D.b. Income Tax Appeal v. M/ S.rajasthan State Cooperative Consumers Federation Ltd., Jaipur

Reportable IN THE HIGH COURT OF JUDICATURE FOR RAJASHANAT JAIPUR BENCH, JAIPUR :: JUDGMENT :: D.B. INCOME TAX APPEAL NO.489/ 2008Commissioner of Income Tax, Jaipur-II, JaipurVs.M/ s.Popular Printers, Fateh Tiba, Moti Doongri Road, Jaipur D.B. INCOME TAX APPEAL NO.96/ 2011Commissioner of Income Tax, Jaipur-II, JaipurVs.M/ s.Rajasthan Rajya Sahakari Spining & Ginning Mills Federation Ltd.,Jaipur D.B. INCOME TAX APPEAL NO.127/ 2011Commissioner of Income Tax, Jaipur-II, Jaipur Vs. M/ s.Rajasthan State Cooperative Consumers Federation Ltd., Jaipur 26.03.2015 HON'BLE THE CHI EF JUSTI CE MR. SUNI L AMBW ANIHON'BLE MR. JUSTI CE AJI T SI NGH Mr.Nikhil Simlote on behalf ofMr.R.B.Mathur for the appellant.Mr.Mahendra Gargieya with Ms.Manisha Surana,Mr.Sandeep Taneja for the respondents. * * * * * * * * 1.These Income Tax Appeals filed by the Commissioner of Income Tax, Jaipur-II, Jaipur under Section 260A of the Income Tax Act, 1961were admitted on the question of law, as follows: - “Whether in the facts and circumstances of the case and inlaw the ITAT was justified in confirming the decision of CIT(A) of allowing the delayed payment of employee's PFcontribution and ESI payment and applying the provisions ofsection 43B for it?” 2.We are informed that the question of law is covered by the judgment of Coordinate Bench of this Court dated 06.01.2014renderedinD.B.I n com eTaxAppealNo.1 7 7 / 2 0 1 1( Com m ission er of I n com e Tax Vs. M/ s.St at e Ban k of Bik aner &Jaipu r ) and ot h er con n ect ed cases, in which it was held as follows: -“2 1 . A conjoint reading of the proviso to Section 43-Bwhich was inserted by the Finance Act, 1987 made effectivefrom 01/ 04/ 1988, the words numbered as clause (a), (c), (d), (e) and (f), are omitted from the above proviso and,further more second proviso was removed by Finance Act,2003 therefore, the deduction towards the employer'scontribution, if paid, prior to due date of filing of return canbe claimed by the assessee. In our view, the explanationappended to Section 36(1)(va) of the Act further envisagethat the amount actually paid by the asssessee on or beforethe due date admissible at the time of submitting return ofthe income under Section 139 of the Act in respect of theprevious year can be claimed by the assessee for deductionout of their gross total income. It is also clear that Sec.43Bstarts with a notwithstanding clause & would thus overrideSec.36(1)(va) and if read in isolation Sec.43B wouldbecome obsolete. Accordingly, contention of counsel for therevenue is not tenable for the reason aforesaid thatdeductions out of the gross income for payment of tax atthe time of submission of return under Section 139 ispermissible only if the statutory liability of payment of PF orother contribution referred to in Clause (b) are paid withinthe due date under the respective enactments by theassessees and not under the due date of filing of return.22 . We have already observed that till this provision isbrought in as the due amounts on one pretext or the otherwere not being deposited by the assessees thoughsubstantial benefits had been obtained by them in theshape of the amount having been claimed as a deduction but the said amounts were not deposited. It is pertinent tonote that the respective Act such as PF etc. also providesthat the amounts can be paid later on subject to paymentof interest and other consequences and to get benefitunder the Income Tax Act, an assessee ought to haveactually deposited the entire amount as also to adduceevidence regarding such deposit on or before the return ofincome under sub-section (1) of Section 139 of the IT Act.23 . Thus, we are of the view that where the PF and/ or EPF, CPF, GPF etc., if paid after the due date under respective Act but before filing of the return of income under Section 139(1), cannot be disallowed under Section 43B or under but the said amounts were not deposited. It is pertinent tonote that the respective Act such as PF etc. also providesthat the amounts can be paid later on subject to paymentof interest and other consequences and to get benefitunder the Income Tax Act, an assessee ought to haveactually deposited the entire amount as also to adduceevidence regarding such deposit on or before the return ofincome under sub-section (1) of Section 139 of the IT Act.23 . Thus, we are of the view that where the PF and/ or EPF, CPF, GPF etc., if paid after the due date under respective Act but before filing of the return of income under Section 139(1), cannot be disallowed under Section 43B or under Section 36(1)(va) of the IT Act. 24 .Accordingly, the substantial question of law is answered against the appellant-revenue and in favour ofthe assessee.the assessee. 25 . Consequently, these appeals, being devoid of merit, are hereby dismissed. No order as to costs.” 3.We do not find any good ground to take a different view, on the same questions, on which these appeals were admitted. Thesubstantial question of law is thus answered in favour of theassessees, and against the Department. 4.The Income Tax Appeals are dismissed. The Income TaxDepartment will proceed accordingly. 5.A copy of this judgment will be placed in the connected files. ( AJI T SI NGH) ,J. ( SUNI L AMBW ANI ) , CJ. Skant/ -, Proof Reader Al l t he cor r ect i ons made i n t he j udgment / or der have been i ncor por at edi n t he j udgment / or der bei ng emai l ed. Shashi Kant Gaur ,Pr oof Reader