Appeal details
Counselvise Citation
[2022] 106 COUNSELVISE.COM (IT) 2954 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
11 month(s) 8 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-09-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2019-2020
Appeal Filed On
17-10-2021
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER ITA No. 1466/Del/2021 (Assessment Year : 2019-20) Bablani Aircon Pvt. Ltd. 16/34, Chowki No.2, Sidhora Kalan, Delhi-52 PAN No. AAACB 3444 L Vs. CIT(A), NFAC Delhi (APPELLANT) (RESPONDENT) Assessee by Shri Piyush Agarwal, AR Revenue by Shri Kanav Bali, Sr. D.R. Date of hearing: 26.09.2022 Date of Pronouncement: 26.09.2022 ORDER PER ANIL CHATURVEDI, AM: This appeal filed by the assessee is directed against the order dated 29.09.2021 passed by the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi relating to Assessment Year 2019-20. 2. Brief facts of the case as culled out from the material on record are as under :- 2 3. Assessee is a Private Limited company and filed its return of income on 21.10.2019 for A.Y. 2019-20 declaring total income of Rs.32,42,032/-. In the intimation issued u/s 143(1) of the Act by CPC, Bangalore vide Identification No. CPC/1920/A6/2003047539 dated 06.07.2020, the total income was determined at Rs.34,63,760/-. Aggrieved by the intimation issued u/s 143(1) of the Act, assessee carried the matter before CIT(A) who vide order dated 29.09.2021 in Appeal No.CIT(A), Delhi-2/10091/2020-21 dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds: (i) “On facts and in law, the order passed by learned CIT (Appeal) is bad in law as the same has been passed in utter disregard of principles of equity and natural justice which is contrary to established legal tenets & facts and circumstances of the case to resulting in prejudice to the interest of the appellant and is thus opposed to the principles of equity, natural justice and fair play. (ii) On facts and in law the learned CIT (Appeal) was wholly unjustified in failing to pass a speaking order in as much as he has not appreciated nor rebutted the various submissions which included relevant case laws, clarification & details filed during the course of appellate proceedings before his predecessor as also before him which form part of records. (iii) On facts and in law the learned CIT (Appeal) was wholly unjustified in summarily rejecting and ignoring the fact that assessment order passed by Assessing officer/CPC are bad in law as much as in making the addition to the tune of Rs. 221,728/- on account of disallowance of deduction of employees contribution to provident fund u/s 36(1)(va). Further, the assessment intimation was framed u/s 143(1)(a) and no addition can be made on account of debatable issue and deduction u/s 36(1)(va) is a well established debatable issue. 3 (iv) On facts and in law the learned CIT (Appeal) was wholly unjustified in summarily rejecting and ignoring the fact that assessment order passed by Assessing officer are bad in law as much as in disallowing Rs. 221,728/- on account of disallowance of deduction of employees contribution to provident fund u/s 36(1)(va). (v) On facts and in law the learned CIT (Appeal) was wholly unjustified in summarily rejecting in disallowing a sum of Rs. 221,728/- on account of deduction of employees contribution of provident fund wherein assessee has contributed to provident fund before due date of filing of the income tax return in his case for furnishing return of income u/s 139(1) of the income tax act no disallowance can be made under the income tax act. (vi) On facts and in law the learned CIT (Appeal) was wholly unjustified in disallowing Rs. 221,728/- ignoring the judgment of Hon’ble Supreme Court in the case of CIT vs. Vinay Cement Ltd. 2007 213 CTR (SC) 268 wherein it has been held as under in circumstances the assessee was entitled to claim the benefit in section 43B for that particularly in view of the fact that he has contributed to provident fund and ESI before filing of return. The issue has also been settled by jurisdictional High Court of Delhi in the case of CIT vs AIMIL Limited 2010 321ITR508 Delhi and further in the case of CIT vs SPL Industries ITA No. 794/2010. In the circumstances the amount deposited after due date of Rs. 221,728/- is not disallowable u/s 36(1)(va) of Income Tax Act. (vii) On facts and in law, learned CIT (Appeal) was wholly unjustified in disallowing Rs. 221,728/- ignoring the fact that the amendment made by Finance Act 2021 are only applicable from Assessment year 2021-22 and not for the Asst year 2019-2020 . Refer the notes on clauses introducing the Finance Act bill 2021. It has been held by the jurisdictional ITAT DELHI in Insta Exhibitions P. ltd vs. ADD CIT 03.08.2021 and similar judgement by ITAT Hyderabad and Bombay In case of Value momentum software services P. Ltd. vs. DCIT that the legislature itself has condoned the impugned default before 01.04.2021 as per amendment brought from 01.04.2021. (viii) That having regard to the facts and circumstances of the case, Ld. CIT (Appeal) has failed to spell out reasons for not abiding by the 4 judicial precedents especially the law laid down by the Apex Court in this regard. (ix) On facts and in law learned CIT Appeal has wholly misinterpreted and misunderstood the amendment brought by Finance Act 2021 from 01.04.2021. Explanation inserted to section 43B and 36(va) has prospective effect and same will be applicable only from 01.04.2021. The decision of Hon'able Supreme court and Delhi High court are squarely applicable in the present case. (x) That the appellant denies its liability to be reassessed at total income of Rs. 3,463,760/- against returned income and accordingly denies its liability to pay tax, cess and interest demanded thereon. (xi) That the appellant craves to urge additional ground/grounds, substitute, alter or amend any of the grounds of appeal either before or at the time of the hearing of this appeal including reliance on additional case laws.” 4. Before us, at the outset, Learned AR submitted that though the assessee has raised several grounds but the sole grievance of the assessee is the additions made on account of delay in deposit of employee’s contribution towards provident fund and ESI fund by AO and upheld by CIT(A). 5. Before us, Learned AR submitted that additions has been made in the intimation issued by CPC, Bangalore u/s 36(1)(va) of the Act for the reason that the contribution received towards PF/ESIC by the assessee from its employees was not deposited before the due date. He submitted that though there has been delay in deposit of PF/ESIC Contributions but all the contributions received by the assessee from its employees have been deposited with the appropriate authorities before the filing of 5 return of income by the assessee. He therefore submitted that since the amounts have been deposited before the filing of return of income, no disallowance is called for and for aforesaid proposition, he relied on the decision in the case of Azamgarh Steel & Power vs. CPC in ITA No.1626/Del/2020 dated 31.05.2021 and CIT vs. AIMIL Ltd. [2010] 188 Taxman 265 (Delhi) and various other decisions. 6. Learned DR on the other hand supported the order of lower authorities and also placed reliance on the decision of Delhi Tribunal in the case of Vedvan Consultants Pvt. Ltd. vs DCIT in ITA No.1312/Del/2020 order dated 26.08.2021. He also submitted that the amendment brought out by Finance Act 2021 would be applicable to the present case as by the amendment it has been clarified that provisions of Section 43B of the Act shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of its employees to which the provisions of sub clause (x) of Clause (24) of Section 2 applies. 7. We have heard the rival submissions and perused the material available on record. The issue is no more res-integra. The issue has already been settled in favour of the assessee by various judicial pronouncements by the Tribunal. The Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs. Pro Interactive Service (India) Pvt. Ltd. ITA no. 983/2018 dated 6 10.09.2018 has already taken a view in favour of the assessee by holding as under: “In view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income Tax versus AIMIL Limited, (2010) 321 ITR 508 (Del.) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal. The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee’s Provident Fund (EPD) and Employee’s State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x) of the Act.” 8. As far as reliance by Learned DR on the amendment brought out by Finance Act 2021 is concerned, “notes on clauses” to the Finance Bill 2021 clearly states that the amendment will take effect from 1st April 2021 and will apply in relation to the assessment year 2021-22 and subsequent assessment year. In such a situation, we are of the view that the amendment brought out by Finance Act 2021 does not apply to the assessment year under consideration. 9. Before us, Revenue has not placed any material on record to demonstrate that the aforesaid order cited hereinabove has been overruled/stayed/set aside by higher judicial forum. In view of the aforesaid facts, we are of the view that the AO was not justified in denying the deduction claimed by the assessee on 7 account of late deposit of PF/ESI/EPF, albeit before filing the return of income. Admittedly in the matter, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income. In view of the above, respectfully following the decision of the Hon’ble High Court cited hereinabove, we allow the ground raised by the assessee and direct the AO to delete the addition. 10. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 26.09.2022 Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 26.09.2022 PY* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI
