S.R.Hospital, Muzaffarnagar V. ITO,Ward-3(1)(1), Muzaffarnagar

ITA 2894/DEL/2022

AI Insights

The case involves S.R. Hospital appealing against the order of the Commissioner of Income Tax (Appeals) - NFAC, Delhi, which arose from an assessment order passed by the Assessing Officer under Section 154 of the Income Tax Act, 1961. The primary contention was the disallowance of employees' contribution to PF/ESIC amounting to Rs. 5,75,152 under Section 36(1)(va) read with Section 43B of the Act. The Tribunal noted the absence of the appellant during the hearing and proceeded ex-parte. The Senior DR for the Revenue argued that the additions made to the returned income due to late deposits of employees' contributions were justified and cited relevant Supreme Court and Tribunal decisions supporting the non-deductibility of such late deposits under the Income Tax Act. However, the Tribunal found merit in the assessee's claim of timely payment, supported by documentary evidence, and thus restored the matter to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121667 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 07-06-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 11-12-2022
• Other Referred Cases: Checkmate Services Pvt. Ltd. vs. CIT, Weather Comfort Engineers Pvt. Ltd. vs. ACIT-CPC Bengaluru
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 54; 154; 43B; 143(3); 143(1); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A No.2894/DEL/2022 Assessment Year 2019-20 S.R. Hospital 128/5, Sarvat Gate, Muzaffarnagar v. ITO Ward-3(1)(1) Muzaffarnagar. TAN/PAN: ADHFS7823F (Appellant) (Respondent) Appellant by: None Respondent by: Shri Anuj Garg, Sr.DR Date of hearing: 08 06 2023 Date of pronouncement: 13 06 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he capt ione d a ppeal has bee n file d by t he assess ee a gainst the or der of the Com miss ioner o f Income Ta x (A ppeals )-N FA C, D elhi (‘ C IT (A )’ in s h ort ) da ted 21. 11.2 022 aris ing from the assess me nt o rder passed by the Assessing O f fice r (AO ) date d 12. 04.2022 unde r Sect io n 154 of the Income T a x Ac t, 1961 (the A ct) c onc er ning A Y 2019- 20. 2. A s per t he g rounds of ap peal, the assessee has cha l le nge d the dis all ow anc e of empl o yees ’ c ontributi on t o PF/ ESIC unde r Sect ion 36(1)(va) r. w . Section 4 3B o f t he A ct a mount ing to Rs. 5, 75, 152/ -. 3. When th e matter w as cal le d for hearing, none appea re d for I.T.A No.2894/Del/2022 2 the ass esse e. U nder the circu mst ance s, w e procee d ex-part e in the absence of t he assessee. 4. L d. Sr. D R for the R evenue, on its part, con tended t ha t CPC has r ig htl y made additi ons of R s.5, 75, 152 /- to t he ret urn ed income of the ass essee on account of l ate de posit s of e mployees ’ cont ri but io n t o P F/ESIC while pro cessi ng t he ret urn of income under Sect ion 143(3) of the A ct. The rect ificat io n app licati on under Sec tion 1 54 b y the assess e e the reon has been ri ght l y rejec te d and c onf ir me d by the C IT (A ) in the l i ght of the judgment re ndered in the c ase of Che ckm ate Serv ice s P vt. Lt d. vs. CIT (20 22) 143 t axm ann. com 178 (SC ). T he l d. Sr.D R for t he R eve nu e submit ted t ha t even for t he A sses sment Y ea r 2019 -20 i n quest ion, belat ed de pos i t of empl o yees ’ cont ribut ion he ld in tr ust b y the empl oye r ass essee ar e to be reckoned as ta xa ble income unde r Sect ion 2( 24) (X ) r. w. Section 43B and deduc ti on under Se ct i on 36( 1)(va) of the A ct w ou ld not be permi ssi ble. T he ld. Sr. DR on behal f of the Re venue furt her conten ded t hat the dela yed dep osits of emplo yees ’ c ont ri but ion indic a ted in t he audit report is suff ic ient for adj ust ment under Sect ion 143 (1) of the A ct as held in We athe r C om fort En gi neers P vt. Ltd. vs. A C IT-C PC Ban gal uru ITA N o. 959/D el / 2021 or der d ated 1 5. 02. 202 3. 5. T he iss ue tow ar ds taxab il i ty of be lated e mpl oyees ’ cont ri but io n to PF / ESIC is no longe r res i nt egr a in the l ight of the judgment of H on’ ble Sup reme Court i n t he c ase of Che ckm ate Services (s upra). The H on ’bl e Supreme C ourt in this cas e obs erve d tha t In come Ta x A ct di ffe re nt ia tes bet w een the empl oye es ’ contr ibut ion and e mplo ye r c ont ribu tion to the PF/E SIC act wh il e in res pect e mpl oye r’s c ont ri bu tion, Secti on I.T.A No.2894/Del/2022 3 43B is applicab le but how ever w ith res pect o f e mpl oyees ’ cont ri but io n th e condit io ns s pec i fi ed in Se ct ion 36(1)(va) is appl icable and Sect ion 43B (b) does not cover e mpl oyees ’ cont ri but io n de duc ted by e mp lo yer fr om sa lar y of t he empl oye es. The C o-o rdi na te Ben ch of T ribunal in Weathe r Com fort (s upr a) has hel d that such adj ust ment/ dis al l ow anc e is pe rmiss ible i n the proceed ings ca rrie d out under Sect io n 143(1) of t he Ac t. In p ar it y, w e do not see any me ri t i n the case of the as sessee f or impe rmissi bilit y of such adjus tment under Sect i on 143(1) o f the A ct. 6. H ow ever in t he s ame va in note d that the assess ee in its pape r book h as cl aimed tha t PF/ESIC cont ribut i on to t he respec t ive fun ds ha ve bee n dul y made w it hi n t he speci fied ti me pe ri od a nd mi sreporte d in the tax audi t re port due t o i nad vertenc e. The proo f of p ayments / challans w e re also pl aced on record. The assesse e thus claims that it has made t i mel y p aymen t of both emp lo ye rs a nd empl oye es ’ c ont ri bu ti on w hi ch fact has bee n to ta ll y dis re ga rded by the CIT (A ). A s per the pa per book, the a ssesse e als o submits that C ha rt er ed A c countant ha s p repared a letter c ertif yin g the co rrect pa yme nt det ails an d th us such fac ts nee d t o be taken cogniza nce. 7. Withou t express ing a ny opini on o n me rits on such as pect, w e deem it e xpedie nt t o res to re the matt er t o t he f ile o f the des ig nated A ssess i ng O fficer. It shal l be o pen to the a ssessee t o place fac tual mat rix be fo re the A ssessi ng O ff ice r and take a ll pleas for eli gibilit y of d educti on fo r evaluat ion of the Assessing O fficer. Th e Asses sin g O ff ice r shal l exami ne this as pec t and pas s af res h asses s ment orde r i n acc ord anc e w ith law after gi vi ng pr ope r I.T.A No.2894/Del/2022 4 opportunit y. 8. H ence, in te rms of such o bser vati ons, the int i mation for A ssess me nt Year 2 019-20 is s et asi de and th e issu e tow ards c la i m of deduction unde r Sect i on 36(1)(va) is res tored back t o the file of the A O for f res h dete rminatio n in ac corda nce w i th law. 9. In the r esu lt, the appeal of t he a ssessee is allow ed f or sta tis ti ca l purpos es . Order pronounced in the open Court on 13/06/2023. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /06/2023 Prabhat Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Assistant Registrar