Income Tax Appellate Tribunal - Mumbai
Nesco Ltd , vs Assessee on 13 April, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" BENCH: MUMBAI
BEFORE SHRI P.M. JAGTAP, ACCONTANT MEMBER
AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER
MA No.230/Mum/2011
Arising out of ITA no.5515/MuM/2005 for A.Y. 2002-03
M/s. Nesco Ltd.,
Nesco Estate, W.E. Highway,
Goregaon (East),
Mumbai -400 063 .......... Applicant
Vs
Dy. Commissioner of Income-tax 9(2),
Aayakar Bhavan, M.K. Road,
Mumbai -400 020 ........ Respondent
PAN: AAACN 1222 E
Applicant by: Shri Haresh P. Shah
Respondent by: Shri D.S. Sunder Singh
Date of hearing: 13.04.2012
Date of Pronouncement: 27.04.2012
ORDER
PER R.S. PADVEKAR, JM
This Misc. application is filed by the assessee u/s.254(2) of the Act with a prayer to rectify the order passed in ITA 5515/Mum/2005 dated 10.12.2008 for the A.Y. 2002-03.
2. One of the issues in the appeal filed by the assessee was the disallowance on account of employer's and employee's contribution to PF & ESIC which was disallowed by the A.O. by invoking sec.43B. The Tribunal has observed that the assessee has paid the amount due on account of both the employer's and employee's contribution to PF & ESIC during the year itself totalling to ` 23,88,862/- and in which sum of ` 71,987/- in respect of employee's contribution to PF was paid before the due date of filing of the return of income. It is further observed that the A.O. disallowed the claim of the assessee holding 2 MA 230/Mum/2011 M/s. Nesco Ltd.
that the payments were made after the due dates. Tribunal also considered the decision of Hon'ble High Court of Bombay in the case of CIT vs. Pamvi Tissues Ltd. 215 CTR (Bom) 150 as well as the decision in the case of CIT vs. Godavari (Mannar) Sahakari Sakhar Karkhana Ltd. 298 ITR 149 (Bom) and held that employee's contributions to PF & pension funds have not paid before the due date under the respective Act are not allowable expenditure u/s.43B of the Act. In respect of the employee's share of contribution to PF & ESIC, the Tribunal followed the decision of Hon'ble High Court of Madras in the case of Palanpa Transports vs. CIT 238 ITR 493 and held that assessee has paid the employee's share of contribution after grace period allowed under the respective Act and there is no merit in the claim of the assessee. In the application the assessee has pleaded that after the decision of the Tribunal the Hon'ble Supreme Court in the case of CIT vs. Alom Extrusion Ltd. 319 ITR 306 has held that amendment to sec.43B by the deletion of the second proviso with the retrospective effect and has specifically overruled the decisions of Hon'ble High Court of Bombay. It is pleaded that there is a mistake apparent in the order of the Tribunal and the same may be rectified.
3. We have heard the Counsels and perused the records. The facts are narrated hereinabove. In the case of Alom Extrusion Ltd. (supra) the Hon'ble Supreme Court has held that amendment to sec.43B is retrospective in operation. Moreover, the decision in the case of Alom Extrusion Ltd. (supra) has been followed in the subsequent decision of the Tribunal in the case of M/s. Pinkpen P. Ltd. Vs. CIT in ITA no.6847/Mum/2008 dated 28.8.2010. The operative part of the Tribunal's order on this issue reads as under:-
"10. The next issue is disallowance of Employees Contribution to PF and ESIC of ` 43,721/-. The short controversy before us is in respect of the payment of the Employees Contribution to P.F./E.S.I.C beyond the Grace period which was relating to the 3 MA 230/Mum/2011 M/s. Nesco Ltd.
month of February. The Ld. Counsel relied on the decision of the Hon'ble Supreme Court in the case of CIT v/s. Alom Extrusion Ltd., 319 ITR 306. The A.O. made the disallowance u/s. 36(1)(va) as he was of the opinion that the Employees Contribution to PF/ESIC even if made before filing of the return of income is not covered u/s. 43B of the I.T. Act. In the case of Alom Extrusion Ltd.(supra), the issue before their Lordship was whether the omission of second proviso to Section 43B of the I.T. Act 1961 by the Finance Act 2003 operated w.e.f. 1.2.2004 or whether it operated retrospectively w.e.f. 1.4.1988. In the said case also, the issue was concerning the contribution payable by the employer to the P.F/Superannuation Fund or any other Fund of welfare of the employees. In our opinion, now the issue stands covered in favour of the Assessee by the decision of Hon'ble Supreme Court in the case of Alom Extrusion Ltd. (supra). We, therefore, allow the ground taken by the assessee and delete the addition."
4. We, accordingly rectify the order of the Tribunal in ITA No.5515/Mum/2005 dated 10.12.2008 and hold that if the assessee has paid the employer's as well as employee's contribution on or before the due date of filing of return of income then the same should be allowed. The A.O. is directed to verify from the details available on record and accordingly allow the claim. Accordingly, the assessee's appeal is allowed.
5. In the result, the assessee's misc. application is allowed pro- tanto.
Order pronounced in the open court on 27th April, 2012.
Sd/- Sd/-
(P.M. JAGTAP) (R.S. PADVEKAR)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Date: 27th April, 2012
4 MA 230/Mum/2011
M/s. Nesco Ltd.
Copy to:-
1) The Appellant.
2) The Respondent.
3) The CIT (A)-13, Mumbai,
4) The CIT-7, Mumbai.
5) The D.R. "D" Bench, Mumbai.
By Order
/ / True Copy / /
Asstt. Registrar
I.T.A.T., Mumbai
*Chavan