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TMI Blog2016 (7) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.03.2003, i.e., last date of the previous year of the assessment year in question and till that date it does not appear that there was any concluded contract between the assessee and the LIC for subscribing to the said scheme nor anything has been brought on the record to show that the contribution had been made for the previous year relevant to the assessment year in question. In the said circumstances, it is not open to learned counsel for the appellant to even raise and argue such a question in view of the clear provisions of Section 40A (7) of the Act. The appellant was certainly not entitled to deduction of the said provision made for gratuity and see no reason to interfere with the finding that has been recorded concurrently by all the three authorities. Thus, in the light of the aforesaid discussions, the first substantial question of law is decided in the negative, in favour of the assessee and against the revenue. Second substantial question of law that whether the Tribunal was correct in holding that the assessee was not entitled to deduction of gratuity in view of Section 40A is answered in the affirmative against the assessee and in favour of the revenue. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05 but the assessee failed to furnish any reply till the passing of the order. Other disallowance made by the assessing officer is not relevant for the purpose of the present appeal. Aggrieved by the aforesaid order dated 25.03.2006 of the Deputy Commissioner of Income-tax Circle-II, the assessing officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals)-II, Patna. The appeal was allowed so far as the delayed payment of employer s contribution to Employees Provident Fund to the extent of ₹ 8,32,507/- was concerned under Section 43B of the Act and the said addition was ordered to be deleted. So far as the delayed payment of ₹ 8,32,507/- of the employees contribution to E.P.F. is concerned, the addition of the same was confirmed holding that no relief is allowable on the ground of Section 43B of the Act as the omission of second proviso to the said Section with effect from 01.04.2004 does not apply to delayed payment of employees contribution to any Provident Fund or any fund mentioned in sub-section (2) of Section 24 of the Act. Similarly, accepting the reasoning of the Assessing Officer the addition of ₹ 7,64,335/- towards pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lies upon a decision of the Supreme Court in the case of Commissioner of Income-tax vs. Alom Extrusions Ltd.: (2009) 319 ITR 306 (SC) = 2010 (1) SCC 489, following which the Bombay High Court in the case of Commissioner of Income-tax vs. Ghatge Patil Transports Ltd.: (2014) 368 ITR 749 (Bom) and Punjab and Haryana High Court in the case of Commissioner of Income Tax vs. Hemla Embroidery Mills (P) Ltd.: (2014) 366 ITR 167 (P H) have held that both the employees and employer s contributions are covered under the amendment to Section 43B of the Income Tax Act and the Alom Extrusions judgment of the Supreme Court and therefore the Tribunal was right in holding that the payments thereof were subject to benefits of Section 43B of the Act. Learned counsel for the Income-tax Department, on the other hand submits that the Tribunal has rightly made a distinction in the matter with regard to delay in payment of employees contribution to the Provident Fund and delayed payment of employer s contribution to Provident Fund. It is submitted that the appeal of the Department has been rejected by the Tribunal making a distinction between the two provisions which appear to be justified. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as to whether a distinction can be made between the employees contribution and employer s contribution with regard to applicability of Section 43B of the Act was squarely raised before the Bombay High Court in Ghatge Patil Transports case (supra) and before the Punjab and Haryana High Court in Hemla Embroidery Mills case (supra) and both the High Courts have answered the same holding that both the employees and employer s contributions are covered by the amendment of Section 43B of the Act after considering Alom Extrusions case (supra). Although technical reading of Section 43B and the provisions of sub-section (2) of Section 24 (x) read with Section 36 (1) (va) of the Act creates the impression that the employees contribution would continue to be treated differently under a different head of deduction, as the head of deduction is separate under Section 43B and Section 36 of the Act but on a broader reading of the amendments made to Section 43B repeatedly and the intention of Parliament, there appears to be sufficient justification for taking the view that the employees and the employer s contribution ought to be treated in the same manner. In Alom Extrusions case (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 585 (SC) disallowing the provision for gratuity made by the appellant. It is submitted that a categorical finding has been recorded by the Tribunal that it is not the case of the assessee that the assessee has made provision for payment by way of any contribution towards approved gratuity fund or on the basis of any provision for gratuity that has become payable during the financial year under consideration. Thus, according to learned counsel, the provision as contained in Section 40A (7) of the Act would clearly apply in the present matter and the Tribunal as also the previous authorities have correctly decided the issue concurrently against the assessee. Section 40A (7) (a) (b) of the Act is in the following terms:- 40A (7) (a) No deduction shall be allowed in respect of any provision (whether called as such or by any other name) made by the assessee for the payment of gratuity to his employees on their retirement or on termination of their employment, for any reason. (b) Nothing in clause (a) shall apply in relation to any provision made by the assessee for the purpose of payment of a sum by way of any contribution towards an approved gratuity fund, or for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea has been taken by the assessee that the provision has been made for the purpose of payment to an approved gratuity fund, i.e., the LIC Group Gratuity Scheme. It is apparent that the appellant is now trying to raise, at a belated sage, a pure question of fact which has not been raised by it before any of the three lower authorities. I am afraid that such a pure question of fact cannot be permitted to be raised by the assessee at this belated stage. Along with the memorandum of appeal the assessee has brought on record two letters dated 27.08.2002 and 31.03.2003 of the Life Insurance of India which merely refers to LIC Group Gratuity Scheme for the employees of the assessee and the amounts that would become payable, if the assessee subscribes to the said scheme. The date of the second letter is 31.03.2003, i.e., last date of the previous year of the assessment year in question and till that date it does not appear that there was any concluded contract between the assessee and the LIC for subscribing to the said scheme nor anything has been brought on the record to show that the contribution had been made for the previous year relevant to the assessment year in question. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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