MR. NARAYANA NIPPANI RAO, MUMBA V. ADIT, CPC, BANGALORE, KARNATAKA

ITA 1600/MUM/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5435 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 13-09-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 143(1); 139(1); 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, AM & Ms. KAVITHA RAJAGOPAL, JM आयकरअपीलसं./ I.T. A. No. 1600/Mum/ 2021 (निर्धारणवर्ा / Assess ment Year: 2019-20) Mr. Narayana Nippani Rao, 22 Revati Nofra, Near RC Church, Colaba, Mumbai-400 005 बिधम/ Vs. ACIT-CPC, Bangalore, Karnataka-560500 स्थायीलेखासं./जीआइआरसं./PAN N o . AADPR8507L (अपीलाथी/Appellant) : (प्रत्यथी / Respondent) अपीलाथीकीओरसे/ Appellant by : None प्रत्यथीकीओरसे/Respondent by : Shri C. T. Mathews, Ld. DR सुनवाईकीतारीख/ Date of Hearing : 15.03.2022 घोषणाकीतारीख / Date of Pronouncem ent : 31.03.2022 आदेश / O R D E R Per Kavitha Rajagopal, Judicial Member: The present appeal filed by the assessee is against the order passed by Ld. CIT(A) dated 06.08.2021 for the AY 2019- 20. The grounds raised by the assessee are as follows:- 2 I . T . A . N o . 1600/ M u m / 2 0 2 1 Mr. Narayana Nippani Rao 1. The Ld. Commissioner, Appeals ("CIT-A") was not justified in confirming the addition of Rs 13,61,607 made under section 36(1)(va) read with section 2(24)(x) in the intimation issued under section 143(1) by the Ld. Asstt. Director of Income Tax, CPC, Bangaluru ("AO") on account of delay in depositing employees' contribution towards EPF/ESIC of Rs. 13,61,607 ignoring the fact that the appellant had deposited the same before the due date for filing the return of his income under section 139(1) and the deduction was, therefore, allowable under the provisions of section 43 B of the Income Tax Act, 1961. 2. The Ld. CIT-A was not justified in rejecting the appeal of the appellant and confirming the order of the Ld. AO making the said addition, ignoring the decided cases of the Hon'ble Supreme Court, High Courts and Tribunals in favour of the appellant on similar issues. 3. The Ld. CIT-A was not justified in confirming the action of the Ld. AO by holding that the amendments made to the sections 2(24)(x), 36(1)(va) and 43B of the Act by the Finance Act, 2021 were clarificatory and, therefore, retrospective in nature, ignoring the provision of the Memorandum Explaining the Provisions in the Finance Bill, 2021 making it applicable w.e.f. 01/04/2021 i.e. A.Y. 2021-22 and subsequent assessment years. 4. The appellant craves leave to add, amend, modify, and delete any or more grounds of appeal. 3. The brief facts of the case are as follows:- The assessee filed its return of income on 26.09.2019 declaring total income of Rs. 42,45,530/-. The assessee was served with an intimation u/s 143(1) of the I.T. Act thereby assessing the total income at Rs. 56,07,141/- after disallowing Rs. 13,61,607/- u/s 3 I . T . A . N o . 1600/ M u m / 2 0 2 1 Mr. Narayana Nippani Rao 36(1)(va) of the Act on being the delayed deposit of employees contribution to PF and ESI, but before the due date for filing of the return of income. 4. Aggrieved by the intimation u/s 143(1) of the Act, the assessee preferred an appeal before the Ld. CIT(A) who confirmed the disallowance amounting to Rs. 13,61,607/- being the employees contribution to EPF & ESI paid after due date. Further aggrieved by the said order, the assessee is in appeal before us. 5. The brief facts of the appeal are that the assessee is an individual carrying on the business of manpower supply contractor in the name of M/s Nippani Narayana Rao Security Agency. The assessee filed return of income for AY 2019-20 on 26.09.2019 declaring total income of Rs. 42,45,530/- and was assessed with total income of Rs. 56,07,140/-. The addition of Rs. 13,61,607/- being the employee’s contribution towards PF deposited with the authorities after the due date for payment, but the same was paid on or before the due date for filing the return of income. 6. The Ld. AR contended that though there was delay in deposit of PF after the due date for payment, it is pertinent to point out that it was paid before the due date for filing of return. The Ld. DR has not disputed the fact. The Ld. Counsel for the assessee relied on decision of Hon’ble Supreme Court in the case of CIT vs. Alom Extrusions and also Hon’ble Jurisdictional 4 I . T . A . N o . 1600/ M u m / 2 0 2 1 Mr. Narayana Nippani Rao High Court decision in the case of CIT (Central) vs. Ghatge Patil Transports Ltd. wherein it was held that payment made towards contribution of employer’s and employee’s PF and ESI within the due date of filing of return of income by the assessee u/s 139(1) of the Act, is eligible for deduction u/s 43B of the Act. The Ld. DR relied on various other decisions which reiterated the same proposition. 7. Per contra, the Ld. DR relied on the order of the lower authorities. 8. We have heard the authorized representatives of both the parties and perused the material available on record. The substantial issue that is involved in adjudicating the appeal is whether the lower authorities were justified in disallowing the amount of the employee’s contribution to EPF/ESIC of Rs. 13,61,607/- deposited before the due date for filing the return of income u/s 139(1) of the Act. In our considered opinion, we find that it is an undeniable fact that the assessee had deposited the employees contribution to provident fund after the due date, nevertheless the said amount was paid before the due date of filing of the return of income u/s 139(1) of the Act. The assessee’s contention that his case would squarely be covered by the decision of Hon’ble Jurisdictional High Court of Bombay in the case of CIT (Central) vs. Ghatge Patil Transports Ltd. (ITA No. 1002 & 1034 of 2012 dated 14.10.2014) (Bom.) in which the Hon’ble Bombay High Court reiterated the proposition in CIT vs. Alom Extrusions [2009] 319 ITR 306 (SC) and 5 I . T . A . N o . 1600/ M u m / 2 0 2 1 Mr. Narayana Nippani Rao various other decision of Hon’ble Apex Court and Hon’ble High Courts is undisputedly buttressed by his submissions. Furthermore, the delayed payment of employee’s contribution to PF/ESIC is not disallowable as the amendments to section 36(1)(va) and section 43B brought about by the Finance Act, 2021 were to be applied prospectively and only for AY 2021-22 and to the subsequent years. The present appeal pertains to AY 2019-20 and hence the claim of deduction of contribution to PF and ESI u/s 36(1)(va) cannot be denied to the assessee. Resultantly, in the light of the above observations, the disallowance of Rs. 13,61,607/- upheld by the Ld. CIT(A) cannot be sustained and is hereby deleted. 8. In the result, the appeal of the assessee is allowed. Orders pronounced in the open court on 31.03.2022 Sd/- Sd/- (Amarjit Singh) (Kavitha Rajagopal) Accountant Member Judicial Member मुंबई Mumbai;ददनांक Dated : 31.03.2022 Sr.PS. Dhananjay 6 I . T . A . N o . 1600/ M u m / 2 0 2 1 Mr. Narayana Nippani Rao आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. दवभागीयप्रदतदनदध, आयकरअपीलीयअदधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशधिुसधर/ BY ORDER, .उि/सहधयकिंजीकधर (Dy./Asstt.Registrar) आयकरअिीिीयअनर्करण, मुंबई/ ITAT, Mumbai