CENTRAL INVESTIGATION AND SECURITY SERVICES LIMITED, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX, CPC, BANGALORE

ITA 2363/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2163 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 15-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40A(3); 143(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 2363/MUM/2021 (ASSESSMENT YEAR: 2018-19) Central Investigation and Securities Services Limited, Block Q, Dalal Estate, Mumbai Central, Mumbai - 400 008, Maharashtra [PAN:AAACC6145P] Deputy Commissioner of Income Tax, CPC, Bangalore .................. Vs ................... Appellant Respondent Appearances For the Appellant/Assessee For the Respondent/Department : : None Shri R A Dhyani Date of conclusion of hearing Date of pronouncement of order : : 05.05.2022 28.07.2022 O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Appellant/Assessee has challenged the order, dated 15.11.2021 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeals Centre, Delhi [hereinafter referred to as ‘the CIT(A)’] for the Assessment Year 2018- 19, whereby the CIT(A) had partly allowed the appeal filed by the Appellant/Assessee against the intimation/order dated 27.02.2020, issued/passed by Assistant Director of Income Tax, CPC under Section 143(1) of the Act. 2. The Appellant has raised ground of appeal which is directed against the disallowance of INR 54,10,915/- made under Section 36(1)(va) of the Act in respect of employees’ contribution to Employees’ State Insurance Corporation (ESIC) and Provident Fund (PF) deposited after the due date specified in the applicable statute but before the due ITA. No. 2363/Mum/2021 Assessment Year: 2018-19 2 date of filing income tax return prescribed under Section 139(1) of the Act. 3. The brief facts are that the Appellant filed its return of income for the Assessment Year 2018-19 on 27.09.2018 declaring total income of INR 9,92,33,639/- which was processed under Section 143(1) of the Act by the Assistant Director of Income Tax, CPC computing loss at INR 10,46,44,555/- after making addition of INR 54,10,195/- under Section 36(1)(va) of the Act being aggregate employees’ contribution to ESIC and PF deposited after the due date specified in the applicable statute but before the due date of filing income tax return prescribed under Section 139(1) of the Act. 4. Being aggrieved, the Appellant filed appeal against intimation/order under Section 143(1), dated 27.02.2020 before the CIT(A) which was partly allowed vide order, dated 15.11.2021. However, the CIT(A) did not grant any relief as regards the above disallowance of INR 54,10,195/-. 5. The Appellant in now in appeal before us. 6. The Ld. Departmental Representative appearing before us supported the order passed by CIT(A) and submitted that the amendments to Section 36(l)(va) made vide Finance Act 2021 are to be applied retrospectively, as the same are curative/declaratory in nature. He relied upon the order passed by the CIT(A) to support the aforesaid disallowance of INR 54,10,195/-. 7. We have perused the material available on record including the statement of facts and grounds of appeal filed before CIT(A) and have considered the submissions of the Learned Departmental Representative. It is not in dispute that Appellant had deposited the employees’ contribution of PF and ESIC before the due date of filing of Return under Section 139(1) of the Act, though the same were ITA. No. 2363/Mum/2021 Assessment Year: 2018-19 3 deposited belatedly beyond the due date specified under the respective statutes. The CIT(A) has sought to justify the additions/adjustments made under Section 143(1) of the Act vide order/intimation dated 27.02.2020 by placing reliance upon the amendments introduced by the Finance Act, 2021 which was passed much later on 28.03.2021 by contending that the amendments are to be interpreted as being clarificatory in nature and therefore, applicable retrospectively. We note that the date on which intimation/order under Section 143(1) of the Act was passed the issue stood decided in the favour of the Appellant by virtue of the judgment of the jurisdictional High Court in the case of CIT vs. Ghatge Patil Transporters Ltd. (2015) 53 taxmann.com 141 (Bom HC). Further, even after the introduction of amendments to Section 36(1)(va)/43B of the Act by way of Finance Act, 2021, Hyderabad Bench of the Tribunal had, vide order dated 15.06.2021, in the case of Salzgitter Hydraulics (P.) Ltd. vs ITO, Ward 3(1), Hyderabad: 189 ITD 676 (Hyderabad - Trib.) held that the aforesaid amendments are applicable from Assessment Year 2021-2022. In view, the adjustments/additions in respect of employees contribution to ESIC and PF fell outside the scope of Section 143(1)(a)(iv) of the Act. Section 143(1)(a)(iv) provides for adjustment in the return of income filed by an assessee in case a disallowance of expenditure is indicated in the audit report but had not taken into account in computing the total income in the return. A perusal of Form 3CD, the form prescribed for filing tax audit report, would show that the tax auditor is not just required to identify and provide details of disallowance of expenditure. Form 3CD also provides for disclosures of various information/details relating to an assessee such as the nature business/profession, books of accounts maintained etc. Further, not all clauses of Form 3CD require the tax auditor to express an opinion. Some of the clauses require the tax auditor to just provide information/details. Clause 20(b) of Form 3CD falls in this category. The tax auditor is merely required to provide ‘Details of contributions ITA. No. 2363/Mum/2021 Assessment Year: 2018-19 4 received from employees for various funds as referred to in section 36(1)(va)’. This becomes clear on examining other clauses which specifically require the tax auditor to express an opinion, such as Clause 21(b) requiring disclosure of amounts inadmissible under Section 40(a) of the Act, Clause 21(d) requiring disclosure of amounts inadmissible under Section 40A(3) of the Act and Clause 21(e) requiring disclosure of amounts inadmissible under Section 40A(9) of the Act. Since Clause 20(b) of Form 3CD does not require any expression of opinion on the part of tax auditor, it cannot, in our opinion, be said that disclosure made by tax auditor in the aforesaid clause constitutes a ‘disallowance of expenditure indicated in the audit report’ triggering the provisions of Section 143(1)(a)(iv) of the Act. In any case the issue stands decided in favour of the Assessee by the decision of Mumbai Bench of the Tribunal in the case of Kalpesh Synthetics Pvt. Ltd., vs. DCIT, CPC, Bangalore: 137 taxmann.com 475. 8. In view of the above, Ground No. 1 raised by the Appellant in the present appeal are allowed and addition/disallowance of INR 54,10,195/- made under Section 36(1)(va) of the Act pertaining to deposit of employees’ contribution to ESIC/PF after the due date specified in the applicable statute but before the due date of filing income tax return prescribed under Section 139(1) of the Act stands deleted. 9. In the result, the present appeal is allowed. Order pronounced on 28.07.2022. Sd/- Sd/- (Om Prakash Kant) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 28.07.2022 Alindra, PS ITA. No. 2363/Mum/2021 Assessment Year: 2018-19 5 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त(अपील) / The CIT(A)- 4. आयकर आय क्त / CIT 5. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदिकरण, म ुंबई / ITAT, Mumbai