TaxTMI 
TaxTMI 
2019 (7) TMI 1909
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....e further submitted that non filing of the appeal against the assessment order does not mean that assessee was liable for penalty u/s 271(1)(c) of the Act as the issue was entirely covered in favour of the assessee as the assessee had deposited the amount before filing of return of income and therefore, as per the judgment of Hon'ble Allahabad High Court in the case of Sagun Foundry (P.) Ltd. vs. CIT in IT Appeal No. 87 of 2006, the addition was not warranted and therefore, the penalty was also not warranted. Regarding the date of deposit of PF and ESI, Learned A. R. took us to the annexure forming part of audit report u/s 44AB of the Act and our specific attention was invited to page No. 1 where the charts showing the due date of deposit and actual date of deposits was placed. In view of the above, it was prayed that the penalty should be deleted. 4. Learned D. R., on the other hand, supported the order of the authorities below. 5. I have heard the rival parties and have gone through the material placed on record. I find that it is an undisputed fact that penalty was imposed for delay in making payment of EPF and ESI. It is also an undisputed fact that such deposits were m....
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....gh Court in appeal. Court considered following question, posed in para 7.01, reads as under:- "Short question which is posed for consideration of this court is with respect to the disallowance of the amount being the employees' contribution to the PF account/ESI contribution which admittedly which the concerned assessee did not deposit with the PF Department7ESI Department within due date under the PF Act and7or the ESI Act." 18. Gujrat High Court referred to Section 2(24)(x) and found that any sum received by Assessee (employer) from his employees as contributions to any provident fund or superannuation fund or any fund set up under Act, 1948, or any other fund for welfare of such employees, constitute income. However, Section 36 of Act 1961 provides for deduction in computing income referred to in Section 28. The relevant provision of Section 36 applicable to the case before Gujrat High Court was Section 36(1)(va) with which we are also concerned. It entitles an Assessee for deduction in computing income referred to in Section 28 with respect to any sum received by Assessee (employer) from his employee to which Section 2(24)(x) apply, if such sum is credited by Assessee ....
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....rt in Commissioner of Income­Tax Vs Nipso Ployfabriks Ltd., (2013) 350 ITR 327 and Karnataka High Court in Commissioner of Income­Tax Vs Sabri Enterprises, (2008) 298 ITR 141. 2.1 Karnataka High Court had an occasion to consider, whether it should dissent with the view taken in the earlier judgments and follow the view taken by Gujrat High Court in Commissioner of Income­Tax Vs Gujrat State Road Transport Corporation (supra) and this occasion came in Essae Teraoka P. Ltd. Vs Deputy Commissioner of Income­Tax, (2014) 366 ITR 408. Dispute relates to A.Y. 2008-09. Assessee filed Return on 26.09.2008. Return was processed under Section 143(1) and thereafter on scrutiny, notice under Section 143(2) was issued. Assessing Officer completed assessment by order dated 24.12.2010 under Section 143(3) disallowing Rs. 12,51,737/- under Section 36(1)(va) and also disallowing Rs. 1,04,621/- under Section 14A read with Rule 8D. In appeal, CIT (A) reversed findings of Assessing Officer but on appeal preferred by Revenue, Tribunal restored Assessing Officer's order and that is how matter came to Karnataka High Court. The question up for consideration was, "whether Tribunal was jus....
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....r judgment in Commissioner of Income­Tax Vs Rai Agro Industries Ltd., (2011) 334 ITR 122, to hold that Section 43B shall apply to both 'contributions' i.e. employers' and employees'. 24. Kerala High Court in recent judgment in Commissioner of Income­Tax Vs Merchem Ltd., (2015) 378 ITR 443, has followed the decision of Gujrat High Court in Commissioner of Income­Tax Vs Gujrat State Road Transport Corporation (supra) and dissented with the otherwise judgments of Rajasthan High Court in Commissioner of Income­Tax Vs State Bank of Bikaner and Jaipur, (2014) 363 ITR 70, Karnataka High Court in Commissioner of Income­Tax Vs Spectrum Consultants India P. Ltd. (supra) and Bombay High Court in Commissioner of Income­Tax Vs Ghatge Patil Transports Ltd., (2014) 368 ITR 749. 25. Before following a particular view when there is divergence in views of different High Courts, we find it appropriate to examine Supreme Court judgment in Commissioner of Income­Tax Vs Alom Extrusions Ltd. (supra) to find out whether it can be confined only in respect to employers' contribution or is applicable to both 'contributions', whether by employer or....
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....lause. The underlying object being to disallow deductions claimed merely by making a book entry based on the mercantile system of accounting. At the same time, Section 43B made it mandatory for the Department to grant deduction in computing income under Section 28 in the year in which tax, duty, cess etc. is actually paid. Parliament took cognizance of the fact that accounting year of a company did not always tally with the due dates under Provident Fund Act, Municipal Corporation Act (Octroi) and other Tax laws. Therefore, by way of First Proviso, an incentive/relaxation was sought to be given in respect of tax, duty, cess or fee by explicitly stating that if such tax duty cess or fee is paid before the date of filing of the return under Act 1961, Assessee would than be entitled to deduction. This relaxation/incentive was restricted only to tax, duty, cess and fee. It did not apply to contributions to labour welfare funds. The reason appears to be that the employer should not sit on the collected contributions and deprive workmen of the rightful benefits under social welfare legislations by delaying payment of contributions to the welfare funds. But when implementation problems we....