Yogi Ji Technoequip Pvt Ltd, New Delhi V. DCIT CPC, Bengaluru

ITA 1609/DEL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9456 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 7 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: 22-09-2020
• 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: 234B; 143(1); 192

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.1609/DEL/2020 ASSESSMENT YEAR : 2018-19 YOGI JI TECHNOEQUIP PVT.LTD., C/O-RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-1, NEW DELHI-110034. PAN-AAACY3222D VS DCIT, CPC, BENGALURU. APPELLANT RESPONDENT APPELLANT BY SH.SOMIL AGGARWAL, 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)-9, NEW DEL HI DATED 20.08.2020. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. DCIT/CPC IN MAKING AGGREGATE ADDITION OF RS.1,33,81 6/- ON ACCOUNT OF EMPLOYEE'S CONTRIBUTION TO ESI AND EPF AND THAT TOO BY RECORDING INCORRECT FACTS AND FINDINGS AND WITHOUT OBSERVING THE PRINCI PLES OF NATURAL JUSTICE AND WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCE S OF THE CASE AND LATEST LAW IN THIS REGARD. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. DCIT/CPC IN MAKING AGGREGATE ADDITION OF RS.1,33,816/- ON ACCOUNT OF EMPLOYEE'S CONTRIBUTION TO ESI AND EPF, IS ITA NO.1609/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 2 BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE SAME IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUA L GROUND. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) OUGHT TO HAVE QUASHED THE ORDER U/S 143(1) P ASSED BY LD. DCIT/CPC AS THE JURISDICTION WAS NOT VALIDLY ASSUME D AS PER LAW. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. DCIT/CPC IN CHARGING INTEREST U/S 234A, 234B AND 23 4C OF INCOME TAX ACT, 1961. 2. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS WITH REGARD TO MAKING ADDITION OF RS.1,33,816/- ON ACCOUNT OF EMPLOYEES CONTRIBUT ION TO ESI AND EPF. 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 ESI AND EPF ON A CCOUNT OF DELAY IN DEPOSITING THE AMOUNT AS PER THE RESPECTIVE STATUTE S. 4. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED A PPEAL BEFORE LD.CIT(A) WHO SUSTAINED THE ADDITION ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO ESI AND EPF. 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 ITA NO.1609/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 3 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 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. ITA NO.1609/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 4 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 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 ITA NO.1609/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 5 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 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.1609/DEL/2020 ASSESSMENT YEAR : 2018-19 PAGE | 6 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