Commissioner Of Income Taxno v. M/S.industrial Security & Intelligence India Pvt. Ltd.,139, Old

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAMTHE HONOURABLE MR.JUSTICE R.SUDHAKARANDTHE HONOURABLE MRS.JUSTICE S.VIMALA Tax Case (Appeal) Nos.585 and 586 of 2015& M.P.No.1 of 2015 Commissioner of Income TaxNo.121, Nungambakkam High Road,Chennai - 600 034. ... Appellant in both T.C.(A)s/Respondent in both TCAs Vs. M/s.Industrial Security & Intelligence India Pvt. Ltd.,139, Old No.59A, 1st Floor,Rengarajapuram High Road,Kodambakkam, Chennai - 600 024. ... Respondent in both T.C.(A)s/Appellant in both TCAs APPEALs under Section 260A of the Income Tax Act against theorder dated 31.10.2014 made in I.T.A.Nos.2048 & 2049/Mds/2014 onthe file of the Income Tax Appellate Tribunal Madras 'B' Bench forthe assessment years 2003-04 and 2004-05 against the Order of theCommissioner of Income Tax(Appeals) II, Chennai dated 06.05.2014 inITA Nos.1031 & 1032/2013-14 and as against the Order of theAssistant Commissioner of Income Tax Co circle II(3), Chennai - 34dated 16.09.2009 for PAN No.AAACI47600. For Appellant : Mr.T.R.Senthil Kumar in both the TCAs Standing Counsel for Income TaxC O M M O N J U D G M E N T(Delivered by R.SUDHAKAR,J.) The above Tax Case (Appeals) are filed by the Revenue asagainst the order passed by the Income Tax Appellate Tribunal forthe assessment years 2003-04 and 2004-05. https://hcservices.ecourts.gov.in/hcservices/ For Appellant : Mr.T.R.Senthil Kumar in both the TCAs Standing Counsel for Income TaxC O M M O N J U D G M E N T(Delivered by R.SUDHAKAR,J.) The above Tax Case (Appeals) are filed by the Revenue asagainst the order passed by the Income Tax Appellate Tribunal forthe assessment years 2003-04 and 2004-05. https://hcservices.ecourts.gov.in/hcservices/ 2. The brief facts of the case are as follows:The respondent/assessee filed its return of income for theassessment years in question. The said returns were processed andwere not selected for scrutiny. Subsequently, the AssessingOfficer noticed that there was escapement of income and hencereopened the assessments under Section 147 of the Income Tax Act byissuing notice under Section 148 of the Income Tax Act. Whilecompleting the re-assessment, the Assessing Officer disallowed theexpenses claimed by way of Employee's contribution to PF and ESIholding that the assessee had not paid the employee's contributionof PF and ESI within the due dates specified under the respectiveAct. Aggrieved by the said order of assessment, the assesseepreferred appeals before the Commissioner of Income Tax (Appeals)challenging the reopening as well as the disallowance. TheCommissioner of Income Tax (Appeals) sustained the order of theassessment, thereby dismissed the appeals. Aggrieved by the same,the assessee preferred further appeals before the Tribunal. TheTribunal relied upon the decision of the Supreme Court in the caseof CIT V. Alom Extrusions Ltd. reported in 319 ITR 306, decision ofthe Delhi High Court in the case of CIT V. Amil Ltd. reported in321 ITR 508 and that of the Co-ordinate Bench of the Tribunal inthe case of M/s.Venkateswara Electrical Industries P. Ltd. V. DCITin ITA Nos.1344, 1345 and 1636/Mds/2014 dated 28.8.2014 held asfollows:"5. Heard both sides. Perused orders of lowerauthorities and the decisions relied on before us. Itis not in dispute that all these payments of providentfund Rs.16,20,571/- and ESI Rs.17,51,490/- were madebeyond the grace period/due date allowed under ProvidentFund & ESI Acts but before due date for filing ofincome-tax return. This issue has been decided infavour of the assessee by various High Courts followingthe decision of the Hon'ble Supreme Court in the case ofCIT Vs. Alom Extrusions Ltd. (319 ITR 306), wherein theHon'ble Supreme Court held that omission of secondproviso to section 43B and amendment of first proviso byFinance Act, 2003 are curative in nature and areeffective retrospectively and thus with effect from1.4.1988 i.e. the date of insertion of first proviso.The co-ordinate Bench of this Tribunal considering asimilar issue in the case of M/s.Venkateswara ElectricalIndustries P. Ltd. Vs. DCIT (supra) following thedecision of Hon'ble Delhi High Court in the case of CITVs. Amil Ltd. (321 ITR 508) held that even the employeescontribution to provident fund is to be allowed asdeduction if it is paid within due date for filing ofreturn. While holding so, the Tribunal observed asunder:- "6. We have heard the submissions made by therepresentatives of both the sides and have perusedthe orders of the authorities below, as well as thejudgments/decisions relied on by the ld. Counselfor the assessee. It is an un-disputed fact thatthere has been delay in remittance of employeescontribution of ESI and Provident Fund in both theAYs i.e., 2008-09 & 2009-10. It is equally un-disputed that the assessee has deposited the amounttowards employees contribution of ESI and ProvidentFund before the due date of filing of return. TheHon'ble Delhi High Court in the case of Cit Vs.Amil Ltd., reported as 321 ITR 508 has held that ifthe assessee had deposited employees contributiontowards Provident Fund and ESI after due date asprescribed under the relevant Act but before thedue date of filing of return under the Income TaxAct, no dis-allowance could be made in view of theprovisions of section 43B as amended by the FinanceAct, 2003. The decision of the Hon'ble Delhi HighCourt has been followed by the co-ordinate bench ofthe Tribunal in the case of JCIT Vs.M/s.S.M.Apparels (P) Ltd. (supra). The Tribunalhas been consistently following the view taken bythe Hon'ble Delhi High Court. Accordingly, we holdthat the assessee is entitled to claim expenditureon employee's contribution towards ESI andProvident Fund for both the AYs. Accordingly, boththe appeals of the assessee are allowed." 6. Respectfully following the above, decision, wedirect the Assessing Officer to delete disallowancesmade under section 43B of the Act for both theseassessment years. The grounds of appeal raised by theassessee are allowed." 3. Aggrieved by the said order of the Tribunal, the Revenue isbefore this Court. 4. Heard learned Standing Counsel appearing for the Revenueand perused the materials placed before this Court. 5. We find that the Tribunal has rightly relied on thedecision of the Supreme Court in the case of CIT V. AlomExtrusions Ltd. reported in 319 ITR 306, whereby, the Supreme Courtheld that omission of second proviso to Section 43B and amendmentto first proviso by Finance Act, 2003 are curative in nature andare effective retrospectively, i.e., with effect from 1.4.1988i.e., the date of insertion of first proviso. The Delhi High Court in the case of CIT V. Amil Ltd. reported in 321 ITR 508 held thatif the assessee had deposited employee's contribution towardsProvident Fund and ESI after due date as prescribed under therelevant Act, but before the due date of filing of return under theIncome Tax Act, no disallowance could be made in view of theprovisions of Section 43B as amended by Finance Act, 2003. 6. In the present case, the assessee had remitted theemployees contribution beyond the due date for payment, but withinthe due date for filing the return of income. Hence, following theabove-said decisions, we find no reason to differ with the findingsof the Tribunal. Accordingly, we find no question of law much lessany substantial question of law arises for consideration in theseappeals. Accordingly, both the Tax Case (Appeals) stand dismissed.No costs. Consequently, M.P.No.1 of 2015 is also dismissed. Sd/- Assistant Registrar(CO) //True Copy// Sub Assistant RegistrarslTo1. The Income Tax Appellate Tribunal Madras 'B' Bench2. The Commissioner of Income Tax (Appeals) II, Chennai.3. The Assistant Commissioner of Income Tax, Co. Circle II(3), Chennai.Tax Case (Appeal) Nos.585 & 586 of 2015 VGI(CO)CA(18/09/2015)