Alqimi India Private Limited, Gurgaon V. DCIT CPC, Bangalore

ITA 1777/DEL/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2623 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 25-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 2; 143(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1777/DEL/2020 Assessment Year 2018-19 Alqimi India Pvt. Ltd., One Horizon Centre, Golf Course Road, Level-18, DLF Phase-5, Sector-43, Gurgaon, Haryana. v. Deputy Commissioner of Income Tax, CPC. TAN/PAN: AHZPP4577F (Appellant) (Respondent) Appellant by: None Respondent by: Shri Kanav Bali, Sr.DR Date of hearing: 25 07 2022 Date of pronouncement: 27 07 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed at the instance of the assessee against the order of the Co mmissioner of Inco me Tax (Appeals)-I, Ne w Delhi (‘CI T(A) ’ in short) dated 24.08.2020 arising from the intimation order dated 16.10.2019 passed by the Assessing Officer (AO) under Section 143(1) of the Inco me Tax Act, 1961 (the Act) concerning AY 2018-19. 2. As per its grounds of appeal, the assessee has challenged the correctness of disallowance of EPF and ESIC a mounting to Rs.3,87,347/- and Rs. 27,22,071/- under Section 2(24)(x) r.w. Section 36(1)(va) of the Inco me Tax Act. I.T.A. No.1777/Del/2020 2 3. None attended for the assessee. Accordingly, the matter was proceeded ex- parte. 4. We have heard the contentions raised on behalf of the Revenue and perused the material available on record. The issue is no more res integra. The issue has already been settled in favour of the assessee by various judicial pronounce ments b y the Tribunal. The Hon'ble Jurisdictional High Court of Delhi in the case of Pr. CI T v. Pro Interactive Services (India) (P.) Ltd. [IT Appeal No. 98 3 of 2018, dated 10-9-2018] held as under:- " In vi ew o f th e ju d gm ent of t he D iv isi on B en ch o f De lh i Hi gh Co ur t i n C om mi ss i one r o f I nc om e- ta x ver su s A IM IL L im ite d, (20 10 ) 32 1 I TR 5 0 8 (De l. ) t he is su e is co ve re d ag ain s t t he Rev en ue a nd , t he re for e, n o su bs ta nti a l q ue st io n of la w a ris es for c on si de ra ti on i n t hi s ap pe al Th e le gi sl at ive in te nt w as /i s t o e ns ur e tha t t he amou nt p aid is all ow ed as a n e x pen di tu re onl y w h en p ay me nt i s a ct ual ly ma de. We do no t th ink th at t he le gi sl a tiv e i nte nt an d o bj e cti ve is to tre at bel at e d pa ym ent of E m plo ye e' s Pr ov id en t Fun d (EP D ) an d Em pl oye e' s St at e- In su r anc e Sc he me (ES I ) as dee me d i nc om e o f the em pl oy er u n der sec ti on 2 (2 3 )(x) o f th e Act ." 5. As far as reliance by Ld. DR on the a mend ment brought out by Finance Act, 2021 is concerned, "notes on clauses" to the Finance Bill 2021 clearl y states that the a mend ment will take effect fro m 01st April 2021 and will prospectively appl y in relation to the assessment yea r 2021-22 and subsequent assessment ye ar. I n such a situation, we are of the view that the I.T.A. No.1777/Del/2020 3 a mend ment brought out by Finance Act, 2021 does not apply to the assessment ye ar under consideration. 6. Before us, the R evenue has not placed an y materia l on record to de monstrate that the aforesaid order cited hereinabove has been overruled/stayed/set aside by higher judicial foru m. In view of the aforesaid facts, we a re of the view that the AO was not justified in denying the deduction clai med by the assessee on account of late deposit of PF/ESI/EPF , albeit before filing the return of inco me . Ad mittedly, in all the a bove-stated matters, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income . 7. It is also simul taneously notice d that the imp ugned addition has been made while processing the return of income under section 143(1) of the Act. The Co-ordinate Bench of the Tribunal in the case of Kalpesh Synthetics (P.) Ltd. v. Dy . CIT [2022] 137 taxmann.com 475 (Mum. - Trib.) observed that scope of prima facie disallowance under section 143(1) is inherently ver y li mited and only such disallowance can be made under this statutory provision as can be conclusively held to be inadmissible based on material on record. The claim of the assessee for allowability of e mploye e's contribution to PF/ESIC under section 36(1)(va) r.w.s . 2(24)(x) of the Act is backed b y binding judicial precedent of the Hon'ble Jurisdictional High Court and hence such adjustments under section 143(1), af4ne mini mu m, cannot fall in this categor y. Hence on this score also, the adjustments towards e mplo yee s’ contribution to PF/ESIC I.T.A. No.1777/Del/2020 4 resulting in disallowance thereof is not per missible in law. 8. We have proceeded to conclude the issue of allowability of expenses attributable to e mployee p rovident fund and e mplo yee state insurance sche me on the belief that the e mployee 's contributions towards PF & ESI ha ve been deposited before the due date of filing of return of income . However, the Revenue shall be at liberty to seek restoration of the appeal where it is found as a matter of fact that the assessee has failed to deposit the e mplo yee 's c ontribution before the due date of filing of return of income stipulated u/s 139(1) of the Act in accordance with law. In vie w of the above and respectfully following the decision of the Hon'ble Jurisdictional High Court of Delhi cited hereinabove, we allow the appeals filed by the captioned assessees. 9. In the result, captioned appeal of the assessee is allowed ex- parte. Order pronounced in the open Court on 27/07/2022. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /07/2022 Prabhat