Lal Chand Narang, Faridabad V. ITO, Ward-1(4), Faridabad

ITA 1669/DEL/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1397 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 11-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india; Question of law
• Section: 143(1)

Judgement Text

1 | Page IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.1669/Del/2021 [Assessment Year : 2019-20] Lal Chand Narang, Flat No.102, Gracious Tower, Imperial Estate, Sec-82, Bhatola, Faridabad, Haryana. PAN-ACYPN5919R vs ITO, Ward-1(4), Faridabad. APPELLANT RESPONDENT Appellant by Shri Jitender Wadhwa, CA Respondent by Shri Om Prakash, Sr.DR Date of Hearing 24.05.2022 Date of Pronouncement 24.05.2022 ORDER PER KUL BHARAT, JM : This appeal filed by the assessee for the assessment year 2019-20 is directed against the order of Ld. CIT(A), National Faceless Appeal Centre (“NFAC”) dated 24.09.2021. 2. The assessee has raised following grounds of appeal:- 1. “On the facts & Circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [ CIT (A)] is bad, both in the eye of law and on the facts. 2. That Ld. CIT(A) has erred in law and facts in upholding the order of the CPC, Bangalore, u/s 143(1) of the Income Tax Act, 1961, assessing the income at Rs. 47,32,348/- against the returned income of Rs. 20,25,190/-. 3. That having regard to facts and circumstances of the case, the learned CIT(A) has erred in law and facts in confirming the addition of Rs.27,07,158/- u/s 36(I)(va) of income tax act 1961 on account of delayed deposit of employees contribution to Provident Fund and ESI, 2 | Page without appreciating the fact that the appellant deposited the same before the due date of filing of his Income Tax return. 4. That Ld. CIT(A) has erred in law and facts in confirming the addition without considering the submissions made by the appellant on 14-09- 2021 in response to notice dated 03.09.2021. 5. That the appellant prays for leave to add, amend or delete any grounds of appeal.” FACTS OF THE CASE 3. Facts giving rise to the present appeal are that the assessee was an individual and engaged in the business of Labor Contractor, filed its return of income on 03.10.2019 declaring gross total income of Rs.21,10,641/-. Central Processing Centre (“CPC”), Bangalore while processing the return of income u/s 143(1) of the Income Tax Act, 1961 (“the Act”) made an addition of Rs.27,07,158/- on account of employees contribution towards PF/ESI u/s 36(1)(va) of the Act and assessed income at Rs.47,32,348/- on the basis that the same was deposited after due dates, as per the respective Acts. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who confirmed the addition. 5. Now, the assessee is in appeal before this Tribunal. 6. Ld. Sr. DR vehemently submitted that law is clear in this respect and he relied upon the decision of Ld.CIT(A). 7. At the outset, Ld. Counsel for the assessee submitted that issue is squarely covered in favour of the assessee. He relied on various case laws. 3 | Page 8. I have heard the contentions of Ld. authorized representatives of the parties and perused the material available on record and gone through the orders of the authorities below. The issue in this appeal is related to disallowance of expenditure on account of delay in deposit of employees contribution related to PF & ESI. The issue is squarely covered by the judgement of Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. in ITA No.983/2018 [Del.] order dated 10.09.2018 held as under:- “In view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income Tax versus AIMIL Limited, (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.” Therefore, respectfully following the ratio laid down by the Hon’ble Jurisdictional High Court in the above-mentioned binding precedent, I hereby direct the Assessing Officer to delete the disallowance. Thus, grounds raised by the assessee are allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 24 th May, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER 4 | Page * Amit Kumar * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI