Pawan Kumar Janghu, Gurgaon V. DCIT CPC , Bengaluru

ITA 1600/DEL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9473 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 16-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV PUNDIR
• Keywords: Principle of natural justice; Deemed to accrue or arise in india; Question of law; Set aside
• Section: 244A; 234B; 143(1); 192; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI SMC-1 BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.1600/DEL/2020 ASSESSMENT YEAR : 2018-19 PAWAN KUMAR JANGHU, C/O-CA M R SAHU & ASSOCIATES, H.NO.651, FF, SEC-10A, GURGAON, HARYANA-122001. PAN-AEVPJ8333C VS DCIT, CPC, BENGALURU. APPELLANT RESPONDENT APPELLANT BY SH. M.R.SAHU, CA RESPONDENT BY SH.GAURAV PUNDIR, SR. DR DATE OF HEARING 20.07.2021 DATE OF PRONOUNCEMENT 30 .07.2021 ORDER PER KUL BHARAT, JM : THIS APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMEN T YEAR 2018-19 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), DELHI DAT ED 20.08.2020. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.17,34,620/- MADE IN THE INTIMATION ISSUED UNDER SECTION 143(1) ISSUED BY LD. DCLT, CPC, BANGALORE ON ACCOUNT OF DELAY IN DEPOSIT OF EM PLOYEES CONTRIBUTION TO PF OF RS.14,47,682/- AND EMPLOYEES CONTRIBUTION TO ESI OF RS.2,86,938/- WITHOUT CONSIDERING THE FACT THAT BOTH EMPLOYEES CO NTRIBUTION TO PF & ESI WAS DULY DEPOSITED ON OR BEFORE DUE DATE OF FILLING RETURN U/S 139(1). 2. THAT CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.17,34,620/- UNDER THE HEAD INCOME FROM BUSINESS DONE BY LD. DCIT,CPC, BANGALORE WITHOUT ISSUING ANY SHOW CAUSE NOTICE FOR SUCH ADDITION HEN CE THERE IS DENIAL OF NATURAL JUSTICE THUS ADDITION MADE IN THE INTIMATIO N ISSUED U/S 143(1) ITA NO.1600/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 2 WITHOUT FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE DESERVES TO BE DELETED IN FULL. 3. THAT CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.17,34,620/- UNDER THE HEAD INCOME FROM BUSINESS IN THE INTIMATION ISS UED U/S 143(1) DUE TO DELAY IN DEPOSIT OF EMPLOYEES CONTRIBUTION TO PF AN D ESI UNDER THE RELEVANT ACTS BUT THE SAME WAS DULY DEPOSITED BEFOR E DUE DATE OF FILLING RETURN UNDER SECTION 139(1) OF THE I.T ACT,1961 WIT HOUT APPRECIATING THE FACT THAT SECTION 143(1)(A) DOES NOT PERMIT ADDITIO N ON ACCOUNT OF DEBATEABLE ISSUES WHERE TWO VIEWS ARE POSSIBLE. 4. THAT CIT(A) GROSSLY ERRED IN DISCARDING THE JUDI CIAL PRECEDENTS RELIED UPON BY THE ASSESSEE APPELLANT AND CONFIRM ADDITION ON RELYING UPON THE JUDGMENTS OF DELHI HIGH COURT IN THE CASE OF 'CIT V S. BHARAT HOTELS LTD (2019) 410 ITR 417 (DEI.HC) AND THAT OF DELHI TRIBU NAL IN THE CASE OF' EAGLE TRANS SHIPPING LOGISTICS (INDIA) PVT LTD VS. ACIT (2019) 1781TD 849 (DEL.TRIB)' WITHOUT APPRECIATING THE FACT THAT RATI O OF DECISION IN THE CASE OF 'CIT VS. BHARAT HOTELS LTD (SUPRA) IS NOT APPLICABL E TO THE FACTS OF THE ASSESSEE APPELLANT'S CASE. 5. THAT CIT(A) GROSSLY ERRED IN NOT APPRECIATING TH E FACT THAT DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PF AND ES I UNDER SECTION 36(1)(VA) R.W.S 2(24)(X) WHEN THE AMOUNT WAS DEPOSI TED BEFORE DUE DATE OF FILLING RETURN U/S 139(1) IS NOT FREE FROM CONTROVE RSY AS DIFFERENT HIGH COURTS ACROSS INDIA HAVE TAKEN DIFFERENT VIEWS, THU S ERRED IN NOT APPLYING THE MAJORITY AND FAVOURABLE VIEW OPINED BY THE HIGH COURTS IN THE ASSESSEE-APPELLANT'S CASE. 6. THAT ASSESSEE APPELLANT PRAYS FOR INTEREST UNDER SECTION 244A RELATING TO REFUNDS AS CLAIMED IN THE RETURN OF INC OME. 7. THE ASSESSEE APPELLANT HIMSELF SELF DENIES HIS L IABILITY TOWARDS INTEREST CHARGED U/S 234A, U/S 234B AND U/S 234C AN D PRAYS FOR APPROPRIATE RELIEF. ITA NO.1600/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 3 8. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDIC E TO EACH OTHER. THE APPELLANT MAY BE ALLOWED TO ADD/AMEND/WITHDRAW ANY GROUNDS OF APPEAL AT THE TIME OF HEARING OR AT ANY TIME BEFORE HEARING WITH DUE PERMISSION OF THE HON'BLE TRIBUNAL. 2. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAI NST THE ADDITION OF RS.17,34,620/- ON ACCOUNT OF EMPLOYEES CONTRIBUTIO N TO PF OF RS.14,47,682/- AND EMPLOYEES CONTRIBUTION TO ESI OF RS.2,86,938/- ON ACCOUNT OF DELAY IN DEPOSIT AS PER CONCERNED STATUTES. 3. FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT CENTRALIZED PROCESSING CENTRE (CPC) WHILE PROCESSING THE RETURN OF THE A SSESSEE, DISALLOWED THE CLAIM OF EMPLOYEES CONTRIBUTION TOWARDS PF AND ESI ON AC COUNT OF DELAY IN DEPOSITING THE AMOUNT. 4. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED A PPEAL BEFORE LD.CIT(A) WHO SUSTAINED THE ADDITION ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF AND ESI. 5. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED A PPEAL BEFORE THIS TRIBUNAL. 6. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLOWING THE CLAIM AND MAKING T HE ADDITION. HE SUBMITTED THAT LD.CIT(A) HAD RELIED UPON THE DECISION OF HON BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS BHARAT HOTELS LTD. [2019] 103 TAXMANN.COM 2 95/ 410 ITR 417 (DELHI). HE SUBMITTED THAT THE CO-ORDINATE BENCH OF THIS T RIBUNAL IN THE CASE OF AZAMGARH STEEL & POWER PVT.LTD. VS CPC, BANGLORE IN ITA ITA NO.1600/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 4 NO.1626/DEL/2020 ORDER DATED 31.05.2021 FOLLOWING THE DECISION OF T RIBUNAL IN THE CASE OF DCIT VS DEE DEVELOPMENT ENGINEERS LTD. IN ITA NO.49 59/DEL/2016 ORDER DATED 08.04.2021 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. HE DREW MY ATTENTION TO THE DECISION OF THE TRIBUNAL IN ITA NO.1626/DEL/2020 IN THE CASE OF AZAMGARH STEEL & POWER PVT.LTD. VS CPC ORDER DATED 31.05.2021 WHEREIN LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BHARAT HOTELS LTD. (SUPRA) DID NOT TAKE NOTE OF THE JUDGEMENT RENDERED IN THE CASE OF CIT VS AIMIL LTD. REPORTED IN 321 ITR 508 (DEL.). HE FURTHER SUBMITTED THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS PRO INTERACTIVE SERVICE (INDIA) PVT.LTD. IN ITA NO.983/2018 PRONOUNCED ON 10.09.2018 DECIDED THE ISSUE IN FAVOUR OF THE AS SESSEE. 7. PER CONTRA, LD. SR. DR SUPPORTED THE DECISION OF THE AUTHORITIES BELOW AND RELIED ON THE CASE LAWS SUBMITTED BEFORE LD.CIT (A). 8. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD AND GOING THROUGH THE ORDERS OF THE AUTHORIT IES BELOW. THE HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS PRO INTERACTIVE SERVICE (INDIA) PVT.LTD. (SUPRA) VIDE ORDER DATED 10.09.2018 IN ITA NO.983/ 2018 HELD AS UNDER:- IN VIEW OF THE JUDGEMENT OF THE DIVISION BENCH OF DELHI HIGH COURT IN COMMISSIONER OF INCOME-TAX VERSUS AIMIL LIMITED, (2 010) 321 ITR 508 (DEL) THE ISSUE IS COVERED AGAINST THE REVENUE AND, THEREFORE, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATIO N IN THIS APPEAL. THE LEGISLATIVE INTENT WAS /IS TO ENSURE THAT THE A MOUNT 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 BE LATED PAYMENT OF ITA NO.1600/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 5 EMPLOYEE'S PROVIDENT FUND (EPD) AND EMPLOYEE'S STAT E INSURANCE SCHEME (ESI) AS DEEMED INCOME OF THE EMPLOYER UNDER SECTIO N 2(24)(X) OF THE ACT. 9. I FIND THAT THE DIVISION BENCHES OF THIS TRIBUNA L IN ITA NO.4959/DEL/2016 IN THE CASE OF DCIT VS DEE DEVELOPMENT ENGINEERS LTD. (SUPRA) AND IN THE CASE OF AZAMGARH STEEL & POWER PVT.LTD. VS CPC (SUPRA) HAS FOLLOWED THE JUDGEMENT OF THE HONBLE DELHI HIGH CO URT IN THE CASE OF PR.CIT VS PRO INTERACTIVE SERVICE (INDIA) PVT.LTD. (SUPRA). THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF AZAMGARH STEEL & POWER PVT.LTD. VS CPC (SUPRA) HELD AS UNDER:- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE PRESENT GROUN D IS WITH RESPECT TO DISALLOWANCE OF DELAYED DEPOSIT OF CONTRIBUTION REC EIVED BY THE EMPLOYEES' TOWARDS PROVIDENT FUNDS AND ESI FUND. IT IS AN UNDI SPUTED FACT THAT THERE HAS BEEN DELAY IN THE ACTUAL DEPOSIT OF PAYMENT TO THE APPROPRIATE AUTHORITY BUT AT THE SAME TIME IT WAS ALSO A FACT T HAT ALL THE CONTRIBUTIONS RECEIVED BY THE ASSESSEE FROM ITS EMPLOYEES HAVE BE EN DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME. WE FURT HER FIND THAT IDENTICAL ISSUE AROSE IN THE CASE OF DEE DEVELOPMENT ENGINEER S LTD. (SUPRA) WHEREIN THE CO-ORDINATE BENCH OF TRIBUNAL AFTER CONSIDERING THE DECISION IN THE CASE OF CIT VS. AIMIL LTD. (SUPRA) DECIDED THE ISSUE OF THE ASSESSEE BY OBSERVING AS UNDER: '7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS GROUND NO. 1, THE ASSESSEE COMPANY HAS NOT DEPOSITED THE EMPLOYEES' CONTRIBUTI ON WITHIN THE DUE DATE WHICH IS PRESCRIBED UNDER THE SAID STATUTE I.E. PROVIDENT FUND AND ESIC. THIS ISSUE IS DEALT BY THE HON'BLE D ELHI HIGH COURT IN CASE OF CIT VS. M/S BHARAT HOTELS LTD. 410 ITR 4 17 WHEREIN THE ISSUE IS DECIDED IN FAVOUR OF THE REVENUE, WITHOUT CONSIDERING THE ITA NO.1600/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 6 DECISION OF THE HON'BLE DELHI HIGH COURT IN CASE OF CIT VS. AIMIL LTD. (2010) 321 ITR 508 (DEL.). BUT THE LD. AR RELIED UP ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN CASE OF PR. CIT VS. PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. ITA NO. 983/2018 PRONOUNC ED ON 10.09.2018 WHEREIN THE HON'BLE HIGH COURT DECIDED T HE ISSUE IN FAVOUR OF THE ASSESSEE RELYING UPON THE JUDGMENT OF AIMIL LTD. (SUPRA). THE HON'BLE DELHI HIGH COURT HELD THAT THE LEGISLATIVE INTENT WAS/IS TO ENSURE THAT THE AMOUNT PAID IS ALLOWED AS EXPENDITURE ONLY WHEN PAYMENT IS ACTUALLY MADE. WE DO NOT THINK THAT THE LEGISLATIVE INTENT AND OBJECTIVE IS TO TREAT BELATE D PAYMENT OF EMPLOYEE'S PROVIDENT FUND (EPD) AND EMPLOYEE'S STAT E INSURANCE SCHEME (ESI) AS DEEMED INCOME OF THE EMPLOYER UNDER SECTION 2(24)(X) OF THE ACT. IT IS SETTLED LAW THAT WHEN TW O JUDGMENTS ARE AVAILABLE GIVING DIFFERENT VIEWS THEN THE JUDGMENT WHICH IS IN FAVOUR OF THE ASSESSEE SHALL APPLY AS HELD IN CASE OF VEGE TABLE PRODUCTS LTD. 82 ITR 192 BY THE HON'BLE SUPREME COURT. HENCE , IN LIGHT OF THE LATEST DECISION IN CASE OF PRO INTERACTIVE SERVICE (INDIA) PVT. LTD., THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. HENCE, GROUND NO. 1 IS DISMISSED.' 7. BEFORE US, REVENUE HAS NOT POINTED TO ANY DISTIN GUISHING FEATURE IN THE FACTS OF THE CASE OF DEE DEVELOPMENT ENGINEERS LTD. (SUPRA) AND THAT OF THE ASSESSEE AND FURTHER NO MATERIAL HAS BEEN PLACED BE FORE US TO DEMONSTRATE THAT THE DECISION RENDERED BY THE CO-OR DINATE BENCH OF TRIBUNAL IN THE CASE OF DEE DEVELOPMENT ENGINEERS L TD. (SUPRA) HAS BEEN STAYED/ SET ASIDE/ OVERRULED BY HIGHER JUDICIAL FOR UM. WE THEREFORE, RELYING UPON THE AFORESAID DECISION OF DEE DEVELOPM ENT ENGINEERS LTD. AND FOR SIMILAR REASONS HOLD THAT THE CPC WAS NOT JUSTI FIED IN DISALLOWING THE PAYMENT. WE THEREFORE DIRECT THE DELETION OF ADDITI ON. THUS GROUND OF THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.1600/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 7 10. RESPECTFULLY FOLLOWING THE BINDING PRECEDENTS, I THEREFORE, DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSE E AND DELETE THE ADDITION. THUS, GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRT UAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 30 TH JULY, 2021. SD/- (KUL BHARAT) JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI