TMI Blog2021 (11) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression sufficient cause the principle of advancing substantial justice is of prime importance and the expression sufficient cause should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression sufficient cause should receive a liberal construction. In case the delay is not condoned, it would amount to legalise an illegal and unconstitutional order. The power given to the Tribunal is not to legalise an injustice on technical ground but to do substantial justice by removing the injustice. The Parliament conferred power on this Tribunal with the intention that this Tribunal would deliver justice rather than legalise injustice on technicalities. Therefore, when this Tribunal is empowered and capable of removing injustice, in our opinion, the delay of 508 days has to be condoned and the appeal of the assessee has to be admitted and disposed of on merits. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. The Ld CIT(A) while dismissing the appeal on technical grounds, erred in upholding the addition of Rs, 11,73,481/- made by the Ld AO towards disallowance of PF and ESI contribution of employees paid beyond the due date under section 36(1)(va) read with section 43B of the Act. 8. The Ld CIT (A) and the Ld AO have erred in making the addition despite the fact that the Appellant had made the remittances towards PF and ESI contribution of employees before the due date of filing return under section 139(1) of the Act, which fact has not been disputed by the Ld CIT (A) or Ld AO. 9. The Ld CIT(A) and the Ld AO erred in not appreciating that the issue was covered by the decisions of the Hon'ble Karnataka High Court in the case of CIT v Shabari Enterprises (2008) 298 ITR 141 (Kar), CIT v Spectrum Consultants India Pvt Ltd (WA No.4077/2013), Essae Teraoka Pvt Ltd v DCIT (ITA No.480/2013); INTEREST UNDER SECTION 234A: 10. The Ld AO erred in levying interest of ₹ 16,003/- under section 23A of the Act, the Ld CIT(A) erred in confirming the same. 11. The Ld CIT (A) and Ld AO erred in not appreciating that the due date for filing return for AY 2018-19 in Audit cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avit before the CIT(A) saying that the appeal was not filed because of the Accountant s inability to file the appeal. The Revenue has not filed any counter-affidavit to deny the allegation made by the assessee. While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder:- (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) Every day s delay must be explained does not mean that a pedantic approach should be made. Why not every hour s delay, every second s delay? The doctrine must be applied in a rational, common sense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. 11. In fact, the Madras High Court in the case of CIT v. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the delay of condonation and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Accordingly, the Madras High Court condoned nearly 21 years of delay in filing the appeal. 12. When compared to 21 years, 508 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM ) condoned more than six hundred days delay. It is pertinent to mention herein that the view taken by the present author in that case was overruled by the Third Member. 13. The Madras High Court in the case of Sreenivas Charitable Trust (supra) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling the appeal within the period of limitation, the delay has to be condoned irrespective of the duration/period. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condoning the delay of 508 days. 17. In case the delay is not condoned, it would amount to legalise an illegal and unconstitutional order. The power given to the Tribunal is not to legalise an injustice on technical ground but to do substantial justice by removing the injustice. The Parliament conferred power on this Tribunal with the intention that this Tribunal would deliver justice rather than legalise injustice on technicalities. 18. Therefore, when this Tribunal is empowered and capable of removing injustice, in our opinion, the delay of 508 days has to be condoned and the appeal of the assessee has to be admitted and disposed of on merits. In view of the above, we condone the delay of 508 days in filing the appeal and admit the appeal for adjudication. 19. Coming to the merits of the issue, the grievance of the assessee is disallowance of ₹ 11,78,481 being PF ESI contribution of employees paid beyond the due date u/s. 36(1)(v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -30 of the PF Scheme or before the due date under the provisions of the PF scheme/Act, he deposited the contribution to the PF/ESI fund before the due date contemplated under Section 139(1) of the Act. 17. Section 6 of the PF Act provides for contributions and matters which may be provided for in Schemes. Paragraph-29 of the PF Scheme states what is Contribution . The expression contribution is also defined under the PF Act by Section 2(c) of the PF Act, which means a contribution payable in respect of a member under the Scheme or the contribution payable in respect of an employee to whom the Insurance Scheme applies. If this definition is read with subpara(1) of paragraph-29 in Chapter-V of the PF Scheme, it would mean that the contributions payable by the employer under the Scheme shall be at a particular rate and the contribution payable by the assessee shall be equal to the contribution payable by the employer. 18. Paragraph-30 of the PF Scheme provides for payment of contributions. Sub-para(1) of paragraph30 states that the employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer's contribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s required as an employer to credit 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 giving 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 with effect from April 1, 1984. Therefore, again the provision of section 43B(b) clearly provides that notwithstanding anything contained in the other provisions of the Act including section 36(l) clause (Va) of the Act, even prior to the insertion of that clause the assessee is entitled to get statutory benefit of deduction of payment of tax from the Revenue. If that provision is read along with the first proviso of the said section which was inserted by the Finance Act, 1987, which came into effect from April 1, 1988, the letters numbered as clause (a), or clause (c) or clause (d) or clause (e) or clause (f) are omitted from the above proviso and therefore deduction towards the employees contribution paid can be claimed by the assessee. The Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad/20 18 4. M/s Mahadev Cold Storage vs Jurisdictional AO - ITA.No.41 42/Agra/ 2021 5. M/s Essae Teraoka (P.) Ltd vs DCIT - [2014] 43 taxmann.com 33 (Karnataka) 6. Anand Kumar Jain vs ITO - ITA NO 4192/MUM/2012 Value Momentum Software Services Private Limited vs. DCIT I.T.A. No. 2 197/HYD/20 17 [Assessment Year: 2013-14] dated 19.05.2021; 7. Mohan Ram Chaudhary vs. ITO ITA No. 51 54- 55/Jodh/2021 [Assessment Year: 2018-19] dated 28.09.2021; 8. CIT v. Aimil Ltd. [2010] 321 ITR 508 9. CIT v. Nipso Polyfabriks Ltd. [2013] 350 ITR 326 10. CIT vs. Merchem Ltd. 378 ITR 443 (Kerala)) 11. Sagun Foundry (P.) Ltd. vs. CIT [2017] 291 CTR 557 (Allahabad) 12. Bata India Ltd. vs. DCIT [2020] 180 lTD 464 (Kolkata - Trib.) 13. DCIT vs. Eastern Power Distribution Company of A.P. Ltd. [2016] 160 lTD 432 (Visakhapatnam - Trib.) 14. Nuzivedu Swati Coastal Consortium vs. ITO [2015] 62 taxmann.com 258 (Hyderabad - Trib.) 15. DCIT vs. Teesta Valley Tea Co. Ltd. [2017] 85 taxmann.com 301 (Kolkata - Trib.) 11. The ld.DR contention is that as per sec.43B(b) of the Income-tax Act and explanatory notes to Finance Act 1983, that Employees Contribution was never intende ..... X X X X Extracts X X X X X X X X Extracts X X X X
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