(Per : Honourable Mr.Justice Ks Jhaveri)
By way of the present appeal, the appellant has challenged the order dated 27.9.2013 passed by the Incometax Appellate Tribunal, Ahmedabad, in I.T.A. No. 371/Ahd/2013 for assessment year 2009-2010 whereby the Tribunal dismissed the appeal. The appellant has raised the following substantial question of law for the consideration of this Court:
"(i) Whether on the facts and circumstances of the case and in law, the ITAT was justified in upholding the deletion of disallowance of ' 19,39,017/u/s 40(a)(ia) of the Income-tax Act, 1961 by the CIT(A) holding that if the TDS payment is made before the due date of filing of the return of income, then the same is allowable as an expenditure, without considering the fact that the relevant portion of the Memorandum explaining the provisions of Finance Bill, 2010 clearly states that the amendment to Section 40(a)(ia) allowing deduction for the payment, on which TDS has been made and paid into Govt. Account before the due date for furnishing the return of income is to take effect retrospectively from 01.04.2010 and will, accordingly, apply in relation to the Assessment Year 201011 and subsequent years?
(ii) Whether on the facts and circumstances of the case and in law, the ITAT was justified in upholding the deletion of disallowance of ' 19,39,017/u/s 40(a)(ia) of the Income-tax Act, 1961 by the CIT(A) holding that if the TDS payment is made before the due date of filing of the return of income, then the same is allowable as an expenditure, without appreciating that the amendment in Section 40(a)(ia) made by the Finance Act, 2010 is applicable retrospectively from 01.04.2010 i.e. A.Y. 2010-11 and, therefore, its retrospective application could not have been extended prior to 01.04.2010 since for that period another retrospective amendment brought in by the Finance Act, 2008 w.e.f. 01.04.2005 was already applicable?
(iii) Whether on the facts and circumstances of the case and in law, the ITAT was justified in upholding the deletion by the CIT(A) of disallowance of ' 19,39,017/- made by the Assessing Officer u/s 40(a)(ia) of the Income-tax Act, holding that if the TDS payment is made before the due date of filing of the return of income, then the same is allowable as an expenditure, without appreciating that the provisions of Section 40(a)(ia) substituted by the Finance Act, 2008 with retrospective effect from 01.04.2005 had not been withdrawn or rescinded by the amendment by Finance Act, 2010 and hence stood rightly applied by the Assessing Officer?
(iv) Whether on the facts and circumstances of the case and in law, the ITAT was justified in upholding the deletion by the CIT(A) of disallowance of employees' contribution towards P.F. and ESIC of ' 3,14,12,313/- and provision for employees' contribution towards P.F. & ESIC of ' 43,88,453/-, relying on the decision of the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. reported in 319 ITR 306 (SC), without appreciating the fact that in the case of Alom Extrusions Ltd. the controversy before the Hon'ble Supreme Court was with respect to employer's contribution as per Section 43B(b) of the Act and not with respect to employees' contribution under Section 36(1)(va) of the Act and, therefore, the Hon'ble Supreme Court had no occasion to consider deduction u/s 36(1)(va) of the Act with respect to employees' contribution?
(v) Whether on the facts and circumstances of the case and in law, the ITAT was justified in upholding the deletion by the CIT(A) of disallowance of employees' contribution towards P.F. and ESIC of ' 3,14,12,313/- and provision for employees' contribution towards P.F. & ESIC of ' 43,88,453/relying on the decision of the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. reported in 319 ITR 306 (SC), without appreciating the fact that in the case of Alom Extrusions Ltd. the only controversy before the Hon'ble Supreme Court was with respect to amendment (deletion) of the Second Proviso to Section 43B of the Income-tax Act, 1961 by the Finance Act, 2003 w.e.f. 01.04.2004 or whether it operates retrospectively w.e.f. 01.04.1989?
(vi) Whether on the facts and circumstances of the case and in law, the ITAT was justified in upholding the deletion by the CIT(A) of disallowance of employees' contribution towards P.F. and ESIC of ' 3,14,12,313/- and provision for employees' contribution towards P.F. & ESIC of ' 43,88,453/relying on the decision of the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. reported in 319 ITR 306 (SC), without appreciating that with respect to the sum received by the assessee from any of his employees to which provisions of subclause (x) of clause (24) of Section 2 apply, the assessee shall be entitled to deduction in computing the income referred to in Section 28 with respect to such sum credited by the assessee to the employees' account in the relevant fund or funds on or before the "due date" mentioned in Explanation to Section 36(1)(va), as held by the Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation reported at [2014] 41 Taxmann.com 100 (Gujarat)?"
2. The facts of the case are that the assessee filed ereturn of income on 29.9.2009 declaring total income of ' 42,25,34,110/-. The said return was processed under Section 143(1) of the Income-tax Act (hereinafter referred to as "the Act"). The case of the assessee was selected for scrutiny and the Assessing Officer passed scrutiny assessment order on 21.12.2011 under Section 143(3) of the Act and computed total income of the assessee at ' 46,38,36,613/-. The Assessing Officer made various additions and disallowances as discussed in the assessment order.
2.1 During the course of assessment proceedings, the Assessing Officer noticed that the assessee had deducted PF & ESIC contribution of employees but had failed to deposit the same in the relevant fund before the due date as prescribed as per respective law. Accordingly, the Assessing Officer had disallowed the sum of ' 3,14,12,313/under Section 2(24)(x) read with Section 36(1)(va). Similarly, the Assessing Officer had disallowed
' 43,88,453/- on account of provision for employee's contribution towards PF and ESIC since the assessee had received the contribution from the employees but failed to deposit within the prescribed time limit.
2.2 Against the said disallowance made by the Assessing Officer, the assessee preferred appeal before the Commissioner of Income-tax (Appeals) who, following the decision of his predecessor in the assessee's own case for preceding year, allowed the appeal of the assessee and deleted the disallowance so made by the Assessing Officer.
2.3 Being aggrieved by the order passed by the CIT(A) deleting the disallowance, the revenue filed appeal before the Income-tax Appellate Tribunal. The Tribunal vide order dated 27.9.2013 dismissed the appeal of the revenue by stating that "there is no fallacy in the findings of the CIT(A) because now this issue is squarely covered by the decisions of ALOM EXTRUSIONS (319 ITR 306) (SC) and P.M. ELECTRONICS (313 ITR 161) (Del)".
2.4 During the course of assessment proceedings, on verification of details of TDS along with the return of income, the Assessing Officer noticed that TDS amount of ' 19,39,017/- was deducted but the same was not deposited within time allowed under Section 200(1) of the Act in the Government Account. Accordingly, the Assessing Officer disallowed the said amount under Section 40(a)(ia) of the Act and added the same to the total income of the assessee.
2.5 Against the said addition, the assessee preferred appeal before the CIT(A) who following the order of Special Bench pronounced in the case of MERLIYN SHIPPING, deleted the addition.
2.6 Against the said order of the CIT (A), the revenue preferred appeal before the Income-tax Appellate Tribunal which was dismissed by the Tribunal by observing that "the issue now stood covered by few orders of the Hon'ble High Court, wherein it is held that if the payment is made before the due date of filing of the return and the TDS deducted has duly been paid within that period then the same is allowable as an expenditure. In view of these orders, we hereby hold that although the decision of MERILYN SHIPPING was followed by ld. CIT(A) is no more good law but otherwise the issue now stood covered in favour of the assessee as per the case law cited (supra)". In view of above, the Revenue is in appeal before this Court.
3. So far as question Nos. (i) to (iii) are concerned, this Court vide order dated 11.8.2014 has held the said questions against the Revenue and in favour of the assessee and the appeal qua the same was dismissed. Therefore, we are concerned with question Nos. (iv) to 2(vi) in the present case.
4. Learned advocate for the appellant Mr. Parikh has contended that the Tribunal has committed error in relying upon the submissions of the assessee and not considering the findings of the Assessing Officer given in the assessment order. He further contended that the Tribunal has committed error in ignoring the judgement of this Court cited by the appellant and dismissing the appeal. In that view of the matter, he submitted that the order of the Tribunal is required to be set aside.
5. We have heard learned advocate Mr. Parikh for the appellant and learned advocate Mr. Jaimin Dave for the respondent assessee. The issue is squarely covered by the decision of this Court in Tax Appeal No. 637 of 2013 and allied matters. Learned advocate Mr. Jaimin Dave has stated that they are not knowing as to whether any appeal is preferred against the said decision and he has stated that other High Courts have taken different views which was referred to in paragraph No. 5.1 of the said order. In that view of the matter, we are not inclined to take a different view than taken by this Court in Tax Appeal No. 637 of 2013 and allied matters. In that view of the matter, we answer question Nos. (iv) to (vi) in favour of the Department and against the assessee. The appeal is allowed to the aforesaid extent.