Income Tax Appellate Tribunal - Delhi
Dcit, New Delhi vs M/S. Parasrampuria Synthetics Ltd., ... on 24 August, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "A", NEW DELHI
BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER
AND
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
ITA No.5011/Del/2015
Assessment Year : 2012-13
DCIT, Circle- 19(2), Parasrampuria Synthetics Ltd.,
New Delhi. Vs. C - 36, Hauz Khas, New Delhi.
PAN : AAACP4799E
(Appellant) (Respondent)
Department by : Shri R. C. Danday, Sr.DR
Assessee by : Shri P. K. Jain, FCA
Date of hearing : 21-08-2017
Date of pronouncement : 24-08-2017
ORDER
PER R. K. PANDA, AM :
This appeal filed by the Revenue is directed against the order dated 28.05.2015 passed by the CIT(A)-7, Delhi relating to assessment year 2012-13.
2. The only effective ground raised by the Revenue reads as under :-
"1. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the disallowance of Rs.34,98,876/- made by the AO on account of late deposit of PF and ESI, in not considering the decision of Hon'ble Gujarat High Court in the case of Gujarat Transport Corpn. (2013) which is subsequent to the decision of Delhi High Court order in the case of AIMIL Ltd."
3. Facts of the case, in brief, are that the assessee is a limited company and is engaged in the business of manufacturing of cotton yarn and blended yarn on job work. It filed its return of income on 29.09.2012 declaring total loss of 2 ITA No.5011/Del/2015 Rs.2,22,71,102/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee company has not paid the employees' contribution towards Provident Fund (PF) and ESI within the due date as prescribed under the Act. According to him, as per the provisions of section 36(1)(va) of the I.T. Act, any sum received by the assessee from any of his employees to which provisions of section 2(24)(x) applies will be allowable as a deduction if such sum was credited to the employees' account in relevant fund on or before due date. The 'due date' according to him is defined in Explanation below the section 36(1)(va) of the I.T. Act. Since the assessee has not complied with the above provisions, the Assessing Officer, invoking the provisions of section 36(1)(va) r.w.s. 2(24)(x) disallowed an amount of Rs.34,98,876/-. While doing so he relied upon the decision of Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation reported in (2014) 366 ITR 170 and rejected the decision of Hon'ble Karnataka High Court in the case of Sabari Enterprises and the decision of the Delhi Bench of the Tribunal in the case of Kuber Hinges Pvt. Ltd..
4. In appeal, the ld. CIT(A) following the decision of Hon'ble Delhi High Court in the case of AIMIL India Ltd., where it is held that no disallowance can be made if the payment is made before the due date of filing of the return of income deleted the disallowance made by the Assessing Officer. 3 ITA No.5011/Del/2015
5. Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before us.
6. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. Admittedly, the assessee in the instant case has deposited the employees' contribution to PF and ESI after the due date as prescribed in the relevant Act. However, there is also no dispute to the fact that the assessee has made the deposit prior to the due date of filing of the return. The Co-ordinate Benches of the Tribunal are taking the consistent view that employees' contribution to PF and ESI, if deposited before due date of filing of the return, then no disallowance u/s 36(1)(va) r.w.s. 2(24)(x) can be made. Since the assessee in the instance case has admittedly deposited the employees' contribution to PF and ESI before the due date of filing of the return, therefore, the ld. CIT(A), in our opinion, is fully justified in deleting the addition made by the Assessing Officer. Further, while doing so, he has followed the decision of Hon'ble Delhi High in the case of AIMIL India Ltd. (supra). As per ground of appeal by the Revenue, the decision of Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation (supra) should have been followed. However, when there is a decision of the Jurisdictional High Court available on 4 ITA No.5011/Del/2015 the same issue, the same is binding on the Tribunal. Under these circumstances, we find no infirmity in the order of the CIT(A) in deleting the disallowance made by the Assessing Officer. Accordingly, the same is upheld and the ground raised by the Revenue is dismissed.
7. In the result, the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on this 24th day of August, 2017.
Sd/- Sd/-
(SUDHANSHU SRIVASTAVA) (R. K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 24-08-2017.
Sujeet
Copy of order to: -
1) The Appellant
2) The Respondent
3) The CIT
4) The CIT(A)
5) The DR, I.T.A.T., New Delhi
By Order
//True Copy//
Assistant Registrar
ITAT, New Delhi