SECURITY PRINTING AND MINTING CORPORATION OF INDIA LIMITED, DELHI V. ACIT, Circle 22(2), NEW DELHI

ITA 1117/DEL/2023

AI Insights

The case involves the Security Printing and Minting Corporation of India Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, Delhi, arising from the assessment order passed by the Assessing Officer under Section 143(1) of the Income Tax Act, 1961 for the Assessment Year 2019-20. The primary issues in the appeal were the additions made under Section 36(1)(va) concerning employees' contributions to PF and ESIC, and under Section 40A(9) related to contributions to the employees' association for welfare activities as per Maharashtra Labour Laws. The Tribunal found that the Assessing Officer had erred in law and on facts by making these additions without proper verification and directed a fresh examination of the claims.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121643 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-09-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 16-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: Y.K. MAHAGAN
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1117/DEL/2023 Assessment Year 2019-20 Security Printing and Minting Corporation Of India Ltd. 16 th Floor, Jawahar Vypar Bhawan, Janpath, Cannaught Place, Delhi-110001. Vs. ACIT, Circle-22(2) New Delhi TAN/PAN: AAJCS6111J (Appellant) (Respondent) Appellant by: Shri Y.K. Mahagan, Adv. Respondent by: Shri Anuj Garg, Sr.DR Date of hearing: 20 09 2023 Date of pronouncement: 20 09 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c a p ti o n e d a p pe a l h as b e e n fi le d b y t he a ss es se e ag ai n s t t h e or d e r o f t h e C o m mi ssi on er o f I nc o m e T a x (A p pe al s) - N at i o n a l F ac e l es s A pp e a l C e n tr e , D e lh i [ ‘ C IT ( A ) ’ in sh or t ] da t e d 1 7. 02 . 20 2 3 a ri si n g fr o m t h e a sse ss me nt or de r da t ed 1 5. 0 9 . 20 2 0 p a s se d by t h e A sse s si n g O ff i ce r ( A O ) un de r S e c t i on 14 3 (1 ) o f t h e I nc o m e T a x A c t , 19 6 1 ( t h e A c t ) c on c e rn in g A Y 20 19- 20 . 2. T he gr ou n d s o f a p pe a l r ai se d b y t he a sse ss e e r ead a s u n d e r : “ 1 . T h e o r d e r p a s s e d b y L d . C I T ( A ) / N F A C o n t h e f a ct s a n d i n t h e c i r c u m s t a n c e s o f t h e c a s e i s b a d i n l a w . 2 . O n t h e f a c t s a n d i n t h e c i r c u m s t a n c e s o f t h e c a se t h e L d . C I T ( A ) / N F A C h a s e r r e d i n l a w b y n o t a d j u s t m e n t s t h e g r o u n d s r a is e d i n a p p e a l b u t d i s m i s s i n g t h e a p p e a l . T h e L d . C I T (A ) / N F A C h a s e r re d i n l a w b y d i r e c t i n g t h e L d . A O f o r v e r i f i c a t i o n o f i s s u e s o f a d j u s t m e n t m a d e u / s . I.T.A. No.1117/Del/2023 2 1 4 3 ( 1 ) w i t h o u t a n y f u rt h e r c l e a r d i r e c t i o n s . 3 . ( i ) T h e L d . A O ( C P C ) h a s e r r e d i n la w a n d o n f a ct s b y m a k i n g a d j u s t m e n t o f a d d i t i o n o f R s . 1 9 9 ,7 8 , 0 5 4 / - i n t h e r et u r n e d i n c o m e b y i n v o k i n g s e c t i o n 3 6 ( 1 )( v a ) o f I T A c t 1 9 6 1 w h e n e m p lo y e e s s u b s c r i p t i o n to E P F i s d e p o s i t e d b e f o r e t h e d u e d a t e o f f i l i n g t a x r e t u r n p r e s c r i b e d u n d e r s e c t i o n 1 3 9 ( 1 ) o f t h e A c t a n d d u l y c o v e r e d i n f a v o ur o f a p p e l l a n t u / s . 4 3 B ( b ) o f t h e I T A c t , 1 9 6 1 . 4 . ( i i ) T h e L d . A s s e s s i n g O f f i c e r h a s e r r e d i n l a w a n d o n f a c t s i n t h e c i r c u m s t a n c e s o f t h e c a s e b y a d d i n g a s u m o f R s . 1 63 ,5 1 5 / - u / s . 4 0 A ( 9 ) o f t h e I T A c t , 1 9 6 1 . 5 . ( i i i ) T h e L d . A O . h a s e r r e d i n l a w o n t h e f a c t s b y n o t g r a n t i n g i n t e r e s t u / s . 2 4 4 A f o r t h e p e r i o d A p r i l 2 0 1 9 t o M a y 2 0 2 0 fo r w h i c h a p p e l l a n t i s e n t i t l e d w / s 2 4 4 A , t h e r e b y m a k i n g a s h o r t a l l o w a n c e o f i n t e r e s t b y R s . 3 , 2 5 , 9 0 , 9 3 6 / - . ( i v ) T h e a p p e l l a n t a s se s s e e i s a l s o e n t i t l e d f o r i nt e r e s t o n u n p a i d a m o u n t o f R s . 3 , 2 5 ,9 0 , 9 3 6 / - t i l l i t i s a c t u a l l y r e l e a s e d b y v o u c h e r a s p e r s e c t i o n 2 4 4 A a s u n p a i d a n y a m o u n t o f r e f u n d d u e p a r t a k e s t he c h a ra c t e r o f b a s i c t a x r e f u n d d u e t i l l i t ' s r e l e a s e . 6 . ( v ) T h e L d . A O h a s e r r e d i n l a w b y c h a rg i n g i n t er e s t u / s 2 3 4 C o n l e a v e e n c a s h m e n t p r o v i s i o n n o t o f f e r e d t o t a x i n o r i g i n a l r e t u r n b e i n g h i g h l y d e b a t a b l e i s s u e i n f a v o u r t i l l s e t t l e d b y H o n ' b l e Ap e x C o u r t i n A p r i l 2 0 2 0 i n f a v o u r o f r e v e n u e . ” 3. T he C I T( A ) ha s t a k e n i n t o a c c o u n t t h e s u b m i s sio ns m a d e o n be h a l f o f t he a ss es se e a nd r e m a n d e d th e m a t te r b a ck t o t he fi l e o f t he A ss e s si ng O f fi c er fo r v e r i f i c a t i o n o f c l a i m o f t he a ss ess e e v i s -à - vi s t h e a ss e s s me n t m ad e by t h e A sse ssi ng O ff i c e r w it h re sp e c t t o re t ur n o f i nc o m e f il e d w i t h i n t he p ro v i sio ns o f S e ct io n 14 3 (1 ) o f t he A ct . Th e re l e v a n t o p er at i v e p a ra gr a p h o f t h e o rd e r o f t h e CI T ( A ) i s re p r o du ce d h e r e u nd er : “ I n t h e g i v e n f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e , w h e n t h e r e i s a b s o l u t e l y n o c l a r i t y a s t o t h e r e a s o n f o r a d j u s t m en t / a d d i t i o n m a d e i n t h e o r d e r p a s s e d u / s . 1 4 3 ( 1 ) o f t h e A c t b y t h e C P C , a n d t h e a s s e s s e e w a s a p p a r e n t l y n o t e v e n g i v e n a n o p p o r t u n i t y b e f o r e m a k i n g s u c h a d d i t i o n / a d j u s t m e n t , t h e A . O . i s d i r e c t e d t o v e r i f y t h e c l a i m o f t h e a p p e l l a n t v i s - a - v i s t h e a d j u s t m e n t s m a d e b y t h e C P C w i t h r e s p e c t t o r e t u r n o f i n c o m e f i l e d i n a c c o r d a n c e w i t h t h e s e c t io n 1 4 3 ( 1 ) o f t h e A c t . N o n e e d t o e m p h a s i z e t h a t p r o p e r o p p o r t u n i t y o f b e in g h e a r d t o t h e a p p e l l a n t m u s t b e g i v e n . A t t h e s a m e t i m e , t h i s i s a m a t t e r o f r e c o r d t h a t o r i g i n a l r e t u r n s / r e c o r d s a n d b a s i s o f a d j u s tm e n t s a r e n o t w i t h t h i s o f f i c e t o c o m e t o a d e f i n i t e c o n c l u s i o n . I n t he a b s e n c e o f c o m p l e t e r e c o r d s , n o d e f i n i t e i n f e r e n c e c a n b e a r r i v e d a t w it h r e s p e c t t o I.T.A. No.1117/Del/2023 3 g r o u n d s o f a p p e a l r a i s e d b e f o r e t h e u n d e r s i g n e d . A s s u c h , n o t h i n g r e m a i n s h e r e t o b e a d j u d i c a t e d h e r e . H e n c e , t h e a p pe a l i s t r e a t e d a s d i s m i s s e d f o r s t a t i s t i c a l p u r p o s e s w i t h t h e d i r e c t io n s t o t h e A . O . a s m e n t i o n e d a b o v e . ” 4. W h e n t h e ma t te r w a s c al l e d for h e ar i n g, t h e l d . c o u n se l f or t h e a ss es se e su b mi t te d t h a t t w o i s su e s a r e in v ol v e d in t h e p r e se n t ca se ; (i ) a dd i t i o n o f Rs. 1 , 99 , 78 , 0 5 4 / - b y i nv o k i n g Se c t i o n 36( 1) ( v a ) i n re sp e c t o f e mp l o ye es c o n t r i b ut i o n t o PF an d ES I C an d ; (i i ) a dd i t i o n o f R s. 1, 6 3, 51 5 / - u nd er S e c t i on 40 A ( 9) o f the A ct t o w ar ds c o nt r i b u t i o n o f t he a s s ess e e t o i t s e m pl oy e e s ass o c i a t i o n for w e l fa re a c t i v i ti e s a s pe r M a h ar a s htra L a bo u r La w s. 4. 1 T he l d. c ou nse l re f e r r e d t o t h e s u b m i ssi o n s p l ac e d b e f o r e t he Tr i bu n a l s ub mi t t e d t ha t as s e ss e e -c or por at i o n i s a Cen t ra l P u b l ic S ec t o r U n d e r t a k i n g (CP S U ) u n d e r t h e ae g i s o f M in i s tr y o f F in an c e, G ove r n m en t o f In di a. A P ro vi de nt F un d T r us t t it l e d S M P CIL E m pl o ye es P r ov i d e nt F un d T ru st ha s be e n c r ea t e d a nd re g i s t e r e d w it h t he P r ov id en t F un d A u t h or i t y a n d i s a l s o d ul y a p pr o v ed by t h e In c o me Ta x D e p a rt me n t . Th e a s se s se e c o rp or a t i o n c red i t s t he e m pl o ye es c o n t ri b u ti on a s w el l a s e m pl o ye rs c on t r i bu t i o n o f t h e P ro vi de nt F un d t o su c h T ru st e v er y m o n t h o n 1 s t da y o f t h e su b se q u e n t mo nt h. Co ns e q u en tl y , o n t ra n s f e r o f fun ds t o t h e t ru st , t he c o m p l i a n ce o f P r ovi d e n t F u n d L a w s st an d c a rr ie d o ut a n d t h e r e i s no d e l a y i n t ra ns f er ri ng t h e a m o u n t t o th e c r e dit o f P ro v i d e n t F un d T ru s t s o c r e a t e d for t he w e l f a r e o f t h e e m p l oye es. T h e A sse s si n g O ff ic e r h a s pr o c e e de d ba se d on mi st a k e n re p o r t i ng by t he Ta x A u di t or d e ho r s gro un d s r e a l i t ie s. A s a c or ol l a r y, t h e e mp l o y ee s c on t r i b u t io n i s d e e me d t o h a v e b e e n p a i d w i t h i n d u e d a t e a s spe c i f i ed un d e r th e r e l e v a n t st a tu t e. I.T.A. No.1117/Del/2023 4 4. 2 T he l d. c o u ns e l t h u s su b mi t te d t ha t th e i ss ue ma y b e re m a n de d ba c k t o t h e fi l e o f t he A ss e s si n g O f fi c e r fo r v e r i fi c a t io n o f a ll re l ev an t f ac t s. Li k e w i se , b as e d o n t h e w r o n g re po r ti n g i n t he T a x A udi t Re po r t , t he A ss es si n g O f fi c er h a s m a d e d i sa l low a nc e u n d e r S ec t i on 4 0A ( 9 ) on a c c o u n t o f bo n a f i d e e x p e n s es i n c u r re d by w a y o f c on t r i b u t io n t o e m pl o y e e s a ss oc i at i on fo r w e l f a r e ac t i vi t i e s a m ou nt i ng t o Rs. 1, 6 3, 51 5/ - a s p e r th e s t a t ut or y m and a t e o f M ah a r a s ht ra La bo u r L a w s. T he e x pe n se s a re n o t on l y g en u i n e bu t ne c es sa r y t o su st a i n t he b u si n e s s a c t i v i t y a nd t o co m p l y w i t h t he l eg is l a t i v e m a nd a t e . T hu s, S e c t io n 40 A (9) ha s n o a ppl i c at i on . T h e l d. co un se l su b m i t t e d t ha t t h i s i ss ue al so m a y be set as i d e t o t he f i le o f t h e A sse ss i n g O f fi c er fo r ve ri f ic a t i o n. 5. I n th e l ig ht o f t h e su b mi s si o n s m a d e o n be ha l f of th e a s se s se e a nd a ls o h a vi ng r e g ar d t o th e o b se r v a t i o n ma d e i n th e f ir s t a pp el l a te or d e r, w e de e m i t e xp ed ie nt t o r e mi t t he m a t t er b a ck t o th e fi l e o f t he A ss es si ng O ffi c e r fo r e xa mi na t i o n o f fa c ts i n re l a ti o n t o bo t h t h e i ss ue s a n d t he i r de t er mi n a t i o n a fr e s h i n a cc o r d a n c e w i t h l a w . I t s h a ll be op e n t o t he a ss e ss e e t o ad du c e su c h e v i d e n c e s a nd e xpl a n a t io ns a s ma y b e c o n si de r e d t o su pp or t i t s c la i m o f a l l o w abi l i t y o f de d u c t i on un d e r S e ct i on 36 (1 ) ( v a) a n d S e c t i o n 4 0A ( 9) a n d re ve r s al o f a d ju st m e nt c a r r i e d ou t u n de r S e c t i o n 14 3 (1 ) o f th e A c t . 6. I n t he re su lt , t h e a pp e a l o f t h e a sse ss e e i s a l lo w e d fo r st a t i st ic a l pu r p os e s . Order pronounced in the open Court on 20/09/2023 Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /09/2023 Prabhat