DCIT Circle III (1), Ludhiana V. M/s Godson Knitting Works, Ludhiana

ITA 346/CHANDI/2021

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax, Circle-1, Ludhiana against M/s Godson Knitting Works concerning an order by the National Faceless Appeal Centre (NFAC), Delhi, which had allowed the assessee's appeal for the Assessment Year 2019-20. The primary issue in the original dispute was the disallowance of Rs.55,501/- by the Centralized Processing Centre, Bangalore, due to late deposit of EPF and ESI dues related to employees' contributions. The Department challenged the NFAC's decision, arguing that the CIT(A) erred in law and fact by deleting the addition/disallowance made by the Assessing Officer. However, the ITAT dismissed the appeal based on the monetary threshold set by the CBDT for filing appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128420 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-03-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 08-11-2021
• Other Referred Cases: M/s Vedvan Consultants Pvt Ltd., New Delhi ITA No.l312/Del/2020 dated 26.08.2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Tax effect
• Section: 43B; 143(1); 268A

Judgement Text

आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ,चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “A”, CHANDIGARH BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.346/CHD/2021 Ǔनधा[रणवष[ / Assessment Year :2019-20 Dy. Commissioner of Income Tax, Circle-1, Ludhiana बनाम M/s Godson Knitting Works, B-XXV-543/6/6, Sekhewal Road, New Shivpuri, Ludhiana èथायीलेखासं./PAN NO: AAAFG 9362R अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Ǔनधा[ǐरतीकȧओरसे/Assessee by :None राजèवकȧओरसे/ Revenue by : Smt. Tarundeep Kaur, Sr.DR स ु नवाईकȧतारȣख/Date of Hearing :15.03.2023 उदघोषणाकȧतारȣख/Date of Pronouncement : 06.06.2023 आदेश/Order Per Sudhanshu Srivastava, Judicial Member: This appeal is preferred by the Department against order dated 08.09.2021 passed by the National Faceless Appeal Centre, (NFAC), Delhi for Assessment Year 2019-20, wherein the appeal of the assessee was allowed. 2.0 In the appeal before the NFAC, the assessee had challenged the disallowance made by the Centralized Processing Centre, Bangalore, (CPC) in intimation passed ITA No. 346-Chd-2021 (A.Y. 2019-20) - M/s Godson Knitting Works, Ludhiana 2 u/s. 143(1) of the Income Tax Act, 1961 (hereinafter called ‘the Act’), amounting to Rs.55,501/- on account of late deposit of EPF and ESI dues pertaining to the employees’ contribution. 3.0 The grounds raised by the Department in this appeal are as under: “1. That the Ld. CIT(A) erred in law, in deleting addition/disallowanceof Rs.55,501/- made by the Assessing Officer in respect of delayed payment of employee's contribution, beyond the prescribed time,to the Welfare Funds like EPF/ESI etc. 1(a) That the Ld. CIT(A) erred on facts and law ignoring the distinction between provision of section 36(l)(v) r.w.s 43B and provisions of section 36(l)(va) r.w.s 2(24)(x) of the Income Tax Act, 1961, which clearly provide for different treatment. While the delayed payment of employers contribution is allowable if found before the filing of return wherever employee's contribution is disallowed for once and all if payment is delayed beyond the prescribed time. 1(b) That the Ld. CIT(A) erred in ignoring and failing to take into account the amendment carried out by Finance Act, 2021 by way of inserting Explanation 1 & Explanation 2 below section 36(1 )(va) of the Act which has been interpreted by the Hon'ble Appellate Tribunal, Delhi Bench in M/s Vedvan Consultants Pvt Ltd., New Delhi ITA No.l312/Del/2020 dated 26.08.2021 which was held that the aforesaid explanation was clarificatory. ITA No. 346-Chd-2021 (A.Y. 2019-20) - M/s Godson Knitting Works, Ludhiana 3 2. That the Ld. CIT(A) erred in ignoring the Circular No. 22/2015issued by the CBDT.” 4.0 None was present on behalf of the Respondent- assessee when the appeal was called out for hearing and also no adjournment application was filed in this regard. However, looking into the facts and circumstances of the case, we deem it appropriate to proceed with the hearing of the appeal ex-parte qua the respondent-assessee. 5.0 Admittedly, the tax effect involved in this appeal is only Rs.19,394/- and, therefore, the same is much below the prescribed limit of Rs.50.00 lacs which has been fixed by the CBDT for filing of appeals before the ITAT by the Income Tax Department. The Central Board of Direct Taxes, vide Circular No.17/2019, dated 8th August, 2019, F. No.270/Misc.142/2007-ITJ(Pt.), has issued the direction in supersession of the Circular No. 3/2018 dated 11th July, 2018, F.No.279 of Misc.142/2007-ITJ (Pt.), in consonance with the power entrusted under section 268A of the Income Tax Act, 1961 that no appeal should be filed before the Tribunal in case the tax effect does not exceed Rs.50 lakhs. Therefore, in view of the aforesaid CBDT Circular, the present appeal filed by the Department is not maintainable and the same is dismissed. ITA No. 346-Chd-2021 (A.Y. 2019-20) - M/s Godson Knitting Works, Ludhiana 4 6.0 In the final result, the appeal of the Department stands dismissed. (Order pronounced in the open Court on 06.06.2023) Sd/- Sd/- (VIKRAM SINGH YADAV) (SUDHANSHU SRIVASTAVA) Accountant Member Judicial Member Dated :06.06.2023 Aks/- आदेशकȧĤǓतͧलͪपअĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकरआय ु Èत/ CIT 4. आयकरआय ु Èत (अपील)/ The CIT(A) 5. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयआͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 6. गाड[फाईल/ Guard File आदेशान ु सार/ By order, सहायकपंजीकार/ Assistant Registrar