Rohitash Kumar , Sriganganagar V. DCIT, CPC / ITO, Ward-4, Sriganganagar

ITA 22/JODH/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9101 (ITAT-JODHPUR)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 30-10-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 10-02-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Deemed to accrue or arise in india
• Section: 43B; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. 22/ Jodh/22 (ASSESSMENT YEAR- 2018-19 ) Shri Rohitash Kumar Shop No. 6C, Anoopgarh Road Raisingh Nagar, Sriganganagar Vs The ITO Ward-4 Sriganganagar (Appellant) (Respondent) PAN NO. DBPPK 8836 P Assessee By Shri Rajendra Jain, Advocate Revenue By Shri Venkatesh V (JCIT-DR) Date of hearing 31/10/2022 Date of Pronouncement 2/11/2022 O R D E R PER: SANDEEP GOSAIN, JM This is an appeal filed by the assessee against order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 26-11-2021 for the assessment year 2018-19 raising therein following grounds of appeal. 2 ITA NO. 22/JODH/2022 ROHITASH KUMAR VS ITO, WARD 4, SRIGANGANAGAR ITA NO. 22/JODH/2022 – A.Y. 2018-19 (1) That on the facts and in the circumstances of the case, the ld. CIT(A), NFAC has grossly erred in violating the principles of faceless appeal as announced for justice of honest taxpayers to avoid litigation as created unnecessary by AO. (2) That on the facts and in the circumstances of the case the ld. CIT(A) erred in upholding the validity of order passed by the CPC u/s 143(1) of the Act. (3) That on the facts and in the circumstances of the case, ld. CIT(A) grossly erred in consciously and deliberately highly disregarding the decision of Hon’ble Jurisdictional High Court. (4) That on the facts and in the circumstances of the case the ld. CIT(A) grossly erred in sustaining addition of Rs.15,02,180/- in respect of employees contribution to ESI & PF. (5) That on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in holding that amendment in Section 36(1)(va) and Section 43B by Finance Act, 2021 will be applicable in the case of assessee. (6) That on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in recording irrelevant finding in the order and thereby sustaining arbitrary addition in a hypothetical way by putting the assessee to erroneous harassment and inconvenience. 2.1 During the course of hearing, the Bench observed that there is delay of 17 days in filing the appeal by the assessee for which the ld. AR of the assessee has submitted that because of COVID-19 pandemic, the appeal could not be filed in time. However, the Hon’ble Supreme Court vide its order dated 10-01- 2022 excluded the period starting from March 15, 2020 till Feb. 28, 2022 for the 3 ITA NO. 22/JODH/2022 ROHITASH KUMAR VS ITO, WARD 4, SRIGANGANAGAR purposes of limitation. Hence, the ld. AR of the assessee prayed to condone the delay for which the ld. DR did not raise any objection. In this view of the matter, the delay is condoned. 3.1 Brief facts of the case are that the assessee filed the return of income on 31-10-2018 declaring total income at Rs.97,240/- which was processed by the CPC, Banglore on 26-04-2019 determining total income at Rs.15,99,420/- in which an adjustment of Rs.15,02,180/- was made to the return of income on account of deemed income under section 36(1)(va) r.w.s. 2(24)(x) of the Act for late deposit of employee’s contribution to EPF and ESI under the respective Act. 3.2 In first appeal, the ld. CIT(A) confirmed the addition of Rs.15,02,180/- made by the CPC, Banglore in not depositing the employee’s contribution to EPF and ESI covered u/s 36(1)(va) r.w.s. 2(24(x) of the Act by observing as under:- ‘’7. Under these circumstances and following the clarifiactory amendments made by the Finance Act, 2021 to Section 36(1)(va) and Section 43B, the contentions made in the submissions are not found acceptable and the additions of Rs.15,02,180/- made by AO, CPC for not depositing of employee’s contribution to the EPF and ESIC covered under section 36(1)(VA) of ‘’the Act’’ but paid to the respective funds after the due dates as 4 ITA NO. 22/JODH/2022 ROHITASH KUMAR VS ITO, WARD 4, SRIGANGANAGAR specified by rules of relevant funds are correctly held as deemed income and, therefore, the disallowance is hereby confirmed as the said late payments are not covered under section 43B of the Act. Accordingly, these grounds of appeal are dismissed.’’ 3.3 During the course of hearing, the ld. AR prayed that the ld. CIT(A) erred in sustaining the addition of Rs.15,02,180/- in respect of employees contribution to PF and ESI which should be deleted. 3.4 On the other hand, the ld. DR relied on the order of the ld. CIT(A) 3.5 After hearing both the parties, it is noticed that the AO made the addition of Rs.15,02,180/- on account of late deposit of EPF & ESI contribution of the employee’s by the assessee in the light of provision of Section 2(24)(x) r.w.s. 36(1)(va) of the Act by holding it deemed income and subjected to tax in the hands of the employer which in first appeal was confirmed by the ld. CIT(A) holding that the said late payments are not covered under section 43B of the Act and thus the ld. CIT(A) dismissed this ground of the assessee. However, it is noted that the assessee has deposited employees contribution towards PF & ESI before due date of filing of return. Recently, the Hon’ble Supreme Court has in the case of Checkmate Services Pvt. Ltd. Vs CIT-1, 143 Taxmann.com 178 (SC)/Civil Appeal No. 2833 of 2016 held that the provision of Section 43B of the Act shall not apply to employee’s contribution to PF/ESI and the due date specified u/s 36(1)(va) of the Act shall apply for determination of deductibility 5 ITA NO. 22/JODH/2022 ROHITASH KUMAR VS ITO, WARD 4, SRIGANGANAGAR of employee’s contribution to PF/ESI. Accordingly, in view of the aforesaid judgement of Hon’ble Supreme Court (supra), the issue being similar in nature is remanded back to the file of ld. CIT(A) for afresh adjudication by providing adequate opportunity of being heard to the assessee and the assessee is directed to submit the necessary details/documents concerning the issue in question before the ld. CIT(A) in order to square up the case. Further, the assessee is also at liberty to take any other plea before the ld. CIT(A), if so advised. Thus the appeal of the assessee is allowed for statistical purposes. 4.0. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 2 /11/2022 . Sd/- Sd/- (B. R. BASKARAN) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 2 /11/2022 *Mishra Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR 6. Guard File Assistant Registrar Jodhpur Bench