Global Groupware Solutions Limited, Gurgaon V. ITO, Ward-10(1), New Delhi

ITA 1739/DEL/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3477 (ITAT-DELHI)
• Duration Of Justice: 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Assessment Year: 2020-2021
• Appeal Filed On: 01-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HEMANT JAIN
• Keywords: Opportunity of being heard; Principle of natural justice; Retrospective amendment
• Section: 43B; 139; 234B; 143(1); 250; 192; 139(1); 13; 22

Judgement Text

Page 1 of 28 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’: NEW DELHI BEFORE, SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.1700/Del/2022 (ASSESSMENT YEAR 2018-19) Garg Heart Centre & Nursing Home Private Limited 8-9, AGCR Enclave Delhi-110092 PAN-AAACG 0063C Vs. ACIT, Circle-10(1) National Faceless Appeal Centre (NFAC) New Delhi (Appellant) (Respondent) Appellant by Sh. Narendra Kumar Rustogi, Authorized Representative Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1739/Del/2022 (ASSESSMENT YEAR 2020-21) Global Groupware Solutions Limited A-20/16, DLF Phase-1 Gurgaon Haryana-122 002 PAN-AABCG 3483B Vs. Income Tax Officer Ward-10(1) New Delhi-110 002 (Appellant) (Respondent) Appellant by Sh. Ashok Khandelwal, Authorized Representative Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 2 of 28 ITA No.1642/Del/2022 (ASSESSMENT YEAR 2019-20) Publix Realtors and Facilitators Private Limited W-124, Ground Floor South End Sohma Road Gurgaon,Haryana-122 018 PAN-AAHCP 1637N Vs. Income Tax Officer Ward-3(3) Gurgaon (Appellant) (Respondent) Appellant by None Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1653/Del/2022 (ASSESSMENT YEAR 2018-19) M/s Samarpit Suraksha Private Limited B-98, Panchsheel Vihar Malviya Nagar New Delhi-110 017 PAN-AAGCS 4761D Vs. Income Tax Officer Ward-22(2) Delhi (Appellant) (Respondent) Appellant by None Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 3 of 28 ITA No.1666/Del/2022 (ASSESSMENT YEAR 2018-19) Ritu Mukherji C-94, Sector-50, Noida Uttar Pradesh-201 301 PAN-AARPM 1035A Vs. CPC Income Tax Department, Bengaluru-560 500 (Appellant) (Respondent) Appellant by Shri Aman Garg, Advocate Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1629/Del/2022 (ASSESSMENT YEAR 2019-20) Manmohan Raizada 47 Bhagirathi Puram Lane No.3 2 nd Floor, Jakhan, Dehradu Uttarakhand-248 001 PAN-AAWPR 2837E Vs. Jurisdictional Assessing Officer, Ward-43(I) Delhi, Civic Centre New Delhi (Appellant) (Respondent) Appellant by Shri Hemant Jain, Advocate Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 4 of 28 ITA No.1726/Del/2022 (ASSESSMENT YEAR 2018-19) Girdhari Yadav N-51, Nehru Nagar Ghaziabad Uttarpradesh-201 001 PAN-AAHPY 8779R Vs. CPC, Bengaluru Income Tax Officer Ward-2(1)(2) Ghaziabad (Appellant) (Respondent) Appellant by Shri Aman Garg, Advocate Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1767/Del/2022 (ASSESSMENT YEAR 2018-19) Dharamjit Singh C-85, Defence Colony Delhi-110 024 PAN-AMNPS 6371B Vs. AO, CPC Banglore ACIT/DCIT, Circle 52(1) Delhi (Appellant) (Respondent) Appellant by None Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 5 of 28 ITA No.1779/Del/2022 (ASSESSMENT YEAR 2020-21) Virender Pratap Singh E-26, Plot No.144/2 Kh No.21/9, Ground Floor, Block-E Inder Enclave, Phase-2, Delhi-110 086 PAN-AOUPS 9368H Vs. Assistant Director of Income Tax, CPC, Bengaluru (Appellant) (Respondent) Appellant by Ms. Timsy Sharma, Authorized Representative Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1781/Del/2022 (ASSESSMENT YEAR 2018-19) Ansal API Infrastructure Limited 115, Ansal Bhawan 16, Kasturba Gandhi Marg New Delhi-110 001 PAN-AAHCA 0833H Vs. ACIT Circle-2(2) Delhi (Appellant) (Respondent) Appellant by None Respondent by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 6 of 28 ITA No.1725/Del/2022 (ASSESSMENT YEAR 2020-21) ACIT Circle-13(1) New Delhi Vs. M/s Jagatjit Industries Ltd. 4 th Floor Bhandari House 91 Nehru Place Delhi-110 019 PAN-AAACJ 1525E (Appellant) (Respondent) Appellant by Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative (“CIT-DR” for short) Respondent by None ORDER PER BENCH: (A) The captioned appeals filed by the respective assessees/Revenue are hereby disposed off through this consolidated order, for the sake of convenience, as the issue involved in these appeals is common. The grounds of appeal are as under: ITA No.1700/Del/2022 for AY 2018-19 “1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeal) [CIT(A)] is bad both in the eye of law and on facts. ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 7 of 28 2. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in passing the order without providing reasonable opportunity of being heard to the assessee in clear violation of principle of natural justice. 3. (i) On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.3,54,880/- made by the AO(CPC) on account of late deposit of employees’ contribution towards provident fund and ESI Fund (ii) That the above disallowance has been confirmed ignoring the contention of the assessee that employees' contribution towards provident fund and ESI Fund would qualify for deduction even if paid after due date prescribed under Provident Fund Act and ESI Act but before due date of filing of return in view of section 43B of the Income Tax Act. 4. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the addition ignoring the various judicial pronouncements brought on record by the assessee in this regard. 5. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the addition ignoring the clarification in the budget for the year 2021 being effective from Assessment year 2021-22 6. That the appellant craves leave to add, amend or alter any of the grounds of appeal at the time of hearing or before the hearing of Appeal.” ITA No.1739/Del/2022 for AY 2020-21 “Action of the CIT(A) in confirming the action of A.O. in making an addition of Rs.8,67,387/- u/s 36(1)(va) of the I. T. Act 1961 for delayed deposit of employees contribution of EPF and ESI but paid before the due date of filing of return is unjust, illegal, arbitrary and against the facts and circumstances of the case and against the decisions of ITAT in ITA No.1000/Del/2021 dated 25.11.2021 in the appellant’s own case in the immediately preceding assessment year A.Y.2019-20.” ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 8 of 28 ITA No.1642/Del/2022 for AY 2019-20 “1. That the learned CIT (Appeals) has grossly erred both on facts and in law in computing the net income of the appellant in an assessment order for AY; 2019-20 dated 04/05/2022 U/s 250 of the Income Tax Act of Rs. 62,63,219/- against the returned income of Rs. 15,26,173/-. 2. That the AO (CPC) has erred in making the disallowance of Rs. 47,37,046/- received from employees as contribution to any provident fund or any fund set up under ESI & PF Act to the extent not credit to the employees account on or before the due date and has wrongly applied provision of section 2(24)(x) read with section 36(1 )(va) of the Act.in the instant case in arbitrary and mechanical manner, without application of mind. 3. The Learned CIT (Appeals) had failed to distinguish the submission of Assessee and is merely relying on the order of Assessing officer. Department or AO should have act wisely to support the assessee. Each and every assessee should not be looked at as a tax evader. Appellant prays that the order of the Learned CIT (Appeals) is against the principles of natural justice and equity and thus deserves to be quashed. 4. The Learned CIT (Appeals) erred in law and on facts of the case in sustaining the order of Assessing officer. The business nature of the assessee should also be kept in mind and appellate authority should look at the case not from the perspective of department rather they should act as a judge to give required justice to the parties. 5. That the total income assessed and the Income-tax demand created thereon are arbitrary unjust and illegal. At any rate, without prejudice, the same is very excessive It is, therefore, prayed that the impugned addition of Rs. 47,37,046/- be deleted and the appeal be allowed. 6. That the appellant reserves its right to add, amend/modify the grounds of appeal.” ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 9 of 28 ITA No.1653/Del/2022 for AY 2018-19 “1. On the facts and circumstances of the case and in law. The communication of proposed adjustment u/s 143(1 )(a) issued in this case is bad-in-law, illegal, without jurisdiction and, therefore, the said communication u/s 143( 1 )(a) alongwith intimation order passed on the foundation of such communication are liable to be quashed. 2. On the facts and circumstances of the case and in law, the assessment proceedings initiated are contrary to the provisions of law, where the notice not being served properly. No opportunity of being heard given by the Ld. AO. There is clear violation of Principle of Natural Justice and justice denied to assessee by Ld. AO and Ld. CIT(A) and therefore, the assessment proceeding initiated alongwith assessment order passed and Order of Ld CIT (A) are liable to be quashed. 3. On the facts and circumstances of the case and in law, the assessing officer has erred in completing the assessment at income of Rs. 45,93.530/- instead of Rs. 30,94,556/- returned tiled by the assessee. Case is not decided on merits. Ld CIT (A) has also rejected the additional facts & evidences filed by the appellant and passed the order by not considering adjournment request made by the assesse and without giving the proper opportunity of heard, which is violation of constitutionally guaranteed Principle of Natural Justice. 4. On the facts and circumstances of the case and in law, the assessing officer has erred in making addition of Rs. 14,98,971/- on account of late deposit of employee’s contribution. 5. On the facts and circumstances of the case and in law, the addition of Rs. 14,98,971/- made by the assessing officer and correspondingly confirming the same by CIT(A) is beyond the scope of provisions of section 36(1)(va) read with section 43B of the Income Tax Act, 1961. 6. The Ld. CIT(A) has ignored the judgments passed by honorable Delhi High Court, quoted by assessee in its submission and passed the order against the assessee. ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 10 of 28 7. The Ld. CIT(A) erred and took the retrospective effect of amendment made in section 36 (1) (va) and section 43B by Finance Act 2021 and passed the order against the assessee. The aforesaid grounds of appeal are without prejudice to each other. The appellant craves leave to add, alter, modify or delete one or more ground of appeal before or at the time of hearing of appeal.” ITA No.1666/Del/2022 for AY 2018-19 “1. On the facts and circumstances of the case, the order passed by the National Faceless Appeal Centre (NFAC) is bad both in the eye of law and on facts. 2. (i) On the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the disallowance of Rs.27,79,194/- made by the AO(CPC) on account of late deposit of employees’ contribution towards provident fund and employees state insurance Fund. (ii) That the above disallowance has been confirmed ignoring the contention of the assesse that employees’ contribution towards provident fund and ESI Fund would qualify for deduction even if paid after due date prescribed under Provident Fund Act and ESI Act but before due date of filing of return of income in view of section 43B of the Income Tax Act. 3. On the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the addition ignoring the various judicial pronouncements brought on record by the assessee in this regard. 4. On the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the addition ignoring the fact that the amendment made by the Finance Act, 2021 will be applicable prospectively and therefore not applicable in the year under consideration. 5. That the appellant craves leave to add, amend or alter any of the grounds of appeal” ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 11 of 28 ITA No.1629/Del/2022 for AY 2019-20 “1. The Ld. CIT(A) grossly erred both on facts and in law in confirming the intimation u/s 143(1) sent by CPC whereby it processed the return of income of appellant for AY 2019-20 at Rs. 29,13,349/-. 2. The Ld. CIT(A) grossly erred in facts and in law in misreading the provisions of Section of 36(1)(va) r. w. Section 2(24)(x) r. w. Section 43B r.w. various legal decisions, as applicable for AY 2019-20, and upholding the disallowance of Rs. 14,03,812/- on account of late payment of employee contribution to ESIC/EPF. The appellant further craves leave to add, amend, alter, delete, rescind, forgo or withdraw any of the above grounds of appeal either before or during the course of the appellate proceedings.” ITA No.1726/Del/2022 for AY 2018-19 “1. On the facts and circumstances of the case, the order passed by the learned Assessing Officer (CPC) is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned A.O. (CPC) has erred both on facts and in law in passing the order under section 143(1) of the Act without providing reasonable opportunity of being heard to the assessee. 3. On the facts and circumstances of the case, the learned A.O.(CPC) has erred both on facts and in law in making the disallowance by exercising its powers beyond the scope of section 143(1) of the Income Tax Act. 4. On the facts and circumstances of the case, the learned AO(CPC) has erred both on facts and in law in assessing the income at Rs.81,62,920/- as against returned income of Rs.68,65,830/- as claimed by the assessee. 5. (i) On the facts and circumstances of the case, the learned A.O.(CPC) has erred both on facts and in law in making the disallowance of Rs.12,97,093/-on account of employees’ contribution towards recognized provident fund invoking the provision of section 36(1 )(va) of the Act. ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 12 of 28 (ii) That the disallowance has been made ignoring the various judicial pronouncement that employees’ contribution towards provident fund and ESI would qualify for deduction even if paid after due date prescribed under Provident Fund Act / ESI Act but before due date of filing of return. 6. On the facts and circumstances of the case the learned AO has erred both on facts and in law in charging interest under Section 234B and 234C of the Act. 7. That the appellant craves leave to add, amend or alter any of the grounds of appeal.” ITA No.1767/Del/2022 for AY 2018-19 “1. That the CIT(A) has erred in law in sustaining the order passed by the AO, CPC Bengaluru in which he has made the addition of Rs.15,66,558/- pertaining to late deposit of ESI & EPF, even when the same was deposited before the due date of filing the income tax return. 2. That the CIT(A) while confirming the order/intimation passed U/s 143(1), has failed to appreciate that amendment in section 36 (1)(va) is being effective from the A.Y.2021-22 and is thus not applicable to the present assessment year viz. 2018-19” ITA No.1779/Del/2022 for AY 2020-21 “1. That on the facts and in the circumstances of the appellant’s case, the learned National Faceless Appeal Centre erred both in facts and in law in out rightly dismissing the appeal without passing a speaking order that disallowance of Rs.39,04,415/- debited in P&L account on account of crediting employees contribution of PF and ESI in their account after due date as per the said fund under the relevant Act by invoking provisions of section 36(1)(va) of the Income tax Act, 1961 in the intimation issued u/s 143(1) even through such disallowance does not constitute prima facie adjustment under section 143(1)(a). 2. That on the facts and in the circumstances of the appellant’s case, the learned National Faceless Appeal Centre (NFAC) erred both in facts ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 13 of 28 and in law in out rightly dismissing the appeal and upholding the disallowance of expense of Rs.39,04,415/- made by the learned AO, CPC, Bengaluru in the intimation issued u/s 143(1), in violation of principles of natural justice by disregarding the guidelines of Faceless appeal Scheme 2021 to provide opportunity of being heard in personal hearing so as to make oral submissions before the Commissioner (Appeals) through the National Faceless Appeal Centre (NFAC) though specifically requested in the written submission filed before the NFAC. 3. That on the facts and in the circumstances of the appellant’s case, the learned National Faceless Appeal Centre erred both in facts and in law in upholding the disallowance of expense of Rs.39,04,415/- made by the learned AO, CPC, Bengaluru in the intimation issued u/s 143(1) on account of crediting employees contribution of PF and ESI in their account after due date as per the said fund under the relevant Act through deposited before the due date of filing ITR under section 139 of the Income Tax Act by invoking amendment provisions of section 36(1)(va) and 43B of the Income tax Act, 1961 retrospectively, which are applicable prospectively from the AY 2021-22 without appreciating the explanation furnished by the appellant. 4. That the appellant craves leave to add, amend or alter any of the grounds of appeal.” ITA No.1781/Del/2022 for AY 2018-19 “1. That on the facts and circumstances of the case and in law, the Commissioner of Income tax (Appeals) - National Faceless Appeal Centre, Delhi ["the CIT(A) -NFAC"] has erred in upholding the disallowance of Rs.16,07,092/- made under section 36(l)(va) read with section 2(24)(x) of the Income tax Act, 1961 ("the Act") for the reason that the employee's contribution to ESI and PF were deposited late. 1.1 That on the facts and circumstances of the case and in law, the CIT(A)-NFAC has erred in holding that Explanation 2 to section 36(1)(va) and Explanation 5 to section 43B inserted by the Finance Act, 2021 are clarificatory in nature and would apply to pending proceedings. It was not appreciated that the amendment to sections 36(1)(va) and 43B by the Finance Act, 2021 was prospective. ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 14 of 28 1.2 Without prejudice, that on the facts and circumstances of the case and in law, the reasons recorded by the CIT(A)- NFAC have been considered and not accepted in Pr. CIT v. Rajasthan State Beverages Corpn Ltd [2017] 250 Taxman 16 (SC), CIT v. AIMIL Ltd. (2010) 321 ITR 508 (Del), CIT v. M. L. Outsourcing P. Ltd. [ITA No.10/2016 dated 13.1.2016], Pr. CIT v. Pro Interactive Service (India) Pvt. Ltd. [ITA 983/2018 dated 10.9.2018] and Raj Kumar v. ITD, CPC Bengaluru [2022] 136 taxmann.com 244 (Delhi - Trib.). In any case, since there existed two views, the view in favour of the assessee was required to be adopted. That the Appellant craves leave to add, alter, amend or vary any of the ground either at or before the hearing of the appeal.” ITA No.1725/Del/2022 for AY 2020-21 by Revenue “1. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition/disallowance of Rs.2,50,49,705/- u/s 36(1)(va) of the Act, being delayed payment to PF and ESI. 2. That the appellant craves leave to add, alter, amend or forego any ground(s) of appeal raised above at the time of hearing.” (B) In these appeals, the issue in dispute is regarding addition made by way of adjustment made u/s 143(1) of Income Tax Act (“IT Act” for short); amounting to Rs.3,54,880/- in the case of Garg Heart Centre & Nursing Home Pvt. Ltd., Rs.8,67,387/- in the case of Global Groupware Solutions Limited, Rs.47,37,046/-in the case of Publix Realtors and Facilitators Private Limited, Rs.14,98,971/- in the case of Samarpit Suraksha Private Limited, Rs.27,79,194/- in the case of Ritu Mukherji, Rs.14,03,812/- in the ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 15 of 28 case of Manmohan Raizada, Rs.12,97,093/- in the case of Girdhari Yadav, Rs.15,66,558/- in the case of Dharamjit Singh, Rs.39,04,415/- in the case of Virender Pratap Singh, Rs.16,07,092/- in the case of Ansal API Infrastructure Limited and Rs.2,50,49,705/- in the case of M/s Jagatjit Industries Ltd. respectively. Intimations u/s 143(1) were issued by Revenue to the respective assessees, in respect of the aforesaid additions. These amounts are in the nature of payments made by the respective assessees by way of employees’ contribution to PF/ESI. These amounts were deposited by the respective assessees after the specified date prescribed under the relevant laws governing PF/ESI; but before the due date of filing of return of income prescribed u/s 139(1) of IT Act. The aforesaid amounts were added to the respective assessees’ income by Revenue, u/s 143(1) of IT Act, by invoking section 36(1)(va)/section 43B of IT Act. The assessees filed appeal before Ld. Commissioner of Income Tax (Appeals) [“Ld. CIT(A)” for short]. In the respective impugned appellate orders of Ld. CIT(A); the appeal filed by assessee was allowed in the case of M/s ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 16 of 28 Jagatjit Industries Ltd. (ITA No.1725/Del/2022) and in the case of other assessees, the Ld. CIT(A) dismissed the assessee’s appeals. The present appeals before us in the case of M/s Jajatjit Industries Ltd. (ITA No.1725/Del/2022) has been filed by Revenue and the other present appeals before us have been filed by the respective assessees; against the respective impugned appellate orders of Ld. CIT(A). (C) At the time of hearing before us, the Ld. CIT(DR) submitted that the amendments brought to section 36(1)(va) of IT Act (by way of insertion of Explanation-2) and to section 43B of IT Act (by way of insertion of Explanation-5) are retrospective in nature. It was his contention that these amendments being retrospective in nature; the aforesaid additions made u/s 143(1) were justified. Accordingly, he defended these additions. (C.1) The Learned Authorized Representatives (“Ld. ARs”) for the respective assessees contended that the aforesaid amendments to section 36(1)(va) and section 43B were prospective in nature applicable with effect from AY 2021-22; and had no application for ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 17 of 28 the relevant Assessment Years, to which these appeals before us pertain. They also contended that, in any case, the issue was beyond the scope of addition by way of adjustment/intimation u/s 143(1) of IT Act. They submitted that the additions, therefore, deserved to be deleted. (C.1.1) We have heard both sides. We have perused the materials on record. Relevant facts are not in dispute. In all these appeals before us, the employees’ contribution to ESI/Provident Fund, were deposited by the respective assessees after the specified date prescribed under laws governing ESI/Provident Fund. However, these payments were deposited by the respective assessees well before the date of filing of return of Income Tax prescribed under section 139(1) of Income Tax Act. The aforesaid additions have been made to the income of the respective assessees by way of adjustment and intimation u/s 143(1) of Income Tax Act. (C.1.2) The issue before us is whether, the aforesaid additions by way of adjustments and intimation u/s 143(1) of Income Tax Act in respect of payments of Employee’s contribution ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 18 of 28 to ESI/Provident Fund, made by the assessee [payments made after stipulated dates prescribed under relevant laws governing provident fund and ESI, but before due date of filing of return prescribed u/s 139(1) of Income Tax Act] are to be sustained or deleted. We are aware about amendments to section 36(1)(va) and 43B of Income Tax Act, brought into effect by Finance Act, 2021. As regards whether these amendments are prospective in nature and applicable with effect from 01.04.2021 or retrospective in nature having applicability even before 01.04.2021; we are aware of some reported orders of ITAT, passed after the aforesaid amendments were brought in by Finance Act, 2021; in which the issue in dispute for Assessment Years prior to Assessment Year 2021-22 (i.e. for periods before 01.04.2021) has been decided in favour of the assessee and against Revenue. Some such decisions are: Digiqal Solution Services Pvt. Ltd. vs. Assistant Director of Income Tax [2021] 92 ITR (Tribunal) 404 (Chandigarh) for Assessment Year 2019-20 (order dated 4 th October, 2021); Shand Pipe Industry Pvt. Ltd. vs. DCIT (CPC), [2022] 93 ITR (Trib.) 54 (Bangalore) for Assessment Year ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 19 of 28 2018-19 (order dated 27 th Dec., 2021); Mahadev Cold Storage vs. Jurisdictional Assessing Officer [2021] 190 ITD 273 for Assessment Year 2018-19 and 2019-20 in ITA Nos. 41 & 42/Agr/2021 (order date 14.06.2021); Nikhil Mohine vs. DCIT [2022] 93 ITR (Trib.) 658 (Jabalpur) for Assessment Year 2018-19 (order dated 18 th Nov., 2021 of SMC Bench, Jabalpur); Gopalkrishna Aswini Kumar vs. Assistant Director of Income Tax [2022] 192 ITD 562 (Bangalore-Trib.) for Assessment Year 2019-20 (order dated 13.10.2021 in ITA No.359/Bang./2021); Continental Restaurant and Café Co. vs. Income Tax Officer [2021] 91 ITR (Trib.) (S.N.) 60 (Bangalore) for Assessment Year 2019-20 (order dated 11 th October, 2021 of SMC Bench of Bangalore); and TML Business Services Ltd. [2022] 93 ITR (Trib.) (S.N.) 35 (Mumbai) for Assessment Year 2017-18 (order dated 29 th Dec., 2021). In the cases of Continental Restaurant and Café Co. vs. ITO (supra), Nikhil Mohine vs. DCIT (Supra), Shand Pipe Industry Pvt. Ltd. vs. DCIT (supra); Digiqal Solution Services Pvt. Ltd. vs. Assistant Director of Income Tax (supra) and Gopalakrishna v/s ADIT (supra), the different Benches of Income Tax Appellate ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 20 of 28 Tribunal have, in fact, specifically considered the aforesaid amendments brought to Income Tax Act by Finance Act, 2021; and have taken the view that the amendments are prospective in nature (i.e. applicable from AY 2021-12 onwards) having no application for the period prior to 01.04.2021 i.e. for assessment years prior to AY 2021-22. Even if Revenue does not accept the view, that the aforesaid amendments are prospective in nature having no application for Assessment Years prior to Assessment Year 2021- 22; it is clearly established in the light of aforesaid decisions of Income Tax Appellate Tribunal (ITAT); referred to in this paragraph earlier, that the issue whether the aforesaid amendments are prospective or retrospective, is at least debatable and controversial, on which a view in faour of the assessee (that the aforesaid amendments are prospective) can legitimately exist, even if such a view favorable to the assessee is contested by Revenue. (C.1.3) Let us consider the two alternate views, one in favour of the assessee and the other in favour of Revenue; more closely. If the view in favour of the assessee, that the aforesaid amendments are ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 21 of 28 prospective, is accepted; then the decisions of Hon’ble Delhi High Court, in the cases of CIT vs. AIMIL Ltd. 321 ITR 508 (Delhi); and CIT vs. P.M. Electronics Ltd. 313 ITR 161 (Delhi) continue to hold good for Assessment Years to which these appeals before us, pertain. Accordingly, the view taken by Hon’ble Delhi High Court in these cases, that delayed payments of employees contribution of provident fund and ESI [payment made after stipulated dates prescribed under relevant laws governing provident fund and ESI, but before due date of filing of return prescribed u/s 139(1) of Income Tax Act] does not constitute assessee’s income, will continue to hold good for Assessment Years prior to 2021-22 to which these appeals pertain. In such a scenario, the aforesaid additions made to the income of the respective assessees, have no legs to stand; and the same deserve to be deleted. If, however, the contrary view advanced by Revenue is taken, that the aforesaid amendments are retrospective; then the question that will arise is whether such a debatable and controversial view can be invoked for ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 22 of 28 making adjustments u/s 143(1) of Income Tax as per the intimation issued to the assessee u/s 143(1) of Income Tax Act. (C.1.3.1) It is well settled that any adjustments u/s 143(1) of Income Tax Act by way of intimation u/s 143(1) of Income Tax Act, on debatable and controversial issues, is beyond the scope of Section 143(1) of Income Tax Act. In this regard, we respectfully mention the order of Hon’ble Delhi High Court in the case of ACIT vs. Haryana Telecom Pvt. Ltd. 14 taxman.com 122 (Delhi). Similar view was taken by Hon’ble Courts in the cases of George Williamson (Assam) Ltd. vs. CIT & Anr. [2006] 286 ITR 0533 (Gauhati); Tata Yadogawa Ltd. vs. CIT [2011[] 335 ITR 0053 (Jharkhand); God Granites vs. Central Board of Direct Taxes & Ors. [1996] 218 ITR 0298 (Karnataka); Swamy Distributors vs. ACIT & Ors. [2003] 180 CTR 0290; 139 Taxman 0310 (Karnatka), CIT vs. Eicher Goodearth Ltd. [2008] 296 ITR 0125 (Delhi); Smt. Shanta Chopra vs. ITO [2004] 271 ITR 0132 (Delhi); Kvaverner John Brown Engg. (India) (P.) Ltd. vs. ACIT, [2008] 305 ITR 0103 (Supreme Court). In these present appeals before us, the additions have been made by way of ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 23 of 28 adjustments, vide intimations issued under section 143(1) of Income Tax Act. In view of the foregoing precedents, we are of the view that the aforesaid adjustments made by Revenue u/s 143(1) of IT Act were unfair, unjust, and bad in law. For this view, we also respectfully take support from the order of Agra Bench of ITAT, in the case of Mahadev Cold Storage vs. Jurisdictional Assessing Officer (supra). At the very least, Revenue should have given due consideration to the fact that the issue was highly debatable and controversial. As already discussed earlier, adjustments u/s 143(1) of Income Tax Act by way of intimation u/s 143(1) of Income Tax Act, on debatable and controversial issues, is beyond the scope of section 143(1) of Income Tax Act. Revenue was clearly in error, in making the aforesaid adjustments u/s 143(1) of Income Tax Act on a debatable and controversial issue. We would also like to make respectful mention of order of Jabalpur Bench of ITAT in the case of Nikhil Mohine vs. DCIT (supra), in which similar view has been taken. ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 24 of 28 (C.1.4) Further, it is also well settled that retrospective amendment cannot be invoked to make addition by way of adjustment and intimation u/s 143(1) of Income Tax Act. This view was taken by the Hon’ble Supreme Court in the case of CIT vs. Hindustan Electro Graphites Ltd. [2000] 243 ITR 0048 (SC), in which the view of Hon’ble Kolkata High Court in the case of Modern Fibotex India Ltd. & Anr. Vs. DCIT & Ors.[1995] 212 ITR 0496 (Calcutta) was approved. Same view was taken by the Hon’ble Madhya Pradesh High Court in the case of CIT vs. Satish Traders [2001] 247 ITR 0119 (Madhya Pradesh). (C.2) In view of foregoing discussion, we come to the following conclusions: (a) The fact that payments by way of employees’ contribution to provident fund and ESI were made by the respective assessees after stipulated date prescribed under the relevant laws governing provident fund and ESI, but before the due date of filing of return of income prescribed u/s 139(1) of Income Tax Act; is not in dispute. ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 25 of 28 (b) Whether the aforesaid amendments to Income Tax Act by way of Finance Act, 2021 are retrospective or prospective, is debatable and controversial. (c) Adjustments made by Revenue u/s 143(1) of Income Tax Act, whereby aforesaid additions were made to the income of the respective assessee, were unfair, unjust and bad in law. (d) Addition by way of adjustment and intimation u/s 143(1) of Income Tax Act on debatable and controversial issues is beyond the scope of Section 143(1) of Income Tax Act. Revenue was clearly in error in making the aforesaid adjustments. (e) Addition by way of adjustment and intimation u/s 143(1) of Income Tax Act, on the basis of retrospective amendment to Income Tax Act is beyond the scope of Section 143(1) of Income Tax Act. (f) In the present appeals before us, additions of aforesaid amount have been made by way of adjustments and ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 26 of 28 intimation u/s 143(1) of Income Tax Act, on a debatable and controversial issue. (C.2.1) In the light of the foregoing conclusions in paragraph (C. 2) of this order and the preceding discussion, we are of the view that the aforesaid additions by way of adjustment and intimation u/s 143(1) of Income Tax Act, were beyond the scope of Section 143(1) of Income Tax Act. Accordingly, we set aside the impugned appellate orders of Ld. CIT(A) in the cases of Garg Heart Centre & Nursing Home Private Limited, Global Groupware Solutions Limited, Publix Realtors and Facilitators Private Limited, M/s Samarpit Surksha Private Limited, Ritu Mukherji, Manmohan Raizada, Girdhari Yadav, Dharamjit Singh, Virender Pratap Singh and Ansal API Infrastructure Limited respectively and direct the Assessing Officer to delete the additions made by way of adjustments/intimation u/s 143(1) of IT Act. For the same reasons, we uphold the impugned appellate order of Ld. CIT(A) in the case of M/s Jagatjit Industries Ltd. ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 27 of 28 (D) By way of abundant caution, we hereby clarify that we have not expressed any view in this order, on whether the aforesaid amendments brought in by Finance Act, 2021 [whereby Explanation-2 was inserted in Section 36(1)(va) of Income Tax Act and Explanation-5 was inserted in Section 43B of Income Tax Act] are prospective or retrospective. In the light of our decision in foregoing paragraph (C.2.1) of this order; this issue is merely academic in nature; hence not decided. (E) In the result, all these appeals are treated as partly allowed for statistical purposes. This order was already pronounced orally on 22 nd August, 2022 in Open Court, in the presence of Ld. CIT(DR) for Revenue, and the representatives of the respective assessees. Now, this order in writing is signed today on 25/08/2022. Sd/- Sd/- (KUL BHARAT) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:25/08/2022 Pk ITA No.1700 & Ors/Del/2022 & Ors Garg Heart Centre and Nursing Home Pvt. Ltd. & Ors. vs. ACIT Page 28 of 28 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW, DELHI