount of Rs.30,00,186/- u/s.14A r.w. Rule 8D of the Income Tax Rules. We notice at the outset that the assessee has not derived any exempt income in the impugned assessment year. This makes the CIT(A) to delete the impugned disallowance after quoting hon’ble jurisdictional high court’s decision in CIT vs. Corrtech Energy P. Ltd, reported in [2015] 372 ITR 97 (Guj.). This legal position has not been rebutted at Revenue’s behest during the course of hearing. We therefore affirm the CIT(A)’s findings qua this latter issue as well.
ITA No. 2313/Ahd/15 & CO No. 189/Ahd/15 (ACIT vs. M/s. Ammann Apollo India Pvt. Ltd.) A.Y. 2012-13 - 4 -
The assessee’s cross objection CO No.189/Ahd/2015 supporting the CIT(A)’s order on both the above issues is rendered academic in view of our findings in Revenue’s appeal.
The Revenue’s appeal ITA No. 2313/Ahd/2015 is dismissed. Assessee’s CO No. 189/Ahd/2015 is dismissed as rendered infructuous.
[Pronounced in the open Court on this the 29th day of September, 2017.]
Sd/- Sd/- (MANISH BORAD) (S. S. GODARA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad: Dated 29/09/2017