Ashoka General Industries, Mathura V. Jurisdictional A.O., Ward-1(3)(1), Mathura

ITA 25/AGR/2022

AI Insights

The case involves Ashoka General Industries appealing against the order of the CIT(A), NFAC, which confirmed the disallowance of Rs.6,14,929/- for employees' contributions to Provident Fund and ESI. The contributions were deposited after the due date, leading to the initial disallowance by the assessing officer under section 143(1) of the Income Tax Act. The appellant argued that the disallowance was unjust and cited various judicial precedents, including a favorable ITAT order and a High Court judgment. However, the Tribunal dismissed the appeal, referencing a Supreme Court decision that clarified the non-allowability of such late contributions as deductions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114068 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 28-03-2022
• Other Referred Cases: Checkmate Services Private Limited vs. Commissioner of Income Tax, M/s Sagun Foundry (P) Limited Vs CIT, M/s Mahadev Cold Storage & Ors. Vs. Assessing Officer, Salzgitter Hydraulics Vs ITO, MM Aqua Technologies Ltd Vs CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 143(1); 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH ‘DB’: AGRA (Through Video Conferencing) BEFORE, DR. B.R.R. KUMAR, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No.25/AGR/2022 (ASSESSMENT YEAR: 2019-20) Ashoka General Industries 1-2, Krishna Nagar Mathura PAN-AACFA 1052G Vs. DCIT,CPC Bengaluru/ Jurisdictional A.O. Ward-1(3)(1), Mathura (Appellant) (Respondent) Appellant by None Respondent by Mr. Shailendra Srivastava, Sr. DR Date of Hearing 06/11/2023 Date of Pronouncement 09/11/2023 ORDER PER YOGESH KUMAR U.S., JM: This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short], dated 09/11/2021 for Assessment Year 2019-20. Grounds taken in this appeal are as under: “1. BECAUSE, upon due consideration of facts and in the overall circumstances of the case the NFAC was highly unjustified in confirming disallowance of Rs.6,14,929/- in respect of payment against Employees Contribution to Provident Fund/ ESI deposited during the Financial Year itself before due date of filing of Return. The impugned order is grossly arbitrary, highly unjust, unwarranted, perverse, wrong, illegal and bad in law. 2. ITA No.25/Agr/2022 Ashoka General Industries vs. DCIT, CPC Page 2 of 5 2. BECAUSE, the addition has been confirmed by the 'NFAC in utter disregard to the judicial disciple which mandates that Judgement of Jurisdictional High Court (M/s Sagun Foundry (P) Limited Vs CIT (2017) 78 Taxman 47 (Allahabad) as was referred and relied upon by the 'appellant ought to have been followed. 3. BECAUSE, upon overall consideration of facts and circumstances of the case, impugned disallowance of Rs.6,14,929/- has been confirmed by the 'NFAC in summary and prejudice manner, without discussing less distinguishing the Judgments of Jurisdictional High Court referred and relied upon by the ‘Appellant’. 4. BECAUSE, in any view of the matter the issue under appeal stands squarely covered in favour of the 'Appellant' by the recent Order dated 14.06.2021 passed by the Jurisdictional Bench of the Hon'ble ITAT, Agra in the case of M/s Mahadev Cold Storage & Ors. Vs. Assessing Officer in ITA No.41 & 42/Agr/2021 relying upon M/s Sagun Foundry (P) Ltd (supra). 5. BECAUSE, while confirming the addition the 'NFAC' has relied upon amendment as was brought by the Finance Act 2021 by insertion of Explanation 2 which states that "For the removal of doubts, it is hereby clarified that the provisions of section 438 shall not apply and shall be deemed never to have been applied for the purposes of determining the 'due date" under this clause". 6. BECAUSE, such an interpretation by the ‘NFAC’ is in direct conflict with the law as clarified by the Hon'ble Supreme Court vide Judgement dated 11 August 2021 in the case of MM Aqua Technologies Ltd Vs CIT (2021) 129 taxmann.com 145 (SC) wherein the Hon'ble Supreme Court has held in Para-22 that a retrospective provision in a Tax which is "for the removal of doubts' cannot be presumed to be retrospective, even where such language is used, if it alters or changes the law as it earlier stood. 7. BECAUSE, the interpretation adopted by the 'NFAC’ is patently wrong in the light of order dated 15 June 2021 passed in the case of Salzgitter Hydraulics Vs ITO (2021) 128 taxman.com 192 (Hyd) wherein the Hon'ble Tribunal has duly considered that amendments in section 36(va) as well as 43B of the Act by the Finance Act 2021 and after due consideration thereof has adopted the view in favour of the assessee. 8. BECAUSE, in any view, the appellant craves leave to add, alter, amend, rectify or withdraw any ground of appeal.” 3. ITA No.25/Agr/2022 Ashoka General Industries vs. DCIT, CPC Page 3 of 5 2. None appeared for the assessee, though the notice issued to the registered address of the assessee. Vakalatanama of the Assessee has been filed but neither the Assessee nor the Representative of the Assessee appeared when the case is called for hearing. 3. The Ld. DR submitted that the issue involved in the present appeal is squarely covered by the judgment of the Hon’ble Supreme Court in the case of Checkmate Services Private Limited vs. Commissioner of Income Tax, in Civil Appeal No.2833/2016, vide order dated 12/10/2022 and sought for dismissal of the appeal. 4. We have heard the Ld. DR and perused the material available on record. An order of intimation dated 22/02/2020 came to be passed u/s 143(1) of the Act against the Assessee by making the addition of Rs.6,14,929/- as sum received from Employee as Contribution to Provident Fund and ESI and not credited to the employee account on or before the due date as per the section 36(i)(va) of the Act. 5. Aggrieved by the intimation dated 22/02/2020, the assessee preferred an appeal before the CIT(A), NFAC, Delhi. The Ld. CIT(A), NFAC, vide order dated 19/11/2021 dismissed the appeal filed by the assessee. As against the order of the Ld. CIT(A), NFAC, the present appeal filed by the assessee. 4. ITA No.25/Agr/2022 Ashoka General Industries vs. DCIT, CPC Page 4 of 5 6. The issue involved in the present appeal is regarding allowability of ESI and PF which was deposited after the due date prescribed in the respective Act, which is no more res-integra. The Hon'ble Supreme Court in the case of Checkmate Services Private Limited vs. Commissioner of Income Tax in Civil Appeal no. 2833/ 2016, order dated 12/10/2022 held that the employees contribution to PF and ESI, if not remitted before the due date prescribed in the respective enactments, cannot be allowed as deduction. In view of the above ratio of the Hon'ble Supreme Court in the case of Checkmate Services Private Limited (supra), we are declined to interfere with the order of the Ld. CIT(A). Accordingly, the grounds of appeal of the assessee are dismissed as devoid of merits. 7. In the result, appeal filed by the assessee is dismissed. Order pronounced in open Court on 09 th November, 2023. Sd/- Sd/- Sd Sd(DR. B.R.R. KUMAR) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 09/11/2023 Pk/R.N, Srps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, AGRA 5. ITA No.25/Agr/2022 Ashoka General Industries vs. DCIT, CPC Page 5 of 5