P P Telecell Marketing Pvt Ltd., Delhi V. DCIT, Circle-14(1), New Delhi

ITA 2849/DEL/2022

AI Insights

The case involves P. P. Telecell Marketing Pvt. Ltd., the appellant, contesting an order from the Deputy Commissioner of Income Tax (DCIT) regarding the addition made on account of employees' contributions to PF/ESI for the Assessment Year 2018-19. The Income Tax Appellate Tribunal examined the appeal, which was delayed by 374 days but admitted after considering the reasons provided in the condonation petition. The main legal contention was whether the CIT(A) was justified in confirming the addition made by the DCIT. The Tribunal admitted additional grounds of appeal concerning the timing of salary disbursement and the corresponding remittance of PF/ESI contributions, leading to a decision to verify the actual dates of remittance against the due dates.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130846 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: F
• Next Hearing Date: 15-08-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 04-12-2022
• Other Referred Cases: Checkmate Services Pvt. Ltd Vs. CIT, Kanoi Paper & Industries Ltd vs ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(1)

Judgement Text

Page 1 of 6 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE, SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.2849/Del/2022 (ASSESSMENT YEAR 2018-19) P. P. Telecell Marketing Pvt. Ltd. C/o Ombir Panwar & Co. FF-17, First Floor Cross River Mall Karkardooma, Delhi-110 092 PAN-AACCP 7628J Vs. DCIT Circle-14(1) New Delhi (Appellant) (Respondent) Appellant by Mr. C.S. Anand, Advocate and Mr. Ombir Kumar Panwar, CA Respondent by Mr. Vivek Vardhan, Sr. DR Date of Hearing 16/08/2023 Date of Pronouncement 11/09/2023 ORDER PER M. BALAGANESH AM: This appeal of the assessee arises out of the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘Ld. CIT(A)’] in DIN & Order No. ITBA/NFAC/S/250/2021-22/1035934361(1), ITA No.2849/Del/2022 P. P. Telecell Marketing Pvt. Ltd. vs. DCIT Page 2 of 6 dated 27/09/2021 against the order passed by Deputy Commissioner of Income Tax, CPC, Bangalore (hereinafter referred to as the ‘Ld. AO’) u/s 143(1) of the Income Tax Act,1961 (hereinafter referred to as ‘the Act’) on 17/10/2019 for the Assessment Year 2018-19. 2. At the outset, we find that there is a delay in filing of appeal before us by 374 days. The assessee had filed condonation petition adducing the reason for the delay in filing of appeal. No serious objections were made by the ld. DR before us on the point of delay. Considering the reason adduced in the condonation petition, in the peculiar facts and circumstances of the instant case, we are inclined to condone the delay and admit the appeal of the assessee for adjudication. 3. The only effective issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the addition made on account of employees contribution to PF / ESI in the facts and circumstances of the instant case. We find that the assessee had also raised Additional Grounds before us as under:- “A. That on the facts of the case and in law, the CPC ought not to have made adjustment on a/c of variance based upon a statement made by the ITA No.2849/Del/2022 P. P. Telecell Marketing Pvt. Ltd. vs. DCIT Page 3 of 6 Tax Auditor in Tax Audit Report (without mentioning that the reported amount is to be disallowed). B. That on the peculiar facts of the case and in law, the disallowance ought to have been made considering the month during which the salaries were actually disbursed (and not the month to which the salaries relate). It is requested that these additional grounds of appeal may kindly be admitted and the counsel of the appellant assessee may kindly be allowed to argue on these additional grounds of appeal too.” 4. We find that the ld.AR before us fairly stated that the original grounds raised by the assessee are to be decided against him in view of the decision rendered by the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd Vs. CIT reported in 448 ITR 518 (SC) wherein it was held that the employees contribution to PF / ESI would have to be added as income of the assessee if the same was not remitted within the due dates prescribed under the respective PF / ESI Acts. However, the ld. AR made arguments before us on Additional Ground B referred supra. We find that this additional ground is a legal issue and hence they are admitted for adjudication. We find that the ld. AR before us placed a chart separately for PF and ESI stating that the addition to be made would be only Rs 3,33,937/- as against Rs 53,89,319/-, if the month in which salary was actually disbursed is taken into account by the ld. AO. We find that this aspect of the issue was ITA No.2849/Del/2022 P. P. Telecell Marketing Pvt. Ltd. vs. DCIT Page 4 of 6 not decided in the decision of Hon’ble Supreme Court referred supra. The ld. AR placed reliance on the decision of Calcutta Tribunal in the case of Kanoi Paper & Industries Ltd vs ACIT reported in 75 TTJ 448 dated 28.5.2001 where this aspect of the issue was considered. The ld. DR vehemently relied on the orders of the lower authorities and argued that the issue of employees contribution to PF/ ESI had already been decided in favour of the revenue by the recent decision of Hon’ble Supreme Court referred supra. 5. Considering the tabulation submitted by the assessee for each of the month in which salary was actually disbursed, we deem it fit and appropriate to restore this issue to the file of ld. AO for verification of those figures. On verification, if it is found that the employees contribution to PF / ESI had been remitted within the due date from the end of the month in which salary was disbursed, then assessee would be entitled for relief and no addition could be made thereon. The ld. AO is also directed to examine the applicability of the decision of Calcutta Tribunal in 75 TTJ 448 referred supra while deciding the issue. Accordingly, the Additional Ground B is allowed for statistical purposes. ITA No.2849/Del/2022 P. P. Telecell Marketing Pvt. Ltd. vs. DCIT Page 5 of 6 6. The ld. AR vehemently relied on the decision of the Co- ordinate Bench of Mumbai Tribunal in the case of P.R. Packaging Services in ITA No.2376/Mum/2022 dated 07/12/22 wherein this issue has been decided in favour of the assessee. We find that the said decision was rendered by applying the provisions of Section 143(1)(iv) of the Act. Pursuant to the aforesaid decision of the Hon’ble Supreme Court, the claim of deduction towards employee’s contribution to PF & ESI made by the assessee becomes an incorrect claim warranting primafacie adjustment u/s.143(1) of the Act. Hence, the decision relied by the ld. AR would not advance the case of the assessee. Accordingly, Additional Ground A raised by the assessee is dismissed. 7. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 11 th September, 2023. Sd/- Sd/- (SAKTIJIT DEY) (M. BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER Dated:11/09/2023 Pk/sps ITA No.2849/Del/2022 P. P. Telecell Marketing Pvt. Ltd. vs. DCIT Page 6 of 6 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI