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M/s CALEDONIAN JUTE & INDUSTRIES LTD. Versus COMMISSIONER OF INCOME TAX & ANR.

2016 (9) TMI 815 - CALCUTTA HIGH COURT

Additions under Section 43B both on account of Provident Fund and ESI dues - modification of the tribunal order seeked - Held that:- Direction for enhancement in respect of employee’s contribution was passed by the CIT(A). In any event the averments, quoted go to show that the assessee was aggrieved by an order passed by the Assessing Officer in giving effect to the order of the CIT(A). For an alleged mistake allegedly made by the Assessing Officer, the assessee made the miscellaneous applicatio .....

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Bag, Adv., Mr. M. L. Tiwari, Adv., Mr. Rahul Kinkar Pandey, Adv., Mr. Farhan Gaffar, Adv., JUDGEMENT The subject matter of appeal is an order dated 5th December, 2008 passed by the learned Income Tax Appellate Tribunal C Bench, Kolkata in Miscellaneous Application No.98/Kol./2008 arising out of ITA No.167/Kol//2007 pertaining to the assessment year 2003-04 by which the learned Tribunal dismissed the miscellaneous application filed by the assessee. The facts and circumstances of the case are as f .....

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this case the Assmt Year involved is 2003-04. Hence the law prevailing as on 01.4.03 will apply. As on 01.4.03, the amended second proviso was very much in the statute. Hence the allowability of employer s contribution to the Provident Fund will be governed by the said second proviso, and not the amended the first proviso effective from 1.4.2004. I would therefore, most respectfully, differ from the decision of the Hon ble ITAT in the case of Jagatdal Jute and Industries Ltd. (Supra) and hold th .....

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th employer s and employees contribution towards Provident Fund beyond the specified due date under the respective Rules and will not be allowed as a deduction. In this regard the Annexure-III of the Tax Audit Report wrongly mentions the due date for the Month of April, 2002 as 20th of June, 2002. It should be 20th of May, 2002. Similarly due dates in the said Schedule have been wrongly extended by one month. Hence there has been delay for almost all the twelve months of the relevant previous ye .....

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Tax Audit Report reveals that the employer s payment towards ESI for all the twelve months is beyond the due date under the ESI Rules. In this regard the Ld. A/R, has relied on the decision of the Hon ble ITAT, A-Bench, Kolkata in the case of Jagatdal Jute Industries Ltd. For similar reasons discussed in detail in para-8.1 (Supra), I hold that there has been default in making such payments for all the twelve months of the relevant previous year. The AO has made the addition only in respect of t .....

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e decision of ITAT, Special Bench, Kolkata in the case of JCIT -vs.- M/s. I.T.C. Limited in I.T.A. No.1541/Cal./2000 dated 07.09.2007. We, therefore, hold that so far as the employer s contribution to PF and ESI is concerned, the same should be allowed if these are paid on or before filing of return or before the due date of return, whichever is earlier and the employees contributions to this fund are only to be allowed if these are paid within the due date specified in such Act including the gr .....

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t fund. The CIT(A) did not issue any direction with regard to allowability or non-allowability of any amount on account of employees contribution. He submitted that the learned Tribunal by mistake also passed an order with respect to the employees contribution. This was the mistake made by the learned Tribunal which was sought to be corrected by the miscellaneous application but the learned Tribunal dismissed that application. The questions of law raised in this appeal are as follows:- (a) Wheth .....

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iction beyond the subject matter of appeal before it. The submission advanced by Mr. Bag does not appear to have any substance for the following reasons:- It is not correct to say that the CIT(A) did not pass any order as regards the employees contribution. As a matter of fact, the CIT(A) had held as follows:- I accordingly hold that the assessee has defaulted in making payment of both employer s and employees contribution towards Provident Fund beyond the specified due date under the respective .....

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ned Tribunal. In short, the enhancement is to the tune of the employer s contribution towards for the remaining eight months. This sentence inadvertently added is contrary to the finding noticed above and is a patent mistake on the part of CIT(A) which cannot alter the order passed by him in the same paragraph which is in conformity with his findings noticed above. It is not also correct to allege that there was no appeal with regard to the employees contribution to P.F. The CIT(A) had recorded .....

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respect of delayed and/or belated payment of PF and ESI. Belated payment of P.F. according to the CIT(A), it cannot be disputed, was with regard to both employees and employer s share. The learned Tribunal had as such no option but to give its view as regards both which the Tribunal did. The Tribunal as a matter of fact agreed with the views of CIT(A) as regards belated payment of employees share. Even assuming that there was no appeal with regard to the belated payment of employee s share, the .....

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for the parties and after taking into consideration the provision of section 254 of the Income-tax Act, we find that an Appellate Tribunal may after giving both the parties to the appeal an opportunity of being heard pass such order thereon as it thinks fit. The word thereon , Mr. Bajoria continues, is significant inasmuch as it restricts the jurisdiction of the Tribunal to the subject-matter of the appeal. In other words, according to Mr. Bajoria, the original grounds of appeal and such additio .....

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oresaid ₹ 100 lakhs nor was any amendment sought for including such ground and the learned Tribunal below even in its judgment itself while considering the questions before it, referred to only those two points excluding the question of involvement of ₹ 100 lakhs. Therefore, the Tribunal below acted without jurisdiction in enhancing the scope of the appeal although the appellant did not raise any such point. On that ground alone, the portion of the order passed by the Tribunal below .....

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e chose to enhance the assessment which he did not do. In a further appeal by the revenue against the order of CIT(A) the aforesaid income of ₹ 1 crore was not the subject-matter of challenge. It is in that view of the matter that this Court held that the Tribunal acted without jurisdiction. Mr. Bag also drew our attention to the impugned order wherein paragraphs 1 and 2 of the Miscellaneous Application have been quoted, which read as follows:- (1) It is submitted that there is no material .....

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