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Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA
Before: Shri N.V.Vasusdevan & Shri Waseem Ahmed
आदेश /O R D E R
PER Waseem Ahmed, Accountant Member:-
This appeal by the Revenue is against the order of Commissioner of Income Tax (Appeals)-XVI, Kolkata dated 08.03.2013. Assessment was framed by ACIT, Circle-29, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 16.12.2010 for assessment year 2008-09 and Revenue has raised following grounds:- “
1. Whether the benefit of delayed payment of contribution of welfare fund i.e. PF and ESI as per amended provisions to Section 43B is limited to the employers’ contribution part only or is also available to employees’ contribution.
2. Whether the Ld. CIT(A) was justified in law as well as on facts in deleting the disallowance of Rs.35,22,348/- made by the AO on account of delayed payment of employees’ contribution to PF and ESI by applying amended provisions of Section 43B wrongly.”
ITO Wd-29(4) Kol. v. Smt. Kiran Dhelia Page 2 2. At the time of hearing none appeared on behalf of assessee though notice of hearing was served upon the assessee. Hence, we decide to hear this appeal without appearing of ld. Counsel of the assessee. So we proceed to hear this appeal after hearing Smt. Ranu Biswas, Ld. Departmental Representative appearing on behalf of assessee.
Common issues raised by Revenue is that Ld. CIT(A) erred in deleting the disallowance of ₹35,22,348/- towards the contribution of PF and ESI as per amended Sec. 43B of the Act. 3.1 Facts of the case are that assessee is an individual engaged in providing services to bank. During the course of assessment proceedings Assessing Officer observed that there was a delay in depositing the contributions of employees PF fund with PF authorities. Therefore AO has disallowed the same relying on the provisions contained u/s 43B of the Act.
Aggrieved, assessee preferred an appeal before Ld. CIT(A) who deleted the addition made by AO by observing as under:- “I carefully consider the assessment order as well as the submissions of the appellant. I found that there is substance in the submission of the appellant that as per the amendment of provisions of section 43B, the payment made by the employee towards contribution to PF & ESI, gratuity, superannuation and other welfare funds are allowed if the same are paid before the due date of filing of the return of income u/s. 139(1) of the IT Act. In the instance case, all the payments of employee’s contribution fund to PF, ESI total Rs.35,22,348/- were paid before the due date specified u/s. 139(1) of the IT Act. I relied upon the case law cited by the appellant and amended law I am of the view that the action of the AO is not as per law to disallowing Rs.35,22,348/-. Therefore, I delete the addition made by the AO of Rs.35,22,348/-. This ground is allowed.”
Being aggrieved by this order of Ld. CIT(A) Revenue is in appeal before us.
We have heard Ld. DR and perused the materials available on record. We find that the AO has made the addition of the amount of the employee contribution as there was a small delay in payment to PF authorities. However from the assessment order we find that all the payment of employees contribution were made before the due date of filing of Income Tax Return as specified u/s.139(1) of the Act. Now, this issue stands covered in favour of ITO Wd-29(4) Kol. v. Smt. Kiran Dhelia Page 3 assessee and against the Revenue by the decision of Hon’ble jurisdictional High Court in the case of CIT v. M/s Vijay Shree Limited vide ITAT No.245 of 2011 in GA No.2607 of 2011 dated 7th September, 2011, wherein it has been held as under:- “After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec. 43(B) of the income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1st April, 1988. Such being the position, the deletion of the amount paid by the Employees’ contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act. We, therefore, find that no substantial question of law is involved in this appeal and consequently, we dismiss this appeal.”