Indo States Exports, Delhi V. ACIT, Circle-28(1), New Delhi

ITA 1892/DEL/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2048 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 23-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india; Question of law; Liquidation
• Section: 234B; 143(1); 139(1)

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.1892/DEL/2020 ASSESSMENT YEAR : 2018-19 INDO STATES EXPORTS, E-6, KALINDI COLONY, NEW DELHI-110065. PAN-AAAFI1883M VS ACIT, CIRCLE-28(1), NEW DELHI. APPELLANT RESPONDENT APPELLANT BY SH. RAJ KUMAR GUPTA, CA RESPONDENT BY SH. R.K.GUPTA, SR.DR DATE OF HEARING 10 .0 6 .2021 DATE OF PRONOUNCEMENT 30 .0 6 .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 LEARNED CIT(A)-10, NE W DELHI DATED 07.09.2020. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE LD. A.O. CPC ERRED IN LAW AND ON MERIT S IN MAKING ADDITION / ADJUSTMENT OF RS.3,01,631/- FOR THE PF A ND ESIC CONTRIBUTION OF THE EMPLOYEES, DEPOSITED BEYOND THE DUE DATE AS PER PF AND ESIC ACT BUT WITHIN THE TIME ALLOWED TO FILE THE ITR U/S 139(1) AND DEPOSITED BEFORE FILING I.T. RETURN. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE ADD ITION OF RS.3,01,631/- FOR PF AND ESIC CONTRIBUTION OF EMPLO YEES DEPOSITED BEYOND THE DUE DATE AS PER PF AND ESIC ACT BUT WITH IN THE TIME ALLOWED TO FILE THE ITR IS OUTSIDE THE SCOPE OF ADDITION / ADJ USTMENT WHILE PROCESSING ITA NO.1892/DEL/2020 2 | P A GE THE ITR U/S. 143(1) OF THE ACT, ALSO, BECAUSE, MORE SO, THE ISSUE IS HIGHLY DEBATABLE. 3. THAT, WITHOUT PREJUDICE, ON MERITS, ADDITION OF RS.3,01,631/- FOR PF AND ESIC CONTRIBUTION OF EMPLOYEES DEPOSITED BEYOND THE DUE DATE AS PER PF AND ESIC ACT BUT WITHIN THE TIME ALLOWED TO FILE THE ITR IS FULLY ALLOWABLE AND CANNOT BE ADDED BACK. 4. THAT UNDER THE FACTS AND CIRCUMSTANCE NO INTERES T U/S 234B AND C SHOULD HAVE BEEN CHARGE, OTHERWISE ALSO THE CALCULA TION OF INTEREST ARE GROSSLY EXCESSIVE. 2. THE ONLY EFFECTIVE GROUND IS AGAINST THE DISALLO WANCE OF RS.3,01,631/- ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS EPF AND ESI. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AUTHORITIES BELOW WERE NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE IN RESPECT OF EMPLOYEES CONTRIBUTION. HE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE LATEST JUDGEMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF PCIT VS PRO INTERACTIVE SERVICE (INDIA) PVT.LTD. IN ITA NO.983/2018 [DEL.] ORDER DATED 10.09.2018. FURTHER HE CONTENDED THAT THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS BHARAT HOTELS LTD. [2019] 103 TAXMANN.COM 295 (DELH I), CAN NOT BE APPLIED ON THE FACTS OF THE PRESENT CASE. SUBSEQUENTLY, THE HO NBLE HIGH COURT CONSIDERING THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN TH E CASE OF THE CIT VS AIMIL LTD. [2010] 321 ITR 508 (DEL.) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 3. IN THE CONTRARY, LD. DR OPPOSED THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND SUPPORTED THE ORDERS OF AUTHORITIE S BELOW. ITA NO.1892/DEL/2020 3 | P A GE 4. I HAVE HEARD THE RIVAL CONTENTIONS AND GONE THRO UGH THE MATERIAL AVAILABLE ON RECORD. I FIND THAT LD.CIT(A) IN PARA S 6.13 & 6.14 REJECTED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER:- 6.13. IN THE WRITTEN SUBMISSIONS, APPELLANT HAS PL ACED RELIANCE ON VARIOUS DECISIONS, INCLUDING THE DECISION OF HON'BL E HIGH COURT OF DELHI IN THE CASE CIT VS. AIMIL LTD. AND HON'BLE APEX COURT' S DECISION IN THE CASES CIT VS. VINAY CEMENT LTD. AND CIT VS. ALOM EXTRUSIO NS LTD. IN THIS CONNECTION IT IS PERTINENT TO MENTION HERE THAT THE DECISION OF BHARAT HOTELS LTD., DELIVERED BY THE HON'BLE JURISDICTIONAL HIGH COURT IS THE LATEST DECISION, THUS RELIANCE PLACED BY THE APPELLANT ON EARLIER DECISIONS OF THE JURISDICTIONAL HIGH COURT BECAME OF NO HELP TO THE APPELLANT. IT IS FURTHER MENTIONED THAT HON'BLE DELHI ITAT IN THE CASE M/S E AGLE TRANS SHIPPING AND LOGISTICS INDIA PVT LTD VS ACIT, CIRCLE 8(1), N EW DELHI HAS RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CAS E OF M/S BHARAT HOTELS LTD. AND IN THE ABOVE ORDER OF ITAT, FACTS OF CIT V S. ALOM EXTRUSIONS LTD. HAVE BEEN DISTINGUISHED HOLDING THAT THE HON'BLE SU PREME COURT HAS DECIDED THE ISSUE IN ALOM EXTRUSIONS LTD. CASE QUA EMPLOYERS CONTRIBUTION AS PER SECTION 43B(B) OF THE ACT AND NOT QUA EMPLOY EES CONTRIBUTION U/S 36(1)(VA) OF THE ACT. SIMILARLY, IN THE WRITTEN SUB MISSIONS, APPELLANT HAS ALSO PLACED RELIANCE ON THE DECISION OF HON'BLE SUP REME COURT IN THE CASE CIT VS. VINAY CEMENT LTD. AND PRO CIT, JAIPUR-2 VS RAJASTHAN ESTATE BEVERAGE CORPORATION LTD (2017) 84 TAXMANN.COM 185 (SC) IN WHICH THE SLP FILED BY THE DEPARTMENT WAS DISMISSED. IN THIS CONNECTION, IT IS PERTINENT TO MENTION HERE THAT RECENTLY HON'BLE APE X COURT HAS GIVEN A LANDMARK DECISION OBSERVING THAT THE DISMISSAL OF A SLP IN LIMINE SIMPLY IMPLIES THAT THE CASE BEFORE THIS COURT WAS NOT CON SIDERED WORTHY OF EXAMINATION FOR A REASON, WHICH MAY BE OTHER THAN T HE MERITS OF THE CASE. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION O F HON'BLE APEX COURT DATED 01/03/2019 IN CIVIL APPEAL NO. 2432 OF 2019 I N THE CASE KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY INDIA LIMITE D) AND OTHERS VS SHRI ITA NO.1892/DEL/2020 4 | P A GE MAHADESHWARA SAHAKARA SAKKARE KARKHANE LTD. KOLLEGA L (UNDER LIQUIDATION) REPRESENTED BY THE LIQUIDATOR WITH CIV IL APPEAL NO. 2433 OF 2019. THUS, THE RELIANCE PLACED ON THE ABOVE JUDICI AL PRONOUNCEMENTS WHEREIN THE SLP OF THE DEPARTMENT WAS DISMISSED DOE S NOT MAKE IT A CASE THAT SUBSEQUENT ORDERS OF JURISDICTIONAL HIGH COURT OR ITAT CANNOT BE RELIED UPON. 6.14. TAKING INTO CONSIDERATION THE FACTS OF THE CA SE AND LATEST JUDICIAL PRECEDENCE AVAILABLE ON RECORD, I AM OF THE CONSIDE RED VIEW THAT THE APPELLANT IS NOT ENTITLED FOR DEDUCTION U/S 36(1)(V A) IN RESPECT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS EPF AND ESI BEFORE THE DUE DATE OF FILING OF ITR AMOUNTING TO RS.3,01,631/-. THE APPELLANT IS KEEPING GOVT. MONEY IN HIS POSSESSION WHICH IS AGAINST THE SPIRIT OF THE LAW. ALSO THERE WILL BE NO SANCTITY FOR ANY DUE DATE IF THE S AME IS ALLOWED TILL ANOTHER DATE. THE GROUND OF APPEAL TAKEN BY THE APPELLANT IS REJECTED. 5. FROM THE DECISION OF LD.CIT(A), IT IS CLEAR THAT LD.CIT(A) HAS FOLLOWED THE JUDGEMENT RENDERED IN THE CASE OF BHARAT HOTELS LTD. (SUPRA). HOWEVER, THE HONBLE JURISDICTIONAL HIGH COURT IN THE LATER JUDG EMENT DATED 10.09.2018 IN THE CASE OF PCIT VS PRO INTERACTIVE SERVICE (INDIA) PVT.LTD. (SUPRA) 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 CONSIDERATIO N IN THIS APPEAL. THE LEGISLATIVE INTENT WAS/IS TO ENSURE THAT THE AM OUNT PAID IS ALLOWED AS AN EXPENDITURE ONLY WHEN PAYMENT IS ACTU ALLY MADE. WE DO NOT THINK THAT THE LEGISLATIVE INTENT AND OBJECTIVE IS TO TREAT BELATED PAYMENT OF EMPLOYEES PROVIDENT FUND (EPD) AND EMPL OYEES STATE INSURANCE SCHEME (ESI) AS DEEMED INCOME OF THE EMPL OYER UNDER SECTION 2(23)(X) OF THE ACT. ITA NO.1892/DEL/2020 5 | P A GE 6. RESPECTFULLY FOLLOWING THE SAME, I HEREBY DIREC T THE ASSESSING OFFICER TO DELETE THE ADDITION. THUS, GROUNDS RAISED BY THE A SSESSEE IN THIS APPEAL ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIR TUAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 30 TH JUNE, 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