Cit v. Spl Industries Ltd

MANMOHAN, J JULY 07, 2010 dk

* THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 7th July, 2010 + ITA No.794/2010 CIT ..... Appellant Through Ms. Suruchi Aggarwal, Adv. versus SPL INDUSTRIES LTD. ..... Respondent Through None. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN 1. Whether reporters of the local papers be allowed to see the judgment? 2. To be referred to the Reporter or not? 3. Whether the judgment should be reported in the Digest? DIPAK MISRA, CJ (ORAL) In this appeal preferred under Section 260A of the Income Tax Act, 1961 (for brevity "the Act") the assail is to the order dated 5.11.2009 passed by the Income Tax Appellate Tribunal, Delhi (for short "the tribunal") in ITA No. 3817/Del/2009 pertaining to the assessment year 2005-06. 2. The facts which are essential to be stated are that the respondent- assessee, which is engaged in the business of textiles processing, and manufacture and export of garments, filed its return for the assessment year 2005-06 declaring a total income of Rs.8,84,23,982/-. The case of the assessee was selected for scrutiny and notice under Section 143(2) was issued. In course of assessment, the assessing officer found that in Form No. 3CD the tax auditor had given and certified the details of contribution deducted from the employees" salary towards the Provident Fund (PF) and the contribution under the Employees State Insurance (ESI). The assessee had not fulfilled its obligation of depositing the Provident Fund contribution deducted from the employees" salary as well as its own contribution within the due date as stipulated under the statute. The total of late deposit of PF and ESI contribution in respect of employee share was found to be to the tune of Rs.75,21,624/-. Considering the submissions put forth before the assessing officer, the said authority repelled the stand of the assessee that the payments were made within the grace period. He referred to Sections 43B, 36(1)(va) and 2(24)(x) of the Income Tax Act and Section 14B of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and expressed the view that there had been late payment of employees" contribution towards PF and ESI an total addition of Rs.75,21,824/- and accordingly by order dated 26.12.2007 added the same to the taxable income. That apart charged interest under Section 234B and 234D of the Act and initiated a proceeding for penalty under Section 271(1)(c) of the Act. 3. Being dissatisfied with the aforesaid order, the assessee preferred an appeal before the CIT(A) who allowed the appeal of the assessee in part holding, inter alia, that the addition of Rs.31,97,525/- has paid during the grace period as regards the Provident Fund dues and a sum of Rs.27,18,354/- has pertaining to the contribution of the Employees State Insurance had been paid within the period including the grace period and hence, the same deserved to be deleted. 4. Being grieved by the said order, the revenue preferred an appeal before the tribunal on the ground that the first appellate authority has deleted the addition made by the assessing officer without appreciating the provisions contained in Section 2(24)(x) read with Section 36(1)(va) of the Act. The tribunal concurred with the order passed by the CIT(A) and expressed the view as follows: "4. We have carefully considered the submission of ld. DR. A finding has been recorded by ld. CIT(A) at page 4 that the contentions of the assessee have been examined with documentary evidence and provisions of the Act. She has further recorded out of addition of Rs.75,21,824/- a sum of Rs.72,46,570/- has been paid within due date ambit. No material has been brought on record to show that these findings of ld. CIT(A) are incorrect rather table reproduced in the assessment order clearly shows that all the payments have been made before the due date of filing the return. Hon"ble Delhi High Court in the case of CIT vs. P.M. Electronics Ltd., 313 ITR 161 (Del.) has held that if the payments are made befor