Income Tax Appellate Tribunal - Amritsar
Assistant Commissioner Of Income Tax, ... vs M/S Jammu & Kashmir Tourism Deveolpment ... on 19 March, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
Before Sh. N. S. Saini, Accountant Member
And
Sh. N. K. Choudhry, Judicial Member
ITA No. 644/Asr./2017 : Asstt. Year : 2013-14
ITA No. 645/Asr./2017 : Asstt. Year : 2014-15
Asstt. Commissioner of Income Vs M/s Jammu & Kashmir Tourism
Tax, Circle-3, Srinagar Development Corporation, TRC,
Srinagar
(APPELLANT) (RESPONDENT)
PAN No. AABCJ5754G
Assessee by : Sh. Vasu Gupta, CA
Revenue by : Ms. Shivani Bansal, DR
Date of Hearing :21.02.2019 Date of Pronouncement : 19.03.2019
ORDER
Per N. S. Saini, Accountant Member:
These are the appeal s fil ed by the assessee agai nst the orde r of CIT(A) , J&K, Jammu for t he assessment years 2013-14 and 2014-15 both dated 29.06.2017.
2. The common i ssue involved in both the appeal s i s that the CIT(A) erred i n confi rmi ng the addi ti on of Rs.1,14,77 ,766/- i n assessment year 2013-14 and Rs.1,05,92,304/- in the assessment year 2014-15 on account of deducti on u/s 36(1)(va) of the Income Tax Act , 1961 made by the AO by di sall owi ng empl oyers contri buti on to provi dent fund.
3. The bri ef facts of the case are that the Assessi ng Offi cer observed that the assessee company had deposi ted the 2 ITA Nos. 644 & 645/Asr./2017 J&K Tourism Development Corp.
contri buti on to provi dent fund of Rs.32,81,478/- and contri buti on to ESI of Rs.79,96 ,288/- beyond the due date speci fi ed i n the provi dent fund and ESI Act i n the assessment year 2013-14. Si mil arl y, i n the assessment year 2014-15, the assessee had deposi ted the empl oyees share of provi dent fund of Rs.1,05 ,92,304/- beyond the due date prescri bed unde r the Provi dent Fund Act. Therefore , he di sall owed deducti on for the same.
4. On appeal , the CIT(A) confi rmed the acti on of the AO.
5. Before us, the AR of the assessee reli ed on the deci si on of Amri tsar Bench of the Tri bunal in the case of DCIT Vs M/ s Jamkash Vehi cl eades Pvt. Ltd. i n ITA No. 304/Asr./2010 for the assessment year 2006-07, order dated 25.09.2012 where i t was hel d as under:
"3. The brief facts in grounds No. 1 to 4 of the Revenue are that the assessee has deposited the Employees share of Provident Fund before the due date of filing the Return of Income but after specified date under the Provident Fund Act. The AO a ccordingly added the said amount of Rs.4,96 ,305/- to th e income of the assessee which was deleted by the ld. CIT(A) following the decision of the ITAT, Amritsar Bench in the case of ACIT Range-II, Jalandhar vs. M/s. Proxima Steel Forge P. Ltd. Jalandhar in ITA No.280(Asr)/2008, on the identical issue.
4. We have heard the rival contentions and perused the facts of the case. We concur with the views of the Ld. C IT(A) and the issue before us is identical to the facts of the case of M/s. Proxima Steel Forge P. Ltd. Jalandhar (supra) an d therefore, the Ld. CIT(A) ha s rightly deleted the addition made by the A.O. We find no infirmity in 3 ITA Nos. 644 & 645/Asr./2017 J&K Tourism Development Corp.
his order and the same is upheld. Thus, grounds No. 1 to 4 of the Revenue are dismissed."
6. Further, he reli ed on the deci si on of Amri tsar Bench i n the case of ACIT Vs M/s Proxi ma Steel Forge P. Ltd. i n ITA No. 280/Asr./2008 for the assessmen t year 2004-05, order dated 12.09.2008 where the Tri bunal del eted the di sall owance by observi ng as under:
"4. We have hea rd both the patties and perused the material placed on record. The -contention of the Ld. DR is that the in this case Section 36(1)(va) of the Act is applicable which reads as follows:
"36(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computi ng the income referred t o in section 28-
(i) ..........
(ia) ..........
(ib)............
(ii)............
(iia)..........
(hi)...........
(iv)............
(v).............
(va) any sum received by the assessee from any of his employees to which the provisions of sub-
clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee t o the employee's account in the relevant fund or funds on or bef ore the due date."
The argument of the Ld. DR is mi sconceived in view of the provisions of section 43B of the Act. Section 43B starts in non-obstante clause which reads as follows:
"43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of--4 ITA Nos. 644 & 645/Asr./2017
J&K Tourism Development Corp.
(a) any sum payable by the assesse e by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or]
(b) any sum payable by the asse ssee as an employer by way of contri bution to any provident fund or su perannuation fund or gratuity fund or any other fund for the welfare of employees, [or]
(c) any sum referred to in clause (ii) of sub-
section (1) of section 36.1 [or]
(d) any sum payable by the a ssesse e as interest on any loan or borrowing from an y public financial institution [or a State financial corporation or a State industrial investment corporation], in accordance with the terms and conditions of the agreement governing such loan or borrowing [, or]
(e) any sum payable by the a ssesse e as interest on any [loan or advances] from a scheduled bank in accordance with the term s and conditions of the agreement governing such loan [or advances],] [or]
(f) any sum payable by the assessee as an employer in lieu of any leave at the credit of his employee,] shall be allowed (irrespective of t he previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regula rly employed by him) only in computing the income referred t o in section 28 of that previous year in which such sum is actually paid by him:
Provided that nothing contained in this section shall apply in relation t o any su m [***] which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-secti on (1) of section 139 in respect of the previous year in which the liability to pay such sum wa s incu rred as afore said 5 ITA Nos. 644 & 645/Asr./2017 J&K Tourism Development Corp.
and the evidence of such payment is furnished by the assessee along with such return.
Since second proviso which rea ds as follows;
"Provide d further that no deduction shall, in respect of any sum referred to i n clause (b), be allowed unless such sum has actually been paid in cash or by issue of a cheque or draft or by any other mode oil or before the due date as defined in the Explanation below clause (va) of sub-secti on (1) of section 36, and where su ch payment has been made otherwise than in ca sh, the sum has been realised within fifteen days from the due date."
deleted by Finance Act, 2003 w.e.f . 1.4.2004 and the assessee is required to make payment before furnishing return of income as pe r sub-section (1) of Section 139 of the Income-tax Act. In the pre sent case, the due date for filing the return of income was 31.10.2004 and the payment of E.P.F. was ma de before 31.10.2004 as evidenced from the chart shown in the facts of the ca se. As such, the assessee has made the payment within due date as mention in the proviso to section 43B of the Act and the assessee is entitled for deduction and it cannot be treated as income of the assessee. Hence, the Ld. CIT(A) was justified in allowing the ground of the assessee. We also pla ce reliance on the judgment of Hon'ble Uttarakhan d High Court in the case of CIT Vs. Desli Rakshak Aushdhal aya Ltd. reported in (2008) 218 CIR 7, wherein it has been held as under:
"Held, When Section 43 B wa s incorporated in the I.T. Act, 1961 , and contained the second proviso, the intention of the legislature appears to be that the deduction should be given onl y if the deposits are made within due dates unde r the enactment under which the same we re realised from employees and required t o be deposited so that that employer may not earn interest etc. in his own account and deprive the Government of the 6 ITA Nos. 644 & 645/Asr./2017 J&K Tourism Development Corp.
same. However, later the legisla ture appears to have realized that whenever such amount is deposited under the Government treasury, in any case it cannot be said to be taxable income of the employer/assessee , and has to be deducted. That might be the reason due to which the legislature omitted the second proviso t o section 43B through Finance Act, 2003 , which came i nto force w .e.f. 1st April, 2004.Expressly it is n ot provide d in the Finance Act, 2003, that th e deletion is retrospective. Therefore, the Court has to see whether impliedly the deletion is retrospective or not? The amendment which simply removes the ambiguity, and curative in nature, impliedly has retrospective effect. The dele tion of second proviso to section 43 B is retrospective in nature. That being so, it cannot be said t hat the Tribunal has committed any error of law in deleting the addition of Rs. 2,98,924/- made by the AO, which was the amount deposited by t he assessee on account of provident fund deduction of its employees, in the Government account."
In view of the above, we dismiss the appeal of the Revenue."
7. He further rel ied on the deci si on of Hon'bl e Punjab & Haryana Hi gh Court i n the case of CIT Vs Ma rk Auto Industri es Ltd. (2013) 358 ITR 43 (P&H) where i t was hel d that the assessee w as enti tl ed deducti on i n respect of empl oyers an d empl oyees contri buti on to ESI i f the same was deposi ted before the due date of filing of return u/s 139(1) of the Act.
8. Further, rel i ance was pl aced on the deci si on of Hon'bl e All ahabad Hi gh Court i n the case of Sagun Foundry Pvt. Ltd. Vs CIT (2017) 145 DTR 265 (All .) where i t was hel d that the assessee w oul d be enti tl ed to deducti on for empl oyer and empl oyees contri buti on to provi dent fund i f the same was pai d before the due date of fi li ng of return of i ncome u/s 139(1) of 7 ITA Nos. 644 & 645/Asr./2017 J&K Tourism Development Corp.
the Act. Hence, i t was prayer that foll owi ng the above deci si on, the di sall owance made shoul d be del eted.
9. The DR reli ed on the orders of the l ower authori ti es.
10. We have heard the ri val submi ssi ons and peruse d the materi al s avail abl e on the record. The undi sputed facts of the case are that the Assessi ng Officer di sall owed deducti on for empl oyer and empl oyees contri buti on to provi dent fund of Rs.32,81,478/- and ESI of R s.79 ,96,288/- i n the assessment year 2013-14 and deducti on for empl oyees contri buti on to Provi dent Fund of Rs.1,05,92,30 4/- i n the assessment year 2014-15 for the reason that they were not deposi ted wi th the provi dent fund and ESI authori ti es wi thi n the due date prescri bed under the respecti ve Act.
11. The AR of the assessee submi tted by rel yi ng on the vari ous deci si ons of the Tri bunal and Hi gh Courts quoted above that if the contri buti on to provi dent fund and ESI was deposi ted by the assessee before the due date for fili ng of return of i ncome u/s 139(1) of the Act then no di sall owance for the same was warranted u/s 43B or 36(1)(va) of the Act.
12. The DR has rel i ed on the orde rs of the l ower authori ti es and coul d not show any good reason not to foll ow the above quoted deci si on of the Tri bunal and Hon'bl e P&H Hi gh Court . We, therefore, set asi de the orders of the l ower authori ti es and vacate the di sall owance of de ducti on for empl oyer and empl oyees contri buti on to provident fund of Rs.32,81,478/- and to ESI of Rs.79 ,96,288/- i n the assessment year 2013-14 and empl oyees provi dent fund for Rs.1 ,05,92,304/- in 8 ITA Nos. 644 & 645/Asr./2017 J&K Tourism Development Corp.
assessment year 2014-15 and al l ow the ground of appeal of the assessee.
13. In the resul t, the appeal s of the assessee are al l owed. (Orde r Pronounced i n the Open Court on 19/03/2019) Sd/- Sd/-
(N. K. Choudhry) (N. S. Saini)
Judicial Member Accountant Member
Dated: 19/03/2019
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR