Utkranti Solutions Pvt Ltd, Ahmedabad V. The Income Tax Officer, Ward-4(1)(1), Ahmedabad

ITA 323/AHD/2022

AI Insights

The case involves Utkranti Solutions Pvt. Ltd., which appealed against the order of the CIT(Appeals), National Faceless Appeal Centre, Delhi, concerning the assessment year 2020-21. The primary contention was the disallowance of delayed contributions to Provident Fund and ESI, which were paid after the statutory due dates but before the filing of the income tax return. The assessee argued that the legal precedents applicable at the time of the assessment were debatable and that a more favorable view should have been taken. However, both the CIT(A) and the Tribunal dismissed these arguments, citing the established legal position by the Supreme Court and the Gujarat High Court.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299968 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 01-01-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 21-08-2022
• Other Referred Cases: CIT vs. Gujarat State Road Transport Corporation, Checkmate Services Pvt. Ltd. vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(1); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . No .3 23 /A h d / 20 22 ( A s se ss m e nt Y e a r : 20 20- 21 ) Ut k r a nt i S o lu ti on s Pv t. Lt d. A/ 4 6, 3 r d Fl oo r , N o b le s , Op p. N e h r u B r id ge , A s h r a m R o a d, Ah me da bad - 3 80 00 9 V s . I T O War d - 4 ( 1) ( 1 ) , A h me da ba d [P AN N o.A A BC U 1 6 2 0L] (Appellant) .. (Respondent) Appellant by : Shri Hemanshu Shah, C.A. Respondent by: Shri Atul Pandey, Sr. D.R. D a t e of H ea r i ng 02.01.2023 D a t e of P r o no u n ce me nt 06.01.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. CIT(Appeals), National Faceless Appeal Centre (in short “NFAC”), Delhi on 06.07.2022 for A.Y. 2020-21. 2. The grounds of appeal raised by the assessee are as under: “1. In law and in facts and circumstances of the Appellant’s case, the learned Commissioner of Income-tax (Appeals) has erred in points of law and facts. 2. In law and in facts and circumstances of the Appellant’s case, the learned Commissioner of Income-tax (Appeals) has grossly erred in dismissing the appellant’s ground in making disallowance of delay in contribution to Provident Fund Rs.3,91,035/- and to ESI for Rs.9,727/-. 3. Your appellant reserves the right to add, alter, amend all or any of the above grounds of appeal as may be advised from time to time.” 3. Return of income was filed on 28.01.2021 declaring total loss at Rs. 4,38,612/-. Intimation under Section 143(1) of the Act was passed on 24.12.2021 assessing the total income at Rs. 12,49,160/- against returned loss of RS. 4,38,612/-. There was a delay in payment of contribution towards ITA No. 323/Ahd/2022 Utkranti Solutions Pvt. Ltd. vs. ITO Asst.Year–2020-21 - 2 - Provident Fund and ESI aggregating to Rs. 4,00,762/- in respect of employees’ contribution and the same was added to the total income. The Assessing Officer disallowed the provision for contribution to gratuity of Rs. 12,87,011/- under Section 40A(7). 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. A.R. submitted that the Provident Fund dues were paid on 15.01.2020 and ESI dues were paid on 15.10.2020 which was after the statutory due dates but before the filing of return of income. The Ld. A.R. submitted that the decision of Jurisdictional High Court in case of CIT vs. Gujarat State Road Transport Corporation (2014) 41 taxmann.com 100 (Guj.) which was ultimately confirmed by the Hon’ble Apex Court in case of Checkmate Services Pvt. Ltd. vs. CIT on 12.10.2022 will not be applicable in the present case as when the order was passed, the judgment of the Apex Court was not available before both the authorities and the Gujarat High Court decision was pending in the Supreme Court. Thus the most favourable view should have been taken in present assessee’s case. The Ld. A.R. submitted that it was a debatable issue and therefore, this decision will not be applicable in the present case. The Ld. A.R. further submitted that the Amendment to Section 36 related to PF and ESI dues came in force in 01.04.2022 and therefore, the same cannot be applied retrospectively. 6. The Ld. D.R. relied upon the decision of Hon’ble Gujarat High Court in case of Gujarat State Road Transport Corporation (supra) as well as Checkmate Services Pvt. Ltd. (supra) confirming the Jurisdictional High ITA No. 323/Ahd/2022 Utkranti Solutions Pvt. Ltd. vs. ITO Asst.Year–2020-21 - 3 - Court’s view by the Hon’ble Apex Court. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. As relates to the issue related to Provident Fund dues and ESI dues it is an admitted fact the employees’ contribution was paid after the statutory limit prescribed by the respective acts. The Jurisdictional High Court in case of Gujarat State Road Transport Corporation (supra) as well the Hon’ble Apex Court in case of Checkmate Services Pvt. Ltd. (supra) has categorically mentioned that the claim made under delayed payments to PF and ESI as per the statutory limit should not be allowed as per Section 36 of the Income Tax Act. The contention of the Ld. A.R. that decision of Hon’ble Gujarat High Court was pending before the Supreme Court at that particular time and therefore, the said issue was debatable, does not sustain as the issue is crystallized by the Hon’ble Supreme Court and the orders were passed before the hearing of this appeal before the Tribunal. As regards, the Amendment to the Act this will not be applicable in the present case related to retrospectivity of this Section as the interpretation of the Hon’ble Gujarat High Court was applicable in the present case and therefore, this contention of the Ld. A.R. is rejected. Thus, the appeal of the assessee is dismissed. 8. In the result, the appeal of the assessee is dismissed. This Order pronounced in Open Court on 06/01/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 06/01/2023 TANMAY, Sr. PS TRUE COPY ITA No. 323/Ahd/2022 Utkranti Solutions Pvt. Ltd. vs. ITO Asst.Year–2020-21 - 4 - आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 03.01.2023 2. Date on which the type draft is placed before the Dictating Member 03.01.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S 04.01.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .01.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 06.01.2023 7. Date on which the file goes to the Bench Clerk 06.01.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................