Income Tax Appellate Tribunal - Delhi
Dcit, New Delhi vs M/S. Peb Steel Lloyd (India) Ltd., New ... on 30 November, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'D' : NEW DELHI)
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
and
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No.5610/Del./2015
(ASSESSMENT YEAR : 2012-13)
DCIT, Circle 19 (2), vs. M/s. PEB Steel Lloyd (India) Ltd.,
New Delhi. 2, Punjstar Premises,
Kalkaji Indl. Area, Kalkaji,
New Delhi - 110 019.
(PAN : AAECP0564F)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri K.V.S.R. Krishna, CA
REVENUE BY : Shri Naina Soin Kapil, Senior DR
Date of Hearing : 29.11.2018
Date of Order : 30.11.2018
ORDER
PER KULDIP SINGH, JUDICIAL MEMBER :
The appellant, DCIT, Circle 19 (2), New Delhi (hereinafter referred to as 'the Revenue') by filing the present appeal, sought to set aside the impugned order dated 27.07.2015 passed by Ld. CIT (Appeals)-7, New Delhi qua the Assessment Year 2012-13 on the following grounds inter alia that:-
"On the facts and in the circumstances of the case, the ld. CIT (A) has erred in deleting the addition made by Assessing Officer of Rs.47,78,762/- of PF contribution 2 ITA No.5610/Del./2015 and Rs.6,76,061/- of ESIC totaling to Rs.54,54,823/- is not allowable as deduction u/s 36(1)(va) and is assessee's income as per provisions of section 2(24)(x) of the Income-tax Act, 1961 by ignoring the Explanation given to section 36(1)(va) of the Income- tax Act, 1961."
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessing Officer made addition of Rs.54,54,823/- (Rs.47,78,762/- of PF contribution and Rs.6,76,061/- of ESIC) by making disallowance on account of late deposit of PF and ESI contribution u/s 36(1)(va) read with section 2(24)(x) of the Income-tax Act, 1961 (for short 'the Act').
3. The assessee carried the matter by way of an appeal before the ld. CIT (A) who has deleted the addition by allowing the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.
4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
5. Undisputedly, the assessee company has not deposited employees contribution towards provident fund and ESI within due date but before filing of the income-tax return along with interest 3 ITA No.5610/Del./2015 and penalty for delayed payments, which is tabulated as under for ready perusal :-
March Employees contribution to Due date of Actual date provident fund deposit of deposit Amount due Amount due & deposited and deposited April 11 372280 31543 15 Mar 11 24 Mar 11 June 11 389568 22786 15 June 11 16 June 11 May 11 421356 30712 15 Jul 11 25 Jun 11 Jul 11 400326 34263 15 Aug 11 24 Oct 11 Aug 11 405709 36007 15 Sept 11 24 Oct 11 Sept 11 393551 39340 15 Oct 11 24 Oct 11 Oct 11 404074 33340 15 Nov 11 18 Nov 11 Nov 11 396285 35581 15 Dec 11 4 Jan 11 Dec 11 397642 34260 15 Jan 12 17 Jan 12 Jan 12 416350 32569 15 Feb 12 15 Feb 12 Feb 12 424317 33860 15 March 12 14 May 12 Mar 12 408905 33057 15 April 12 14 May 12 4830363 397318 March Employees contribution to Actual date of Employees State Insurance deposit Amount Due date of deposited deposit April 11 68810 21 Mar 11 24 May 11 June 11 62017 21 June 11 24 Jun 11 May 11 71804 21 Jul 11 24 Jun 11 Jul 11 66613 21 Aug 11 24 Nov 11 Aug 11 69245 21 Sept 11 24 Nov 11 Sept 11 69115 21 Oct 11 24 Nov 11 Oct 11 67662 21 Nov 11 24 Nov 11 Nov 11 67000 21 Dec 11 4 Jan 12 Dec 11 66571 21 Jan 12 19 Jan 12 Jan 12 67976 21 Feb 12 18 Feb 12 Feb 12 67143 21 March 12 18 May 12 Mar 12 66652 21 April 12 21 May 12 810608
6. It is settled principle of law that amount deposited by the assessee on account of contribution towards PF & ESI would qualify for deduction even though paid after the due dates 4 ITA No.5610/Del./2015 prescribed under the Provident Fund and ESI Act but before filing of the income-tax return. In the instant case, assessee has admittedly deposited the amount of provident fund and ESI before filing the return qua year under assessment as tabulated in the preceding para.
7. Reliance in this regard may be placed on decision rendered by Hon'ble Supreme Court in CIT vs. Vinay Cement Ltd. - (2009) 313 ITR (ST.) 1 (SC) wherein it is held that no disallowance could be made if the payments are made before the due date of filing of the return.
8. Identical issue has also been decided by the Hon'ble Delhi High Court in case cited as CIT vs. AIMIL Ltd. (2010) 321 ITR 508 (Delhi) wherein the Hon'ble High Court after discussing the provisions contained u/s 36 (1)(va) read with provisions contained u/s 2(24)(x), 43B proviso (i) & (ii) held that "If the employees' contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Fund Act as well as the ESI Act. Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. In so far as the Income-tax Act is concerned, the assessee can get the 5 ITA No.5610/Del./2015 benefit if the actual payment is made before the return is filed, as per the principle laid down by the Supreme Court in Vinay Cement [2009] 313ITR (St.) 1."
9. In view of what has been discussed above and following the law laid down by Hon'ble Supreme Court in CIT vs. Vinay Cement Ltd. (supra) and Hon'ble Delhi High Court in CIT vs. AIMIL Ltd. (supra) and in view of the fact that the entire payments on account of employees' contribution of PF & ESI has been deposited by the assessee well before the due date of filing the return, we are of the considered view that the ld. CIT (A) has rightly deleted the addition made by the AO on account of disallowance of Rs.54,54,823/- towards PF and ESI contribution. So, finding no illegality or perversity in the finding returned by the ld. CIT (A), the appeal filed by the Revenue is hereby dismissed. Order pronounced in open court on this 30th day of November, 2018.
Sd/- sd/-
(N.K. BILLAIYA) (KULDIP SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated the 30th day of November, 2018
TS
6 ITA No.5610/Del./2015
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A)-7, New Delhi.
5.CIT(ITAT), New Delhi.
AR, ITAT
NEW DELHI.