TaxTMI 
TaxTMI 
2014 (5) TMI 222
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....tion of law in the case of State Bank of Bikaner & Jaipur (DB ITA 177/2011 & 272/2011) "Whether on the facts and in the circumstances of the case, the ITAT was justified in deleting the addition made on account of depositing the PF payment beyond prescribed time, despite the fact that as per Section 36(1)(va) employee's contribution should have been deposited in time; and Section 43B permits delayed payment as regards employer's contribution and not the employee's contribution?" Substantial question of law in the case of JVVNL (DB ITA No.189/2011). "Whether in the facts and circumstances of the case, the ITAT was justified in law in deleting addition made by the Assessing Officer on account of delay in deposit of employees' contribution to PF u/s 36(1)(va)." 4. The brief facts, as emerging on the face of record, are that the respondent-assessees are being assessed to income tax from year to year and the assessment stood completed originally under Section 143(3) of the IT Act in the case of SBBJ and notice u/s 154 was issued, as the Assessing Officer felt that there is a mistake apparent on the face of record. 5. In the case of the re....
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....assessee ought to have paid the amount according to the due date under the relevant provisions of PF Act or GPF etc. and since there was violation of even those Acts, therefore, the benefit/deduction cannot be granted/allowed. Accordingly, the amounts were disallowed. 8. Dissatisfied with the said disallowance, as aforesaid, the matter was carried in appeal before the CIT(A). Before the CIT(A), same explanation was offered and it was further submitted that the payment under the PF Act could not be disallowed under Section 43B of the IT Act even as per the provision as it stood prior to the amendment w.e.f. 01/04/2004. Reliance was placed by the respondents-assessees on the judgment of the Hon'ble Apex Court in the case of CIT Vs. Vinay Cement Ltd.: (2007) 213 CTR 268 (SC) and after considering the said judgment, the CIT(A) agreed with the contention offered by the respondents-assessees and deleted the disallowance as made by the Assessing Officer. 9. Dissatisfied with the deletion of the disallowance under Section 43B of the IT Act, the matter was carried in appeal before the ITAT by the revenue. It was submitted on behalf of the revenue that the Assessing Officer had cor....
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....this provision was brought in. Accordingly, he submitted that both the authorities have come to a wrong conclusion which is not permissible under the Act. 11. Per-contra, Shri P.K. Kasliwal and Mr. Gunjan Pathak, ld. counsel for the respondents-assessees submitted that the ITAT, after considering all the facts, has come to the correct conclusion in analyzing the provisions contained under the Act. 12. It was further contented by them that though proviso was applicable from 01/04/2004 but it was clarified that it has to be treated as retrospective in nature. Nevertheless, they submitted that even the Hon'ble Apex Court in the case of Vinay Cement Ltd. (supra) has come to the conclusion that even the plain language of Section 43B of the Act makes it clear that even without the proviso the claim was allowable under the provisions of Section 43B of the Act and accordingly submitted that the ITAT has come to the correct conclusion and the appeal deserves to be dismissed. 13. We have heard ld. counsel for the parties. It would be fruitful to quote Sections 2(24)(x), 36(1)(va) and 43B of the IT Act which is required to be considered in the present appeals:- "Section2....
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.... previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1983 or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him." 14. On perusal of the above, it transpires that Section 36(1)(va) was inserted by Finance Act, 1987 w.e.f. 01/04/1988 and explanation to this clause, if read collectively, explains to mean that the date by which the assessee is required as an employer to credit the contribution to the employees account in the relevant fund under any Act/Rule or order or notification issued thereunder or under any standing order, award, contract of service or otherwise, prior to the above, clause was inserted to Section 36 for statutory deductions of payment of tax under the provisions of the Act. Section 43B(b) was inserted by the Finance Act, 1983 which came into force w.e.f.01/04/1984. There again, provisions of Section 43B(b) clearly postulates that it is notwithstanding anything contained in other provisi....
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....year. Therefore, even when the sales-tax had in fact been paid by the assessee within the statutory period prescribed for its payment and prior to the filing of the IT return, these assessees were unwillingly prevented from claiming a legitimate deduction in respect of the tax paid by them. This was not intended by s.43B. Hence, the first proviso was inserted in s.43B. The amendment which was made by the Finance Act of 1987 in s.43B by inserting, inter alia, the first proviso, was remedial in nature, designed to eliminate unintended consequences which may cause undue hardship to the assessee and which made the provision unworkable or unjust in a specific situation." 15. The Hon'ble Apex Court, in the case of Vinay Cement Ltd. (supra), after approving the judgment rendered by Gauhati High Court in the case of CIT Vs. George Williamson (Assam) Ltd.: (2006) 284 ITR 619 (Gau), came to the conclusion that such omission under Section 43B(b), without any saving clause of the General Clauses Act, means that the above provisions namely; Clause (a) or (c) or (d) or (e) or (f) were not in existence or never existed and after considering the judgments rendered by the Hon'ble Apex Co....
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....T Vs. Assam Tribune: (2002) 253 ITR 93 (Gau), came to the similar conclusion that the contribution towards the PF etc. having been deposited before filing of the return by the assessee, deduction could not be disallowed under Section 43B of the Act. 18. The Delhi High Court, in the case of CIT Vs. Dharmendra Sharma: (2007) 213 CTR 609 (Del.); Madras High Court, in the case of CIT Vs. Nexus Computer (P) Ltd., reported in (2008) 219 CTR (Mad.) 54; Delhi High Court, in the case of CIT Vs. P.M. Electronics Ltd., reported in (2008) 220 CTR (Del) 635; Karnataka High Court, in the case of CIT Vs. Kurlon Ltd., reported in (2011) 203 Taxman 29 (Kar.); Himachal Pradesh High Court, in the case of CIT Vs. Nipso Polyfabriks Ltd., reported in (2013) 213 Taxman 376 (Himachal Pradesh) also came to the aforesaid view. 19. Uttrakhand High Court, in the case of CIT Vs. M/s. Kichha Sugar Company Ltd., reported in (2013) 356 ITR 351 (Uttaranchal), after considering the aforesaid provisions, held as under:- "Therefore, the due date referred to in section 36(1)(va) of the Act must be read in conjunction with section 43B(b) of the Act and a reading of the same would make it amply clear that....