9911796707
TMI Blog2009 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... the implication, it would be necessary to take note of facts of one appeal. We, accordingly, are stating the facts as they appear in ITA No. 1063/2008. 2. The case relates to the assessment year 2002-03. The respondent assessee had filed its return on 30.10.2002 declaring income at Rs.7,95,430/-. During the assessment proceedings, the Assessing Officer (AO) found that the assessee had deposited employers' contribution as well as employees' contribution towards provident fund and ESI after the due date, as prescribed under the relevant Act/Rules. Accordingly, he made addition of Rs.42,58,574/- being employees' contribution under Section 36(1)(va) of the Act and Rs.30,68,583/- being employers' contribution under Section 43B of the Act. Felt aggrieved by this assessment order, the assessee preferred appeal before the CIT(A), who decided the same vide orders dated 15.7.2005. Though the CIT(A) accepted the contention of the assessee that if the payment is made before the due date of filing of return, no disallowance could be made in view of the provisions of Section 43B, as amended vide Finance Act, 2003, he still confirmed the addition made by the AO on the ground that no documentary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved gratuity fund created by him for the exclusive benefit of his employees under an irrevocable trust. Then comes clause (va) which deals about employees' contribution in the provident fund and ESI and reads as under :- "(va) any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation - For the purposes of this clause, "due date" means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract or service or otherwise;" 6. It would also be appropriate to take note of Section 43B of the Act primarily for the reason that in Vinay Cement (supra) it was this provision which came up for discussion before the Supreme Court and also keeping in view the contention of learned counsel for the Revenue that this judgment would be of no avail to the assessee while discussing the matter under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date on which return is to be filed. The case of the Revenue is that for employees‟ contribution, the 2nd proviso was specifically incorporated and in the present case, as we are concerned with non-deposit of the employees‟ contribution towards provident fund as well as ESI contribution by the employer, only 2nd proviso be looked into. 9. What is sought to be argued is that distinction is to be made while treating the case related to employers‟ contribution on the one hand and employees‟ contribution on the other hand. It was submitted that when employees‟ contribution is recovered from their salaries/wages, that is trust money in the hands of the assessee. For this reason, rigors of law are provided by treating it as income when the assessee receives the employees‟ contribution and enabling the assessee to claim deduction only on actual payment by due date specified under the provisions. 10. Ms. Prem Lata Bansal, learned counsel for the Revenue, thus, argued that the second proviso to Section 43B, as it stood at the relevant time, clearly mentioned that deduction in respect of any sum referred to in clause (b) shall not be allowed unless such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court judgment in Vinay Cement (supra), at this juncture we take note of the discussion of ITAT on this aspect :- "11. We have carefully considered the rival submissions in the light of material placed before us. In the assessment order Ld. AO has categorically stated that what the amount due was for which month in respect of EPF, Family Pension, PF inspection charges and ESI deposits and what were the due dates for these deposits and on which date these deposits were made. The dates of deposits are mentioned between 23rd May 2001 to 23rd April 2002. The latest payment is made on 23rd April 2002 and assessee being limited company had filed its return on 20th October, 2002 which is a date not beyond the due date of filing of the return. Thus, it is clear beyond doubt that all the payments which have been disallowed were made much earlier to the due date of filing of the return. The disallowance is not made by the AO on the ground that there is no proof of making such payment but disallowance is made only on the ground that these payments have been made beyond the due dates of making these payments under the respective statute. Thus, it was not an issue that the payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2003 is retrospective in nature?" 16. These questions were answered by the Division Bench in the following manner :- "7. Having heard the learned counsel for the Revenue, as well as, the assessee, we are of the view that the view taken by the Tribunal deserves to be sustained as it is no longer res integra in view of the decision of the Supreme Court in the case of CIT v Vinay Cement Ltd: 213 ITR 268 which has been followed by a Division Bench of this Court in the case of CIT v. Dharmendra Sharma: 297 ITR 320. 8. Despite the aforesaid judgments, the learned counsel for the Tribunal has contended that in view of the judgment of the Division Bench of the Madras High Court in the case of CIT v. Synergy Financial Exchange Ltd: (2007)288 ITR 366 and that of the Division Bench of the Bombay High Court in the case of CIT v. M/s Pamwi Tissues Ltd: (2008) Taxindiaonline.com 104 (TIOL) the issue requires consideration. According to us, in view of the dismissal of the Special Leave Petition in the case of Vinay Cement (supra) by the Supreme Court by a speaking order, the submission of the learned counsel for the Revenue has to be rejected at the very threshold. The reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to Section 43B has been noticed by a Division Bench of this Court in Dharmendra Sharma (supra). Applying the ratio of the decision of the Supreme Court in Vinay Cement (supra) a Division Bench of this Court dismissed the appeals of the Revenue. In the passing we may also note that a Division Bench of the Madras High Court in the case of CIT v. Nexus Computer (P) Ltd by a judgment dated 18.8.08 passed in Tax Case (A) No.1192/2008 discussed the impact of both the dismissal of the special leave petition in the case of George Williamson (Assam) Ltd (supra) and Vinay Cement (supra) as well as a contrary view of the Division Bench of its own Court in Synergy Financial Exchange (supra). The Division Bench of the Madras High Court has explained the effect of the dismissal of a special leave petition by a speaking order by relying upon the judgment of the Supreme Court in the case of Kunhayammed and Others v. State of Kerala and another: 119 STC 505 at page 526 in Paragraph 40 and noted the following observations:- "It the order refusing leave to appeal is a speaking order, ie., gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
