Wellman Employment India Private Limited, New Delhi V. DCIT Range-48, New Delhi

ITA 1632/DEL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9079 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 29-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV PUNDIR
• Assessee Lawyers: PRAKASH SINHA
• Keywords: Principle of natural justice; Set aside
• Section: 143(1); 13

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.1632/DEL/2020 ASSESSMENT YEAR : 2017-18 WELLMAN EMPLOYMENT INDIA PVT.LTD., C/O-PRAKASH SACHIN & CO., 13-D, 13 TH FLOOR, ATMA RAM HOUSE, 1-TOLSTOY MARG, NEW DELHI-110002. PAN-AABCW5648J VS DCIT, RANGE-18, NEW DELHI. APPELLANT RESPONDENT APPELLANT BY SH. PRAKASH SINHA, CA RESPONDENT BY SH.GAURAV PUNDIR, SR. DR DATE OF HEARING 20.07.2021 DATE OF PRONOUNCEMENT 06 .08.2021 ORDER PER KUL BHARAT, JM : THIS APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMEN T YEAR 2017-18 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-9, NEW DEL HI DATED 31.07.2020. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND AS PER LAW, THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNE D CIT(A) HAS FAILED TO APPRECIATE THE BUSINESS MODEL OF THE APPELLANT THAT IT IS ONLY A MANPOWER SUPPLIER THROUGH DIFFERENT ORGANISATIONS AND IN TER MS OF EMPLOYEE PROVIDENT FUND ACT 1952 AND AS PER THE LAW, THE APP ELLANT CANNOT BE TERMED AS AN EMPLOYER REQUIRING THE COMPLIANCE OF S ECTION 36(1)(VA) OF THE INCOME TAX ACT 1961. 2. BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND AS PER LAW, THE APPELLANT IS ONLY A CONTRACT MANPOWER SUPPLIER AND THE LIABILITY ITA NO.1632/DEL/2020 ASSESSMENT YEAR : 2017-18 2 | P A GE TOWARDS THE PROVIDENT FUND ACT AND ESI ACT IS WITH THE EMPLOYER IN TERMS OF PF ACT. 3. BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND AS PER LAW, THE STATUTORY LIABILITY TO COMPLY WITH THE PF/ESI A CT WAS WITH THE CLIENT AND NOT ON THE APPELLANT AND THEREFORE THE APPELLAN T IS NOT AN EMPLOYER IN TERMS OF SECTION 36(1)(VA) OF THE INCOME TAX ACT 19 61. 2. FACTS GIVING RISE TO THE PRESENT APPEAL ARE THA T THE ASSESSEE HAD FILED ITS RETURN WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (THE ACT). CENTRALIZED PROCESSING CENTRE (CPC) WHILE PROCESS ING THE RETURN, DISALLOWED THE EXPENDITURE OF THE ASSESSEE AT RS.31,71,449/- C LAIMED IN RESPECT OF EMPLOYEES CONTRIBUTION. 3. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED A PPEAL BEFORE LD.CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED TH E APPEAL BY OBSERVING AS UNDER:- 5.3. IN VIEW OF THE FACTUAL MATRIX OF THE CASE, TH E RECENT JUDICIAL PRECEDENTS OF THE JURISDICTIONAL HIGH COURT AND ITA T RELIED IN THE ABOVE PARAS AND ALSO THE PROVISIONS OF SECTION 36(1)(VA) IN THE INCOME TAX ACT, 1961 WHICH MAKES IT AMPLY CLEAR THAT THE EMPLOYEES CONTRIBUTION TO ESI AND PF BE DEPOSITED BEFORE THE RELEVANT DUE DATES, I AM OF CONSIDERED VIEW THAT THE APPELLANT HAS FAILED TO COMPLY WITH T HE PROVISIONS AS STIPULATED UNDER THE IT ACT, 1961 I.E. THE APPELLAN T HAS FAILED TO DEPOSIT THE EMPLOYEES CONTRIBUTION TO ESI AND PF BEFORE THE DUE DATES. THEREFORE, GROUND NO 1, 2 AND 3 ARE DECIDED IN NEGATIVE TO THE APPELLANT. APPELLANT FAILS IN THESE GROUNDS OF APPEAL. ITA NO.1632/DEL/2020 ASSESSMENT YEAR : 2017-18 3 | P A GE 4. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED T HE PRESENT APPEAL BEFORE THIS TRIBUNAL. 5. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAI NST THE DISALLOWANCE OF EXPENDITURE CLAIMED ON ACCOUNT OF THE EMPLOYEES CO NTRIBUTION TO ESI & EPF. 6. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DUE TO CORONA PANDEMIC, THE EVIDENCES COULD NOT BE FILED BEFORE LD.CIT(A). HE SUBMITTED THAT DURING THE PREVIOUS YEAR UNDER CONSIDERATION, THE ASSESSEE HAD 1475 NUMBER OF MANPOWER WHICH WERE DEPUTED TO THE CLIENT(S) AND IT RECEIVED RS.14,11,000/- TOWARDS SERVICE CHARGES. IT IS STATED THAT LD.CIT( A) DECIDED THE APPEAL AGAINST THE ASSESSEE WITHOUT CONSIDERING THE SUBSEQUENT DEC ISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT AND THE TRIBUNAL. 7. PER CONTRA, LD. SR. DR OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDER OF LD.CIT(A). 8. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE ISSUE FOR CONSIDERATION IN THIS CASE I S WITH REGARD TO ALLOWABILITY OF EMPLOYEES CONTRIBUTION MADE TOWARDS EPF & ESI. CO NSIDERING THE MATERIAL AVAILABLE ON RECORD AND SUBMISSIONS OF THE ASSESSEE , I AM OF THE CONSIDERED VIEW THAT THE ASSESSEE OUGHT TO HAVE BEEN GIVEN OPP ORTUNITY FOR FURNISHING THE RELEVANT EVIDENCES IN THE INTEREST OF PRINCIPLES OF NATURAL JUSTICE. I, THEREFORE, SET ASIDE THE ORDER OF LD.CIT(A) AND RESTORE THE GR OUNDS TO LD.CIT(A) FOR THE DECISION AFRESH AFTER CONSIDERING THE EVIDENCES FUR NISHED BY THE ASSESSEE. ITA NO.1632/DEL/2020 ASSESSMENT YEAR : 2017-18 4 | P A GE THUS, GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRT UAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 06 TH AUGUST, 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