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TMI Blog2020 (11) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER Appellant by : Sh. Naman Desai, CA Respondent by : Sh. M. Baranwal, Sr. DR ORDER Assesee has filed the present appeal against the impugned order dated 24.05.2017 passed by the Ld. CIT(A)-35, New Delhi relating to assessment year 2014-15 on the following grounds:- 1(a) Ld. DCIT as well as Ld. CIT (Appeal) have grossly erred in disallowing employees contribution to ESI and PF ₹ 14,50,188/- deposited beyond due date prescribed under relevant Acts but before due date of filing of return. (b) Ld. DCIT and Ld. CIT (A) ought to have appreciated the rational of allowance of employer s contribution even if made beyond due date of filing of return under section 43B as per amendment with effect from 01.04.2004. (c) Ld. DCIT and Ld. CIT(A) ought to have followed the judgement of M/s ALOM Extrusions Limited (SC) as well as Hon ble High Courts in case of M/s Ghatge Patil Transports Limited, M/s Hemla Embroidery Mills Private Limited, M/s Bihar State Warehousing Corporation Limited and M/s Sagun Foundry Private Limited on the same subject which are binding on the department. 2. Appellant therefore pleads that the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal is disallowance of Employee s Contribution to PF and ESI amounting ₹ 14,50,188/- u/s 36(1 )(va) of the Income Tax Act, 1961 on ground of delayed payment over the prescribed date of payment under the relevant Acts. Statement showing details of the relevant delayed payments vis-a-vis prescribed date is as per Annexure - A for ready reference. Our submissions made heieunder may kindly be considered by your honour while disposing of the appeal. 1.01 From perusal of the attached statement your honour would observe that there is a minor delay in the following payments disallowed u/s 36(1)(va): Relevant Act Due Date Paid Date Amount No of Days of Delay ESIC 21/06/2013 22/06/2013 2,347 1 ESIC 21/07/2013 23/07/2013 3,292 2 ESIC 21/07/2013 23/07/2013 2,466 2 ESIC 21/08/2013 23/08/2013 2,63,011 2 ESIC 21/08/2013 23/08/2013 12,537 2 ESIC 21/08/2013 22/08/2013 2,235 1 ESIC 21/09/2013 24/09/2013 2,77,415 3 ESIC 21/09/2013 24/09/2013 12,036 3 ESIC 21/02/2014 25/02/2014 3,17,706 4 ESIC 21/02/2014 25/02/2014 15,439 4 ESIC 21/02/2014 25/02/2014 2,260 4 PF Act 20/04/2014 21/04/2014 10,265 1 Total 9,21,008 In the relevant period appellant has tendered the payment by cheque along with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h can be taxed under the Act. Hence, the present disallowance needs to be vacated on this count. 3.01 Without prejudice to the above, appellant invites your kind attention to the legislative history of covering both Employer s and Employee s contiibution to Pf and ESI by including the same u/s 43B and section 36(1 )(va). Like section 36(1 )(va), sub section (b) of section 43 B covering Employer s contribution to PF and ESI were introduced with effect from 1/4/1988 providing for allowing such payments only when the payments are tendered within due dates prescribed under the relevant Acts. 3.02 Considering probably the reasoning given in para 2 above, legislaturepermitted the allowance of Employer s contribution to PF and ESI where such payments though not made within the prescribed date under the relevant Acts but made subsequently not only within the financial year but also before the due date of filing of the IT return beyond the financial year, by dropping second proviso to section 43B with effect from 01/04/2004. Hon ble Supreme Court in the case of M/s. Alom Extrusions Ltd. (2009)/185 7axmann 416 (SC) have held this amendment to be retrospective right from the date of the intro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved by the object of the legislation found in the manner indicated before, then if another construction is possible apart from strict literal construction, then that construction should be preferred to the strict literal construction. Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. The Hon'ble Delhi High Court and Hon'ble Bombay High Court after considering, analyzing and interpreting the decision in the case of Alom Extrusion (supra) has held that it will apply both to employers and employee contribution and if the same is deposited before the due date of filing of return of income u/s 139(1) of the 1961 Act, the deduction shall be allowed, even if the same is deposited beyond the time stipulated as due date as prescribed under the provisions of Statute governing PF/ES1 Act. Thus, the applicable provision as is contained in Section 36(1 )(va) is read down by most of the Constitutional Courts including our Jurisdictional High Court (barring Hon'ble Gujarat High Court and Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr. No. Particulars 1. CIT vs Aimil Limited[2010] 188 Taxman 265 (Delhi HC) 2. CIT vs. Ghatge Patil Transports Ltd. (2012) 1002 1034368ITR (Bom.) 3. CIT vs. Hernia Embroidery Mills (P.) Ltd (2014) 366 ITR (Pun Har) 167/127 [Taxmann 207/37] 4. Bihar State Warehousing Corporation Ltd. vs. CIT1 (2008) 302(Patna) [71 Taxmann 247] 5. Sagun Foundry (P.) Ltd. vs. CIT(2006) 87 (All.) [78 Taxmann 47] 6. Cll v. Industrial Security and Intelligence India Pvt. Ltd. (Mad) Tax Case Appeal Nos. 585 and 586 of 2015 and M.P No. 1 of 2015 , dated 24.07.2015 7. Pr. CIT v. Rajasthan State Beverages Corporation Ltd. [2017] 84 taxmann.com 173 SI P filed by the department against the judgment of Hon ble Rajasthan High Court in case ot M/s Rajasthan State Beverages Corporation Ltd referred above has been dismissed by Hon ble Supreme Court as per the order dated 4lh July 2017 (84 taxmann.com 185 (SC)). Only Hon ble Gujarat High Court and Hon ble Kerala High Court have taken a contrary view in the case of M/s. Gujarat State Road Transport Corporation Limited (2014) 223 Taxmann 0398 and Popular Vehicles Services (P.) Ltd. [2018] 96 taxmann.com 13 (Kerala) which have been disputed before the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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