Appeal details
Counselvise Citation
[2022] 106 COUNSELVISE.COM (IT) 6073 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
17-07-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
G
Assessment Year
2018-2019
Appeal Filed On
24-11-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘H’ : NEW DELHI) BEFORE DR. B.R.R.KUMAR, ACCOUNTANT MEMBER AND SH. ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.1899/Del/2020 (Assessment Year : 2018-19) Triple Play Broadband Pvt. Ltd. Kh. No. 540/180 Pole No. 217, Village Bijwasan near Soiwala Kaun, South West Delhi, Delhi-110061 PAN : AADCC1773A Vs. Commissioner of Income Tax (Appeals)-9, New Delhi (APPELLANT) (RESPONDENT) Assessee by Ms. Tripta Jaswani, CA Revenue by Sh. M. Baranwal, Sr. DR Date of hearing: 13.07.2022 Date of Pronouncement: 18.07.2022 ORDER PER ANUBHAV SHARMA, JM: The appeal has been filed by the Assessee against order dated 15.09.2020 in appeal no. 10290/2019-20 in assessment year 2018-19 passed by Commissioner of Income Tax (Appeals)-9, New Delhi (hereinafter referred to as the First Appellate Authority in short ‘Ld. F.A.A.’) in regard to the appeal before it arising out of assessment order dated 16/10/2019 u/s ITA No.1899/Del/2020 Triple Play Broadband P. ltd. 2 143(3) of the Income Tax Act, 1961 (herein after referred as ‘the Act’) by the AO-CPC, Bangalore (hereinafter referred to as the Assessing Officer ‘AO’). 2. The facts in brief are Ld. DCIT, CPC, Banglore had made disallowance u/s 40(a)(ia) of the Act for sum of Rs. 46,417/- on account of inconsistency in the amount disallowable under said section on account of non-compliance with the provisions of chapter XVII-B of the Act and addition of Rs. 61,845/- was made on account of ESI contribution and Rs. 3188 on account of labor welfare fund, to the return income, on the basis that the same were not credited to the employee’s account on or before the due date and the ld. CIT(A) had sustained the additions and now the assessee is in appeal raising following grounds :- “1. That on the facts and in the circumstances of the case, the learned CIT(A)-9, New Delhi, has erred on facts and in law in confirming the adjustment/ addition of Rs. 65,033 (comprising of Rs. 61,845 and Rs. 3,188 on account of ESI contribution and labor welfare fund respectively) to the income returned by the appellant for the reason that such contributions have been deposited by the appellant on or after due date under section 36(1)(va). 2. That on the facts and in the circumstances of the case, the learned CIT(A)-9 New Delhi, has erred on facts and in law in confirming the adjustment/ addition of Rs. 46,417/- to the income returned by the appellant u/s 40(a)(ia). 3. That on the facts and in the circumstances of the case the learned commissioner of Income Tax (Appeals) have erred, on facts and in law, to adjudicate the issue of lack of jurisdiction with the DCIT, CPC Bengaluru to make adjustments under dispute under section 143(1) (iv) of the Income Tax Act, 1961, which plea was taken specifically before him in the written submissions.” ITA No.1899/Del/2020 Triple Play Broadband P. ltd. 3 3. Heard and perused the record. On behalf of the assessee at the time of arguments ground no. 2 was withdrawn by way of endorsement on Form 36, accordingly the same stand dismissed withdrawn. 4. In regard to ground no. 1 and 3 it can be observed that as with regard to the grounds arising out of question of law, on behalf of the assessee it was submitted that the ld. Tax Authorities below have failed to take into consideration the judgments of Hon’ble High courts and also of Jurisdictional Delhi High Court and Co-ordinate Benches of the Tribunal where it is held that the explanation to Clause (va) of Section 36(1) of the Act makes it clear that the amount actually paid by the assessee on or before the due date applicable for submitting of return of income u/s 139 of the Act to the revenue in respect of the previous year can be claimed by the assessee for deduction out of their gross income. 5. On the other hand Ld. DR submitted that the ld. Tax Authorities below have appropriately gone by the provisions of the relevant Sections which were not ambiguous and he submitted that he stands by the order of Ld. Tax Authorities Below. 6. Giving thoughtful consideration to the matter on record and the contentions as raised it can be observed that, admittedly the assessee has deposited the impugned contributions to the PF/ ESI though after due date as prescribed under the relevant provisions of PF / ESI Act but within the time allowed u/s 43B i.e. up to the due date u/s 139(1) for filing of income. 7. Regarding the amendments made through Finance Act, 2021, it is specifically mentioned by the legislature that the amendments are effective ITA No.1899/Del/2020 Triple Play Broadband P. ltd. 4 from 01.04.2021. Further the Memorandum explaining the Provisions in the Finance Bill, 2021 clearly prescribes thus: “These amendments will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years.” 8. Thus, the legislature itself has categorically stated that the amendments shall apply to the assessment year 2021-22 and subsequent assessment years. Therefore these amendments are not applicable to the assessment years preceding the assessment-year 2021-22 i.e. not applicable upto assessment-year 2020-21. This has also been held so in decisions of ITAT Benches including following: (a) ITAT Kolkata in Harendra Nath Biswas Vs. DCIT, ITA No. 186/Kol/2021 for A.Y. 2019-20, order dated 16.07.2021 (b) ITAT Hyderabad in Salzgitter Hydraulics Private Limited Vs. ITO, ITA No. 644/Hyd/2020 for A.Y. 2019-20, order dated 15.06.2021 (c) ITAT Jodhpur in Akbar Mohammad Vs. ACIT, CPC, Bangalore ITA No. 108 &109 / Jodh / 2021 for A.Y. 2018-19 and 2019-20, order dated 31.01.2022 9. The Co-ordinate Bench at Delhi in ITA No. ITA No.5570/Del/2017, M/s. Express Roadway V. ACIT Circle – 8(2) New Delhi, has discussed the relevant law as below : “We find that Hon’ble Delhi High Court in the case of CIT vs.AIMIL Limited (2010) 321 ITR 508 (Del) held has under: “17. We may only add that if the employees ‟ contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Fund Act as well as the ESI Act. ITA No.1899/Del/2020 Triple Play Broadband P. ltd. 5 Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. Insofar as the Income Tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down by the Supreme Court in Vinay Cement (supra).1 18. We, thus, answer the question in favour of the assessee and against the Revenue. As a consequence, the appeals filed by the assessees stand allowed and those filed by the Revenue are dismissed.” 10. We further find that Hon’ble Delhi High Court in the case of SPL Industries vs. CIT (2011) 9 Taxmann.com 195 (Delhi) held as under: “7. It is apt to note that the Division Bench has taken note of the submission advanced by the revenue that the distinction between employers ‟ contribution on the one hand and the employees‟ contribution on the other. On the foundation that when employees‟ contribution was recovered from their salaries / wages that is the trust money in the hands of the assessee and, therefore, recourse of law providing for treating the same as income that the assessee received as the employees ‟ contribution would only enable the assessee to claim deduction only on actual payment made by due date specified under the provisions of the Act. The Bench while dealing with the same has opined thus: "11. Before we delve into this discussion, we may take note of some more provisions of the Act. Section 2(24) of the Act enumerates different components of income. It, inter alia, stipulates that income includes any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees ‟ State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees. It is clear from the above that as soon as employees contribution towards provident fund or ESI is received by the assessee by way of deduction or otherwise from the salary / wages of the employees, it will be treated as 'income' at the hands of the assessee. It clearly follows therefrom that if the assessee does not deposit this contribution with provident fund/ESI authorities, it will be taxed as income at the hands of the assessee. However, on making deposit with the concerned ITA No.1899/Del/2020 Triple Play Broadband P. ltd. 6 authorities, the assessee becomes entitled to deduction under the provisions of Section 36(1)(va) of the Act. Section 43B(b), however, stipulates that such deduction would be permissible only on actual payment. This is the scheme of the Act for making an assessee entitled to get deduction from income insofar as employees ‟ contribution is concerned. It is in this backdrop we have to determine as to at what point of time this payment is to be actually made." 8. Upon perusal of the aforesaid, we are of the considered opinion that the decisions rendered in P.M. Electronics Ltd.(supra) and AIMIL Limited (supra) have correctly laid down the law and there is no justification or reason to differ with the same. In the result, we do not perceive any merit in this appeal and accordingly the same stands dismissed.” 11. In the light of aforesaid, this Bench is of the considered view that the interpretation given by the Ld. Tax Authorities Below with regard to application of provision the section 36 (1) (va) of the Act is not correct. The ground no 1&3 deserve to be sustained. The appeal is allowed and the impugned order, to the extent of grounds no1, is set aside. Order pronounced in the open court on 18 th July, 2022. Sd/- Sd/- (DR. B.R.R.KUMAR) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:-18 th .07.2022 *Binita, SR.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI
