Smt. Vanita Vijaysingh Jingar, Ahmedabad V. The DCIT, Circle-3(2) Present Juridiction DCIT, Circle-3(1)(1), Ahmedabad

ITA 266/AHD/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 4793 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-10-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 20-04-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 10; 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Smt. Vanita Vijaysingh Jingar Block No. 29, Matru Bunglows, Nr. Ayodhya Nagar, Opp: Baroda Express Highway, C.T.M. Romol, Ahmedabad (Guj.) PAN: AQSPJ0591P (Appellant) Vs The DCIT, Circle-3(1)(1), Ahmedabad (Respondent) Assessee Represented: Shri Sulabh Padshah, A.R. Revenue Represented: Shri B.P. Makwana, Sr. D.R. Date of hearing : 11-10-2023 Date of pronouncement : 06-12-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 02.03.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2017-18. ITA No. 266/Ahd/2023 Assessment Year 2017-18 I.T.A No. 266/Ahd/2023 A.Y. 2017-18 Page No Smt. Vanita Vijaysingh Jingar vs. DCIT 2 2. The brief facts of the case is that the assessee is an individual and engaged in supplying manpower services to different organization and offices under the name and style of M/s. J V Management. For the Assessment Year 2017-18, the assessee filed its Return of Income on 18.10.2017 declaring total income of Rs. 20,14,690/-. The return was taken up for scrutiny assessment and the assessee was asked to furnish the details of payment to Provident Fund and ESI expenses along with evidences regarding deposit of such contribution in the relevant accounts. The assessee furnished the details namely ESIC expenses of Rs. 17,50,918/- and PF expenses of Rs. 1,92,81,203/- and all these payments were made through banking channels and also enclosed respective challans. 3. On perusal of the above details, the Assessing Officer found certain payments amounting to Rs. 30,28,148/- were made after the due date in the PF Act and treated the same as income in view of the provisions of Section 2(24)(x) r.w.s. 36(1)(va) of the Act and determined the total income at Rs. 50,42,838/- and demanded tax thereon. 4. Aggrieved against the same, the assessee filed an appeal before Commissioner of Income Tax (Appeals), NFAC. During the appellate proceedings, the assessee filed a detailed submission on 06.02.2023 explaining that there is no delay on the part of the assessee in remitting the statutory dues to the authorities. However the Ld. CIT(A) taking into account Hon’ble Supreme Court Judgment in the case of Checkmate Services Pvt. Ltd., confirmed I.T.A No. 266/Ahd/2023 A.Y. 2017-18 Page No Smt. Vanita Vijaysingh Jingar vs. DCIT 3 the addition made by the Assessing Officer and thereby dismissed the assessee appeal. 5. Aggrieved against the appellate order, the Revenue is in appeal before us raising the following Grounds of Appeal: 1. The Ld. CIT(A) has erred in law and on facts in confirming the whole addition of Rs 30,28,148/-without considering the facts of the case, submission and various documentary evidences filed before him. It can be seen from the CIT(A) Order that he has no where discussed anything about various contentions raised during course of appellate proceeding and confirmed the addition merely stating on Page 5 of order that AO has verified the challan for payments made towards Provident Fund and based on the documents, the AO concluded that there was a delay. In view of this, the action of Ld. CIT(A) confirming the whole addition of Rs 30,28,148/- without appreciating and verifying the facts and records filed before him is completely illegal and unjust and thus addition confirmed of Rs 30,28,148/- be restricted to Rs 3,08,240/- and the remaining addition made be deleted. 2. The Ld CIT(A) has erred in law and on facts in confirming the whole addition of Rs 30,28,148/- on account of Employee's contribution towards P.F. deposited late as per due date prescribed under P.F Act. It is submitted that the above addition made towards P.F. contribution includes Employer's contribution & Admin Charges as well and further contribution deposited late due to various genuine & bonafide reasons and circumstances prevailing beyond the control of the Appellant at that time. On facts and circumstances of the case, out of total addition confirmed u/s Section 36(1) (va) of Rs 30,28,148/-, the addition of Rs 27,19,908/- is completely incorrect and the same be deleted. 2.1 The Ld. CIT(A) has erred in confirming the addition of Rs 14,85,204/- on account of Employee's contribution towards P.F. deposited late without verifying this facts and details filed. It is submitted that these contributions for the months off August, 2016 and November 2016 were duly deducted from Bank account of Appellant on or before due date specified under PF. Act and is evident from the details filed on record. Looking to the facts of the case, the addition confirmed by Ld. CIT(A) of Rs 14,85,204/- is not at all justifiable and the same be deleted in the interest of justice. 2.2 The Ld. CIT(A) has erred in confirming the addition of Rs 5,62,804/-on account of Employee's contribution towards P.F. deposited late without verifying the facts and details available on record. It is submitted that the Employee's contribution towards P.F. for the Month of July 2016 of Rs 5,62,804/-deposited on 16.8.2016 because of public holidays only i.e. Sunday on 14.8.2016 and then Independence day on 15.8.2016 and thus I.T.A No. 266/Ahd/2023 A.Y. 2017-18 Page No Smt. Vanita Vijaysingh Jingar vs. DCIT 4 same can not be considered as lute even under P.F Act. It is well established principle under the law that if the due date falls on a public holiday & payment has been made on the next working day, such payment shall be considered as payment in time. In view of his, the addition confirmed by Ld. CIT(A) towards on account of Employee's contribution towards PF of Rs. 5,62,804/- is illegal and unlawful and the same be deleted. 2.3 The Ld. CIT(A) has erred in confirming the addition of Rs 4,07,502/-on account of Employee's contribution to P.F. deposited late without appreciating the fact that this contribution was late deposited due to the circumstances prevailing beyond the control of the Appellant. It is submitted that due to the login access of Appellant for EPFO website was blocked in the month of January and also duse to technical glitches at the end of bank, are two major reasons for the delay deposits of contribution Rs 4,07,502/-, Further, the necessary communication and correspondence made with EPFO office and with bank in this regard were also filed before Ld CIT(A). On facts and circumstances of the case, the addition confirmed by Ld. CIT(A) of Rs 4,07,502/-on account of Employee's contribution towards P.F. considering the same as late deposited is incorrect and invalid and the same be deleted. 2.4 The Ld. CIT(A) has erred in confirming the addition of Rs 2.64.398/- treating the same as Employee's contribution towards P.F. deposited late without appreciating the fact that it is not at all Employee's contribution. It is submitted that out of total addition made of Rs 30,28,148/-, the amount of Rs 2,84,398/- is wrongly considered as Employee's contribution, which in fact includes Employer's contribution Rs 2,47,204/- & Admin Charges Rs 17,194/- and are duly supported with documentary evidences. On facts and circumstances of the case, the addition mad and confirmed of Rs 2,64,398/-treating the same as Employee's contribution towards P.F. deposited late is incorrect both and facta as well as on law and the same be deleted. 3. The Ld. CIT(A)/Ld. AO has erred in law and in facts in confirming/passing the addition made of Rs 30,28,148/- in the Asst order passed in spite of the facts the Ld AO has not provided the opportunity of being heard to the Appellant before making such huge addition. It is further submitted that the Ld. AO has neither issued show cause notice nor asked in any other form during course of assessment proceeding that why such huge addition of Rs 30,28,148/- should be made. It is therefore submitted that the Asst Order passed u/s 143(3) of the Act making such huge addition of Rs 30,28,148/- without providing sufficient opportunity of being heard to the Appellant to be quashed and set-a-side and the addition made thereby be deleted in the interest of justice. The same please be held accordingly. I.T.A No. 266/Ahd/2023 A.Y. 2017-18 Page No Smt. Vanita Vijaysingh Jingar vs. DCIT 5 4. The order passed by the Ld. CIT(A) is bad in law and contrary to the provisions of law and facts to the extent of above grounds of Appeal. It is submitted that the same be held so now. 6. Ld. Counsel Shri Sulabh Padshah appearing for the assessee submitted before us a Synopsis for each Grounds of Appeal and submitted that there is no delay on the part of the assessee in depositing the amounts. On 14.08.2016 being a Sunday and following that 15.08.2016 is Independence Day being a National Holiday, the payment was made on 16.08.2016 which is under General Clauses Act, not a delay. 6.1. Similarly a sum of Rs. 7,24,941/- was disallowed by the A.O. whereas the amount was debited in its bank account on 14.10.2016 but credited in PF account belatedly. Further EPFO Circular makes it very clear that the date of debit in bank account is to be considered as the date of payment. Similarly the A.O. also disallowed Employees’ Contribution as well as Admin charges as belated payments and disallowed the same. He drawn our attention to the details at Page Nos. 19 to 22 of the Paper Book. Thus the Ld. Counsel pleaded that a sum of Rs. 3,08,240/- is only disallowable u/s. 36(1)(va) of the Act and the balance disallowance of Rs.27,19,908/- made by the A.O. is liable to be deleted. 7. Per contra, the Ld. Sr. D.R. Mr. B.P. Makwana appearing for the Revenue supported the order passed by the lower authorities and requested to uphold the same. 8. We have given our thoughtful consideration and perused the materials available on record and a detailed Paper Book running to I.T.A No. 266/Ahd/2023 A.Y. 2017-18 Page No Smt. Vanita Vijaysingh Jingar vs. DCIT 6 32 pages filed by the assessee. It is seen that a detailed written submission was filed by the assessee before Ld. CIT(A) explaining the wrong disallowances made by the Assessing Officer on account of late credit payments in the EPF account, but from assessee’s bank account debited of Rs. 14,85,204/- well before the due date. Similarly payment of Rs. 5,62,804/- which were paid on 16.08.2016 whereas 14.8.2016 is a Sunday and 15.08.2016 being an Independence Day being a National Holiday. Therefore as per Section 10 of the General Clause Act, 1897, the payment made on next working day is not to be treated as belated payment, so the disallowance made by the Assessing Officer is liable to be deleted. 8.1. Similarly the assessee had explained the technical glitches in EPFO Website was blocked in the month of January 2017, wherein the contribution of Rs. 4,07,502/- was remitted belatedly and also produced necessary communication and correspondence made with EPFO Office and with the bank. The same were filed before Ld. CIT(A) by explaining that that payment made on 23.01.2017 was returned on 27.01.2017. Therefore the same was again paid on 28.01.2017. However the Assessing Officer without considering the same, made double disallowance. Similarly the Assessing Officer made disallowance on the Employer’s contribution of Rs. 2,47,204/- and Administration charges of Rs. 17,194/- which is not liable to be disallowed u/s. 36(1)(va) of the Act. 9. Thus in our considered view, the Ld. CIT(A) has not considered the written submission and details of documents filed by the assessee, but simply followed the Judgment of the Hon’ble I.T.A No. 266/Ahd/2023 A.Y. 2017-18 Page No Smt. Vanita Vijaysingh Jingar vs. DCIT 7 Supreme Court and confirmed the addition made by the Assessing Officer of Rs. 30,28,148/-. Therefore in the Interest of Principle of Natural Justice, we set aside the matter back to the file of Jurisdictional Assessing Officer (JAO) to verify the details filed by the assessee and make the disallowance in accordance with law by giving proper opportunity of hearing to the assessee. Needless to say, the assessee should cooperate with the JAO for passing fresh assessment order. Thus the grounds raised by the assessee are hereby allowed. 10. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 06-12-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 06/12/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद