ACIT, Faridabad v. M/s Mitaso Appliances Ltd.,, Faridabad

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO. 3314/DEL/2009 ASSESSMENT YEAR : 2002-03 ACIT CIRCLE-I BLOCK-I-B CGO COMPLEX NH-4 FARIDABAD. VS. M/S. MITASO APPLIANCES LTD. PLOT NO. 63 SECTOR-6 FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.S. SAHOT A SR. D.R. RESPONDENT BY : SHRI ASHWANI TANEJA C.A. O R D E R PER: C.L. SETHI J.M. THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 02.06.2009 PASSED BY THE LD. CIT(A) IN THE MATTER OF ORDER U/S 154 OF THE IN COME TAX ACT 1961 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX ON 30.03.2 007 FOR THE ASSESSMENT YEAR 2002-03. 2. THE ISSUE INVOLVED IN THIS APPEAL IS WITH REGARD TO THE ALLOWABILITY OF DEDUCTION ON ACCOUNT OF PAYMENT TOWARDS ESI AND PF CONTRIBUTION AMOUNTING TO RS. 3 48 046/-. 3. IN THIS CASE ORIGINALLY AN INTIMATION WAS ISSUE D U/S 143(1) BY DETERMINING THE TOTAL INCOME BEING BOOK PROFIT U/S 115JB AT R S. 7 20 268/-. LATER ON IT WAS NOTICED BY THE A.O. THAT PAYMENT OF ESI AND PF CONT RIBUTION WERE NOT PAID ON THE ITA NO. 3314/DEL/2009 2 OF 4 DUE DATES AS PROVIDED U/S 36(1)(VA)/36(1)(IV) READ WITH SECTION 2(24)(X) OF THE INCOME TAX ACT AND CONSIDERING THE SAME TO BE A MI STAKE APPARENT FROM THE RECORD PASSED THE ORDER U/S 154 OF THE ACT ON 30.03 .2007 DISALLOWED THE DEDUCTION ON ACCOUNT OF PAYMENT TOWARDS ESI AND PF CONTRIBUTION. 4. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LD. CIT(A). 5. BEFORE THE CIT(A) THE ASSESSEE CONTENDED THAT T HE MATTER WAS NOT RECTIFIABLE U/S 154 OF THE ACT INASMUCH AS WHETHER THE PAYMENT TOWARDS EMPLOYEES AND EMPLOYEES CONTRIBUTION TO ESI AND PR OVIDENT FUND IF NOT PAID WITHIN DUE DATE BUT PAID WITHIN FINANCIAL YEAR OR B EFORE THE DUE DATE OF THE FILING OF THE RETURN OF INCOME WAS A DEBATABLE ONE. IT WA S FURTHER CONTENDED THAT IN THE LIGHT OF THE VARIOUS DECISIONS IN THE CASE OF CIT V S. HINDUSTAN CYCLES AND TUBE LTD. 281 ITR 225 (DELHI) IN THE CASE OF JAGAT DAL JUTE AND INDUSTRY LTD. VS. CIT 266 ITR 587 (KOL.) AND IN THE CASE OF CIT VS P.M. E LECTRONICS LTD. (2009) 177 TAXMAN 1 (DELHI HIGH COURT) THE PAYMENT TOWARDS CO NTRIBUTION TO PF AND ESI FUND ARE ALLOWABLE DEDUCTION IF THEY ARE PAID WITHI N THE FINANCIAL YEAR OR EVEN BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INC OME U/S 139(1) OF THE ACT AND IN THIS RESPECT THE AMENDMENT MADE BY THE FINANCE A CT 2003 DELETING THE SECOND PROVISO TO SECTION 43B OF THE ACT WAS HELD T O BE RETROSPECTIVE AND OPERATIVE WITH EFFECT FROM 01.04.1998. 6. AFTER CONSIDERING THE ASSESSEES SUBMISSION THE LD. CIT(A) DELETED THE DISALLOWANCE BY GIVING A FINDING THAT ALL THE PAYME NTS WERE MADE BY THE ASSESSEE ITA NO. 3314/DEL/2009 3 OF 4 BEFORE THE DUE DATE OF THE FILING OF THE RETURN OF INCOME APPLICABLE TO THE ASSESSEES CASE I.E. BEFORE 31.10.2002. 7. HENCE THE DEPARTMENT IS IN APPEAL. 8. AFTER CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE DISALLOWANCE BY PLACING RELIANCE UPON THE AFORESAID DECISION RELIED UPON BY THE ASSESSEE BEFORE HIM. AT THIS STAGE IT IS NOW PERT INENT TO NOTE THAT THIS ISSUE INVOLVED IN THE PRESENT APPEAL IS NO MORE RES-INTEG RA AS IT HAS NOW BEEN WELL SETTLED BY THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. ALOM EXTRACTIONS LTD. SINCE REPORTED IN (2009) 185 TAXMAN 416 (SC) WHERE IT HAS BEEN HELD THAT THE SECOND PROVISO TO SECTION 43 B DELETED BY THE FINANCE ACT 2003 IS CURATIVE IN NATURE AND HENCE IT IS RETROS PECTIVE AND WOULD OPERATE WITH EFFECT FROM 01.04.1988 WHEN THE FIRST PROVISO CAME TO BE INSERTED. THE FIRST PROVISO TO SECTION 43B OF THE ACT AFTER ITS AMENDME NT BY THE FINANCE ACT 2003 PROVIDES THAT NOTHING CONTAINED IN SECTION 43B SHAL L APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SECTION 1 39(1) IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SU M WAS INCURRED AS PROVIDED IN SECTION 43B OF THE ACT AND THE EVIDENCE OF SUCH PAY MENT IS FURNISHED BY THE ASSESSEE ALONGWITH SUCH RETURN. IN THIS VIEW OF TH E MATTER THE ORDER OF THE LD. CIT(A) IS UPHELD. ITA NO. 3314/DEL/2009 4 OF 4 9. IN THE RESULT THE PRESENT APPEAL FILED BY THE R EVENUE IS DISMISSED. 10. THIS DECISION IS PRONOUNCED IN THE OPEN COURT I MMEDIATELY AFTER THE HEARING WAS OVER ON 6 TH JANUARY 2010. (K.G. BANSAL) ACCOUNTANT MEMBER (C.L. SETHI) JUDICIAL MEMBER DATED: 6 TH JANUARY 2010. MAMTA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. BY ORDER DEPUTY REGISTRAR