AIREF ENGINEERS PRIVATE LIMITED,NEW DELHI V. DCIT- 7(1)(1), NEW DELHI

ITA 444/DEL/2023

AI Insights

The case involves AIREF Engineers Private Limited appealing against the order of the National Faceless Appeal Centre, New Delhi, which pertained to the Assessment Year 2020-21. The primary contention was regarding the addition of Rs.45,95,730, which represented ESI and PF contributions that were allegedly not deposited within the due dates as required by respective Acts. The assessee argued that the adjustments made by the CPC, Bengaluru were without prior intimation and thus were bad in law. The Tribunal agreed that the intimation provided was insufficient and lacked necessary details, leading to the decision to set aside the CIT(A)'s order and remand the case for further verification.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23747 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SHARMA
• Assessee Lawyers: VIJAY KR. SINGLA; AIRIK SINGHAL
• Section: 143(3); 143(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘A’: NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.444/DEL/2023 [Assessment Year 2020-21] AIREF Engineers Private Limited, 117, Tagore Park, Model Town, Delhi-110009 Vs DCIT, Circle-1(1), New Delhi PAN-AADCA8285H Assessee Revenue Assessee by Shri Vijay Kr. Singla, CA & Ms. Airik Singhal, Adv. Revenue by Shri Sanjay Sharma, Sr. DR Date of Hearing 05.12.2024 Date of Pronouncement 04.03.2025 ORDER PER BRAJESH KUMAR SINGH, AM, This appeal by the assessee is directed against the order of National Faceless Appeal Centre, New Delhi, dated 07.02.2023, pertaining to Assessment Year 2020-21. 2. The grounds of appeal reads as under:- “1. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the order passed by the Ld DCIT- CPC Banglore u/s 143(1)/154 without appreciating that the Ld AO has made serious mistake by adding back a sum of Rs.45,95,730/- being ESI+PF deposited on or before the filing of ITR u/s 139. 2 ITA No.444/Del/2023 2. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the order passed by the Ld AO u/s 143(1)/154 as the scope of adjustments in Intimation u/s 143(1) is very limited and no additions can be made for debatable / controversial issues. 3. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the order passed by the Ld DCIT- CPC Banglore u/s 143(1) as not allowing expenditure on ESI/PF u/s 37)1)(b). 4. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the order passed by DCIT-CPC Banglore without appreciating that while making the regular assessment u/s 143(3) no such discrepancy have been noticed and the returned income has been accepted as such. Even the income under intimation u/s 143(1) has been taken as returned income, narrating no additions on account of ESI/PF are warranted. 5. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in not deleting the additions made by Ld AO which was unlawful and made in violation of principles of natural justice; as the due dates as mentioned in Audit Report are either on holidays (National / weekly) and as per General Clauses Act in such case next working day will be the due date. 3. Brief facts of the case: The assessee has filed all the above grounds of appeal with respect to addition of Rs.45,95,724/- being PF and ESI not deposited within the due date of the said respective Acts u/s 143(1)(iv) of the Act intimation dated 18.12.2021. 3.1. At the outset, the Ld. AR submitted that the above adjustment was done by the CPC, Bengaluru without giving a prior intimation about the above proposed adjustments and therefore the said intimation was bad in law and may be quashed. In this regard, he referred to page no.34 of the said intimation, wherein, the details of said intimation to the assessee have been referred. Referring to the same, the ld. AR submitted that no details of the communication sent regarding the proposed adjustment and the time allowed to the assessee has been mentioned. 4. The ld. DR supported the order of the authorities below. 3 ITA No.444/Del/2023 5. We have considered the rival submissions and perused the materials available on record. In view of the proviso to section 143(1), which states that no adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode and further the second proviso states that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case, where no response is received within 30 days of such intimation, such adjustments shall be made. 5.1. The page no.34 of the intimation dated 18.12.2021 is reproduced as under:- 4 ITA No.444/Del/2023 5.2. On its perusal, it is seen that the evidence of intimation about the proposed adjustment of Rs.45,95,724/- under the PF & ESI by the CPC Bengaluru to the assessee has not been mentioned with any specific details i.e. date on which the intimation was sent and the time allowed to the assessee to file its reply. Further, the appropriate column as to whether there was any response received from the assessee or whether the response provided was not acceptable to the said intimation is also not indicated and no reason whatsoever has been indicated for the rejection of the response of the assessee if at all any received from the assessee. However, this plea was not taken by the assessee before the Ld. CIT(A), which goes to the root of the matter of this case and requires verification. Therefore, the order of the ld. CIT(A) is set-aside and restored to his file for necessary verification in view of the above observation and pass a fresh order in accordance with law. Grounds raised by the assessee are allowed for statistical purpose. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 04th March , 2025. Sd/- Sd/- [MADHUMITA ROY] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 04.03.2025. f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ 5 ITA No.444/Del/2023 Copy forwarded to: 1. Assessee 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "