SATISH KUMAR MITTAL, J. - (1.) THE instant appeal filed by the Revenue under s. 260A of the IT Act, 1961 (hereinafter referred to as "the Act"), is Delhi (hereinafter referred to as "the Tribunal"), in ITA No. 2995/Del/2006 in the case of the respondent for the asst. yr. 2001 -02 by raising the following substantial questions of law : "(i) Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal erred in law in confirming the order of the learned CIT(A) who deleted the disallowance made under s. 43B in respect of ESI which were not deposited by the assessee ? (ii) Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal erred in confirming the orders of the learned CIT(A) who deleted the disallowance made under s. 2(24)(x) r/w s. 36(1)(va) of the IT Act, 1961, on account of late payment of employees contribution to provident fund without appreciating the fact that payments were made beyond due dates ? (iii) Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in confirming the order of the learned CIT(A) who deleted the disallowance made by the AO on account of late payment of employer's contribution in terms of the second proviso to s. 43B r/w s. 36(1)(iv). Reliance is placed on the decisions of the Hon'ble Kerala High Court in the case of CIT vs. G.T.N. Textiles Ltd. (2004) 269 ITR 282 (Ker), CIT vs. Jairam and Sons (2004) 187 CTR (Ker) 199 : (2004) 269 ITR 285 (Ker), CIT vs. South India Corporation Ltd. (1999) 157 CTR (Ker) 422 : (2000) 242 ITR 114 (Ker) ? (iv) Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal erred in law in observing that due date as defined in Explanation to s. 36(1)(va) includes grace period also, allowed as per the Provident Fund and ESI Acts -
(2.) THE brief facts of the case are that, vide order passed under s. 154 of the Act the AO, while rectifying his earlier order, disallowed Rs. 46,59,304 on account of PF being paid after due dates and Rs. 57,184 on account of ESI contribution not paid within due date. Consequently, the said amount was added in the taxable income of the assessee. On appeal by the assessee, the CIT(A) deleted the said addition on the ground that the issues were debatable and that all the payments have been made within grace period, while observing as under : "3. In appeal, the CIT(A) allowed the deduction observing as under : 'I have carefully considered the submissions of the learned Authorised Representative and perused the order of rectification under s. 154 of the Act. I am in conformity with the contentions of the learned Authorised Representative. Since the issue is debatable and therefore is not rectifiable under s. 154 of the Act. Moreover, as per the details described by the AO in his certificatory order, all the payment to PF and ESI have been paid within the grace period of five days under the relevant statutory Acts. Therefore, the ratio of the Madras High Court (supra) relied upon by the learned Authorised Representative is well placed. However, it has been also held in the case of CIT vs. Salem Co - operative Spinning Mills Ltd. (2002) 258 ITR 360 (Mad) that PF dues paid within the grace period allowed under the relevant statute are deductible. Further, as admitted by the AO himself, the circular issued under the PF Act allows the payments to be made in the grace period, which the appellant -company has made. In view of the above judgments, the disallowances of Rs. 46,59,304 and Rs. 57,184 were unwarranted and uncalled for and, therefore, stand deleted'".
(3.) THE learned authorised representative for the assessee relied on the following case law : 1) CIT vs. Shri Ganapathy Mills Company Ltd. (2000) 243 ITR 879 (Mad); 2) Kwality Milk Foods Ltd. vs. Asst. CIT (2006) 102 TTJ (Chennai)(SB) 1 3) A.P.L. (India) (P) Ltd. vs. Dy. CIT (2005) 97 TTJ (Mumbai) 187; 4) Addl. CIT vs. Hilton Roulunds Ltd. (2005) 97 TTJ (Del) 490; 5) CIT vs. Madurai District Co -operative Spinning Mills Ltd. (2004) 186 CTR (Mad) 402 : (2003) 131 Taxman 513 (Mad); (6) Marubeni India (P) Ltd. vs. Jt. CIT (2006) 104 TTJ (Del) 911; (7) Asst. CIT vs. Maharashtra Metal Powers Ltd. (2006) 105 TTJ (Nag) 361; (8) Addl. CIT vs. Vestas RRB India Ltd. (2005) 93 TTJ (Del) 144 (9) CIT vs. Salem Co -operative Spinning Mills Ltd. (2002) 258 ITR 360 (Mad). After considering the rival submissions and going through the above rulings relied upon by the learned Authorised Representative, we confirm the order of the learned CIT(A) as the payments have been made during the grace period.;