Commissioner Of Income Tax v. M/S Lakhani India Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.325 of 2009 (O&M)Date of decision: 16.11.2009 Commissioner of Income Tax Vs. M/s Lakhani India Ltd. -----Appellant -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE GURDEV SINGH Present:-Ms. Urvashi Dhugga, Standing Counselfor the revenue.for the revenue. ----- ORDER: 1. The revenue has preferred this appeal under Section260A of the Income Tax Act, 1961 (for short, “the Act”) againstthe order dated 3.10.2008 of the Income Tax Appellate Tribunal,Chandigarh Bench ‘D’ in I.T.A. No.2860/DEL/2007 for theassessment year 2003-04, proposing to raise followingsubstantial question of law:- “I. Whether, on the facts and in the circumstancesof the case, the Ld. ITAT is right in law inupholding the order of the Ld. CIT(A) in deletingthe addition of Rs.69,10,329/- made by theAssessing Officer, inter alia, on account ofemployees’ contribution to PF & EC,of the case, the Ld. ITAT is right in law inupholding the order of the Ld. CIT(A) in deletingthe addition of Rs.69,10,329/- made by theAssessing Officer, inter alia, on account ofemployees’ contribution to PF & EC, II. disregarding the fact that the payments weremade beyond the due dates and were to betreated as Income u/s 2(24)x) as they were notallowable u/s 36(va) of the Income Tax Act,1961 in contravention of the decision in the caseof CIT vs. Pamwi Tissues Limited 215 CTR150 (Bom.)?” “Whether, on the facts and in the circumstancesof the case, the Ld. ITAT is right in law inupholding the order of the Ld. CIT(A) in deletingthe addition of Rs.69,89,302/- made by theAssessing Officer on account of employer’scontribution to PF, EPF & EPF withoutappreciating the fact that payments were notmade by the assessee within the prescribed“due dates” by which the assessee was requiredto make payments in contravention of thedecision in the case of CIT vs. Pamwi TissuesLimited 215 CTR 150 (Bom.)?” 2. The assessee claimed deduction in respect ofpayment of contribution towards provident fund, which wasdisallowed on the ground that payment was beyond the stipulateddate. The CIT(A) upheld that claim of the assessee by referringto explanation to Section 43B, read with Explanation to Section36(1) (va) and Section 2(24)(x) of the Act with further observationthat the payment was within the due date, as per circular issuedunder the Employees Provident Funds and MiscellaneousProvisions Act, 1952. This view has been upheld by the Tribunal. 3. We have heard learned counsel for the appellant whosubmits that the payment having been made beyond the duedate, could not be allowed as deduction in view of judgment ofBombay High Court inCIT v. Pamwi Tissues Limited 215 CTR 150. 4. We are unable to accept the submission. Observations of the Tribunal in the regard are as under:- “..... We find that all the payments were made by theassessee within grace period of five days allowedunder the PF Act and hence we are of the consideredopinion that no interference is called for in the order ofLd CIT(A) because this addition was deleted by the LdCIT(A) by following the judgment of Hon’ble MadrasHigh Court rendered in the case of CIT v. Selan Spg.Mills Ltd. As reported 258 ITR 360 wherein it hasbeen held that PF contribution paid within the graceperiod are deductible.” 5. Learned counsel for the appellant submitted that there was no power to condone the delay and in such situation,payment made beyond stipulated period could not be taken intoaccount. Reliance has been placed on judgment of the OrissaHigh Court inRoland Education and Charitable Trustv. ChiefCommissioner of Income Tax and others(2009)309 ITR 50,wherein in absence of power of condonation of delay, entertainingof application under Section 10(23C)(vi) was held not to bemaintainable beyond stipulated period. 5. Learned counsel for the appellant submitted that there was no power to condone the delay and in such situation,payment made beyond stipulated period could not be taken intoaccount. Reliance has been placed on judgment of the OrissaHigh Court inRoland Education and Charitable Trustv. ChiefCommissioner of Income Tax and others(2009)309 ITR 50,wherein in absence of power of condonation of delay, entertainingof application under Section 10(23C)(vi) was held not to bemaintainable beyond stipulated period. 6. This submission has no merit. It is not a case ofcondonation of delay for entertaining application beyondstipulated period, but taking into account the payment made tomeet the liability which had accrued, consistent with theprovisions of Section 43B of the Act. View of the Tribunal isconsistent with the view of judgment of Gauhati High Court inCommissioner of Income Tax v. George Williamson (Assam)Ltd.[2006] 284 ITR 619 against which SLP was dismissed andwhich was followed in judgment of Delhi High Court inCommissioner of Income Tax v. Dharmendra Sharma.[2008]297 ITR 320 with which we respectfully agree. No substantialquestion of law arises. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 16, 2009ashwani ( GURDEV SINGH ) JUDGE