Anjali Devi Majeti , Hyderabad v. Income Tax Officer, Ward-15(3) , Hyderabad

ITA 95/Hyd/2020 | 2018-2019
Pronouncement Date: 19-05-2021 | Result: Allowed

Appeal Details

RSA Number 9522514 RSA 2020
Assessee PAN ACAPM9075B
Bench Hyderabad
Appeal Number ITA 95/Hyd/2020
Duration Of Justice 1 year(s) 3 month(s) 22 day(s)
Appellant Anjali Devi Majeti , Hyderabad
Respondent Income Tax Officer, Ward-15(3) , Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 19-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 19-05-2021
Last Hearing Date 18-03-2021
First Hearing Date 10-05-2021
Assessment Year 2018-2019
Appeal Filed On 27-01-2020
Judgment Text
ITA NO 95 OF 2020 ANJALI DEVI MAJETI HYDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NO.95/HYD/2020 ASSESSMENT YEAR:2018-19 LATE SMT. ANJALI DEVI MAJETI (REP. BY L/R MAJETI NAGARAJU) HYDERABAD PAN:ACAPM9075B VS. INCOME TAX OFFICER WARD 15(3) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI TARAK NATH REVENUE BY : SRI RAJAT MISHRA DR DATE OF HEARING: 10/05/2021 DATE OF PRONOUNCEMENT: 19/05/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2018-19 AGAIN ST THE ORDER OF THE CIT (A)-7 HYDERABAD DATED 19.11. 2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE A N INDIVIDUAL AND PROPRIETOR OF M/S. VERATRONIKS FILE D HER RETURN OF INCOME FOR THE A.Y 2018-19 ON 17.09.2018 DECLARING GROSS TOTAL INCOME OF RS.19 41 388/-. HOWEVER DURING THE COURS E OF ASSESSMENT PROCEEDINGS THE CPC BANGALORE MADE AN A DDITION OF RS.1 65 708/- BY DISALLOWING THE AMOUNT RECEIVED FR OM THE EMPLOYEES AS CONTRIBUTION TO THE PF/SUPERANNUATION FUND/FUND SET UP UNDER ESI ACT SINCE THE SAME AMOUNT WAS NOT CREDITED TO EMPLOYEES ACCOUNTS ON OR BEFORE THE DUE DATE SPECIF IED UNDER RELEVANT ACTS AS PER THE PROVISIONS OF SECTION 36(1 )(VA) OF THE I.T. ACT AND ALSO MADE A DISALLOWANCE OF EXPENSES TO THE TUNE OF RS.15 794/- INCURRED ON ACCOUNT OF PENALTY. THUS T HE ASSESSING ITA NO 95 OF 2020 ANJALI DEVI MAJETI HYDERABAD PAGE 2 OF 5 OFFICER ASSESSED THE GROSS TOTAL INCOME OF RS.21 22 890 AND RAISED A DEMAND OF RS.67 200/-. AGGRIEVED THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER O F THE ASSESSING OFFICER WITH REGARD TO ADDITION OF RS.1 65 708/- AN D DIRECTED THE ASSESSING OFFICER TO DELETE ADDITION OF RS.15 794/- ON ACCOUNT OF PENALTY. AGGRIEVED THE ASSESSEE IS IN SECOND APPEA L BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL : 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) IS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF RS. 1 65 708/- TOWARDS BELATED PAYMENT OF EMPLOYEES' SH ARE OF PROVIDENT FUND/ESI PAYMENTS BASED ON JURISDICTIO NAL HIGH COURT'S DECISION WITHOUT TESTING THE RATIO DEC IDENDI THEREOF TO FACTS ON RECORD. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT PAYMENT/CONTRIBUTION OF EMPLOYEES' SHARE MADE TO THE PROVIDENT FUND/ESI AUTHORITY ANY TIME BEFORE THE DUE DATE OF FILING TH E RETURN FOR THE YEAR ARE ELIGIBLE FOR DEDUCTION IN TERMS OF SECTION 36(1)(VA) READ IN CONJUNCTION WITH SECTION 43B(B). 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO TAKE COGNISANCE OF THE LEGAL POSITION THA T IN VIEW OF DIFFERING DECISIONS OF VARIOUS HIGH COURTS AND T HERE BEING NO DECISION OF THE JURISDICTIONAL HIGH COURT SINCE TWO POSSIBLE VIEWS OF THE MATTER ARE THERE THE ONE WHICH IS IN FAVOUR OF THE ASSESSEE DESERVES TO BE ADOPTED IN THE LIGHT OF THE HON'BLE APEX COURT JUDGEMENT IN THE CA SE OF CIT VS. VEGETABLE PRODUCTS LTD. [88 ITR 192] (SE). 4. FOR THESE GROUNDS AND FOR SUCH OTHER GROUNDS THA T MAY BE ADDUCED AT THE TIME OF HEARING OF THE APPEAL TH E ISSUES RAISED IN THIS APPEAL MAY BE CONSIDERED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW WHILE THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD I FIND THAT THE COORDINATE BENCH OF THIS TR IBUNAL IN THE CASE OF ELICO LTD VS. ACIT IN I.T.A. NO. 1120/HYD/2 016 DATED ITA NO 95 OF 2020 ANJALI DEVI MAJETI HYDERABAD PAGE 3 OF 5 18.11.2020 (TO WHICH THE JM IS A SIGNATORY) HAS DE CIDED THE ISSUE AS UNDER: 3. GROUND NO.2 IS RELATED TO SUSTAINING OF ADDITION MADE BY THE AO OF RS.41 18 429/- AND RS.3 80 215/- BEING THE AMOUNT O F PF AND ESI RESPECTIVELY BY APPLYING THE PROVISIONS OF SECTION 36(1)(VA) OF THE INCOME TAX ACT [ACT]. 3.1. IN THE ASSESSMENT PROCEEDINGS THE AO FOUND TH AT THE ASSESSEE HAS REMITTED THE SUM OF RS.41 18 429/- EMPLOYEES CONTRI BUTION TOWARDS PF BEYOND THE DUE DATE SPECIFIED UNDER THE EMPLOYEES P ROVIDENT FUND ACT HOWEVER REMITTED THE SAME BEFORE THE DUE DATE OF F ILING OF RETURN OF INCOME. SIMILARLY THE ASSESSEE HAS REMITTED THE CO NTRIBUTION TOWARDS ESI AMOUNTING TO RS.3 80 215/- BELATEDLY. HOWEVER BOTH THE CONTRIBUTIONS I.E. EMPLOYEES CONTRIBUTION OF PF AS WELL AS THE ESI WER E REMITTED TO THE CONCERNED ACCOUNTS BEFORE THE DUE DATE OF FILING OF RETURNS OF INCOME U/S 139(1) OF THE ACT. THE AO VIEWED THAT AS THE AMOUNT S WERE PAID INTO THE RESPECTIVE ACCOUNTS BELATEDLY BEYOND THE DUE DATE S PECIFIED UNDER THE PROVISIONS OF THE RESPECTIVE STATUTES THE AO MADE THE ADDITION TO THE RETURNED INCOME OF THE ASSESSEE. 3.2. AGAINST THE ORDER OF AO THE ASSESSEE PREFERRE D AN APPEAL BEFORE THE CIT(A) AND THE LD.CIT(A) IN HIS DETAILED ORDER CON FIRMED THE ADDITION MADE BY THE AO HOLDING THAT THE ASSESSEE HAVING NO T REMITTED THE CONTRIBUTION TO THE RESPECTIVE ACCOUNTS BEFORE THE DUE DATES SPECIFIED UNDER THE ACT THE SAME ARE NOT ALLOWABLE DEDUCTION S U/S.43B OF THE ACT. HENCE THE ASSESSEE PREFERRED APPEAL BEFORE THE TRI BUNAL AGAINST THE ORDER OF LD.CIT(A). 3.3. DURING THE APPEAL HEARING LD.AR ARGUED THAT T HE ASSESSEE HAS REMITTED THE CONTRIBUTIONS TO THE RESPECTIVE ACCOUN TS BEFORE THE DUE DATE OF FILING THE RETURN THEREFORE REQUESTED TO SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND DELETE THE ADDITION MADE BY THE AO. 3.4. ON THE OTHER HAND THE LD.DR SUBMITTED THAT TH E EPF IS IN RESPECT OF EMPLOYEES CONTRIBUTION BOTH THE PF AND ESI ARE REQ UIRED TO BE ALLOWED AS DEDUCTIONS IF THE SAME ARE REMITTED TO THE RESPECT IVE ACCOUNTS BEFORE THE DUE DATES SPECIFIED IN THE RESPECTIVE ACT. SINCE T HE ASSESSEE FAILED TO REMIT THE SAME BEFORE THE DUE DATE OF THE RESPECTIVE ACCO UNTS AS PER THE PROVISIONS OF SECTION 36(1)(VA) OF THE ACT THE AO MADE THE ADDITION AND THE LD.CIT(A) RIGHTLY SUSTAINED HENCE NO INTERFER ENCE IS CALLED-FOR IN THE ORDER OF LD.CIT(A) HENCE ARGUED THAT THE APPEAL OF THE ASSESSEE DESERVED TO BE DISMISSED. 3.5. WE HAVE HEARD BOTH THE PARTIES THROUGH VIDEO C ONFERENCE AND GONE THROUGH THE MATERIAL PLACED ON RECORD. IN THE INSTA NT CASE THERE IS NO DISPUTE THAT THE AMOUNTS-IN-QUESTION WITH REGARD TO EPF AND ESI WERE REMITTED TO THE CONCERNED ACCOUNTS BEFORE THE DUE D ATE OF FILING THE RETURN OF INCOME U/SN139(1). THIS THE TRIBUNAL HAS CONSIS TENTLY TAKEN A VIEW THAT IF THE PF AND ESI ARE REMITTED TO THE RESPECTIVE AC COUNTS THE SAME ARE REQUIRED TO BE ALLOWED AS DEDUCTION. IN THE CASE OF KLR INDUSTRIES LTD. VS. DCIT (2017) [83 TAXMANN.COM 322] (HYD) THE TRI BUNAL HELD AS UNDER: ITA NO 95 OF 2020 ANJALI DEVI MAJETI HYDERABAD PAGE 4 OF 5 '34. THE A.O. DISALLOWED THE EXPENDITURE CLAIMED BY OBSERVING THAT THE ASSESSEE HAS NOT REMITTED THE EMPLOYEES CONTRIBUTIO N TO PF AND ESI WITHIN THE PRESCRIBED DATE AS MENTIONED IN SECTION 36(1)(V A). THOUGH THE ASSESSEE DID NOT CHALLENGE THE DISALLOWANCE BEFORE LEARNED C IT(A) BUT HE RAISED AN ADDITIONAL GROUND BEFORE US CHALLENGING THE SAID DI SALLOWANCE. IT IS THE CONTENTION OF THE ASSESSEE THAT THE EMPLOYEES CONTR IBUTION TO ESI AND PF THOUGH WAS NOT PAID WITHIN THE DUE DATE AS PRESCRI BED UNDER SECTION 36(1)(VA) BUT SUCH DUES HAVING BEEN PAID BEFORE THE DUE DATE OF FILING OF RETURN OF THE INCOME AS PRESCRIBED UNDER SECTION 13 9(1) THE AMOUNT IS ALLOWABLE AS A DEDUCTION AS PER THE PROVISIONS OF S ECTION 43B. WE FIND MERIT IN THE AFORESAID SUBMISSIONS OF THE ASSESSEE. THERE ARE A NUMBER OF JUDICIAL PRECEDENTS ON THIS ISSUE WHEREIN IT IS HEL D THAT IF THE EMPLOYEES CONTRIBUTION TO PF AND ESI IS PAID WITHIN THE DUE D ATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(1) THEN THE AMOUNT IS AL LOWABLE AS A DEDUCTION IN VIEW OF THE PROVISION OF SECTION 43B. IN VIEW OF THE AFORE SAID WE DELETE THE ADDITION OF RS.2 07 209'. 3.5.1. SIMILARLY HON'BLE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF PR.CIT VS. RAJASTAN BEVERAGES CORPORATION LTD. (20 17) [84 TAXMANN.COM 173] HELD THAT NO DISALLOWANCE CAN BE MADE IN RESPE CT OF PF AND ESI U/S.36(1)(VA) OF THE ACT IF THE SAME ARE DEPOSITED ON OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. FOR THE SAKE CLARIT Y AND CONVENIENCE WE EXTRACT RELEVANT PART OF THE ORDER OF THE HON'BLE R AJASTHAN HIGH AS UNDER: '5. SO FAR AS THE QUESTION RELATING TO PRIVILEGE FE ES AMOUNTING TO RS.26.00 CRORES IN THE INSTANT YEAR AS WELL AS THE DEDUCTION OF CLAIM OF RS.17 80 765/- ON ACCOUNT OF PROVIDENT FUND (PF) AN D ESI IS CONCERNED THIS COURT HAS EXTENSIVELY CONSIDERED THE AFORESAID TWO QUESTIONS IN ASSESSEE'S OWN CASE VIDE JUDGMENT AND ORDER DT.26.0 5.2016 REFERRED TO (SUPRA) AND HAS HELD THAT THE PRIVILEGE FEES BEING A REVENUE EXPENDITURE IS REQUIRED TO BE ALLOWED AS A REVENUE EXPENDITURE. TH IS COURT IN THE AFORESAID CASE HAS ALSO ALLOWED THE CLAIM OF THE ASSESSEE IN SO FAR AS PAYMENT OF PF & ESI ETC. IS CONCERNED ON THE FINDING OF FACT THA T THE AMOUNTS IN QUESTION WERE DEPOSITED ON OR BEFORE THE DUE DATE OF FURNISH ING OF THE RETURN OF INCOME AND TAKING IN CONSIDERATION JUDGMENT OF THIS COURT IN CIT V. STATE BANK OF BIKANER & JAIPUR [2014] 363 ITR 70/43 TAXMA NN.COM 411/225 TAXMAN 6 (MAG.) (RAJ.) AND CIT V. JAIPUR VIDHUT VIT ARAN NIGAM LTD. [2014] 363 ITR 307/49 TAXMANN.COM 540/[2015] 228 TA XMAN 214 (MAG.) (RAJ.) AND ACCORDINGLY BOTH THE QUESTIONS ARE COVER ED BY THE AFORESAID JUDGMENT AND AGAINST THE REVENUE'. AGAINST WHICH THE REVENUE HAS FILED SLP BEFORE THE HON'BLE SUPREME COURT WHICH WAS DISMISSED BY THE HON'BLE APEX COUR T IN (2017) [85 TAXMANN.COM 185].THEREFORE TAKING THE CONSISTENT V IEW AND RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE CO-ORDINATE BENCH O F THE ITAT IN THE CASE OF KLR INDUSTRIES LTD. VS. DCIT (SUPRA) WE HOLD T HAT NO DISALLOWANCE COULD BE MADE IN RESPECT OF EMPLOYEES CONTRIBUTION OF PF AND ESI IF THE SAME ARE DEPOSITED BEFORE THE DUE DATE OF FILING TH E RETURN OF INCOME. ACCORDINGLY WE SET ASIDE THE ORDER OF LD.CIT(A) AN D DELETE THE ADDITION MADE BY THE AO. THE APPEAL OF THE ASSESSEE ON THIS GROUND IS ALLOWED. ITA NO 95 OF 2020 ANJALI DEVI MAJETI HYDERABAD PAGE 5 OF 5 5. RESPECTFULLY FOLLOWING THE SAME I SET ASIDE THE ORDER OF THE CIT (A) AND DELETE THE ADDITION MADE BY THE ASS ESSING OFFICER ON THIS ISSUE. 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MAY 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 19 TH MAY 2021. VINODAN/SPS COPY TO: S.NO ADDRESSES 1 LATE SMT. ANJALI DEVI MAJETI (REP. BY L/R MAJETI NA GARAJU) PLOT NO.18/ASSESSEE EC COMPLEX KUSHAIGUDA HYDERAB AD 2 INCOME TAX OFFICER WARD 15(3) BLOCK D 5 TH FLOOR IT TOWERS AC GUARDS HYDERABAD 3 CIT (A)- 7 HYDERABAD 4 PR. CIT 7 HYDERABAD 5 DR ITAT HYDERABAD BENCHES 6 GUARD FILE BY ORDER