2012 (10) TMI 1264 - AT - Income Tax

Assessee Wins Appeal Over Income Tax Addition: Delay Condoned, Deduction Allowed

The appeal filed by the assessee against the order of the Commissioner of Income-tax(Appeals)-II, Ludhiana was allowed. The delay of 29 days in filing the ... Condonation of delay - deductibility of employees' provident fund and ESIC contributions - belated payment made before due date of filing return - following ratio of the jurisdictional High Court in CIT v. M/s Lakhani India Ltd. - assessment under section 143(3) of the Income-tax Act, 1961Condonation of delay - Whether the delay of 29 days in filing the appeal to the Tribunal should be condoned and the appeal admitted. - HELD THAT: - The assessee explained the delay as unintentional, noting concurrent appellate timelines in related matters and that the appeal was filed 29 days late. Having considered the facts and explanations, the Tribunal found merit in the claim and exercised its discretion to condone the delay. The appeal was accordingly taken on record. [Paras 2]Delay of 29 days is condoned and the appeal is admitted.Deductibility of employees' provident fund and ESIC contributions - belated payment made before due date of filing return - following ratio of the jurisdictional High Court in CIT v. M/s Lakhani India Ltd. - Whether belated payment of employees' contribution to PF and ESIC, paid before the due date of filing the return, is allowable as a deduction. - HELD THAT: - The Assessing Officer made an addition in respect of employees' PF and ESIC contributions paid belatedly, though the record showed payment was made before the due date for filing the return. The Tribunal held that this question is squarely covered by the ratio of the Punjab & Haryana High Court in CIT v. M/s Lakhani India Ltd. Applying that precedent, the Tribunal directed the Assessing Officer to allow the deduction of the contribution amount which had been paid before the close of the financial year and before the due date of filing the return. [Paras 6]The addition of Rs.1,86,799/- on account of employees' PF and ESIC contributions is to be allowed as a deduction in accordance with the cited High Court ratio; the grounds of appeal are allowed.Final Conclusion: The Tribunal condoned the 29 day delay and, following the jurisdictional High Court authority, allowed the deduction of the employees' PF and ESIC contributions paid before the due date of filing the return; the appeal is allowed. Issues involved: Appeal against order of Commissioner of Income-tax(Appeals)-II, Ludhiana u/s 143(3) of the Income Tax Act, 1961. Delay of 29 days in filing present appeal. Addition of Rs.1,86,799/- on account of employees' contribution to Provident Fund and ESIC.Delay in filing appeal:The assessee filed an appeal after a delay of 29 days and sought condonation of the delay, attributing it to the simultaneous handling of appeals for the assessee and its sister concern. The Tribunal accepted the unintentional nature of the delay, condoned it, and admitted the appeal.Employees' contribution to Provident Fund and ESIC:The only issue raised in the appeal was the addition of Rs.1,86,799/- for belated payment of employees' contribution to PF and ESIC. The Assessing Officer observed the delayed payments but acknowledged that they were made before the due date of filing the income tax return. The Tribunal referred to the precedent set by CIT Vs. M/s Lakhani India Ltd. (2010) 188 Taxman 132 (P&H) and directed the Assessing Officer to allow the deduction of Rs.1,86,799/-, in line with the High Court's ruling. Consequently, the grounds of appeal were upheld, and the appeal by the assessee was allowed.Conclusion:The appeal filed by the assessee was allowed, and the order was pronounced in the Open Court on the 4th day of October, 2012.