DCIT, Circle- 10(2), New Delhi V. Crescent EPC Projects and Technical Services Ltd. (Earlier known as GVK Projects and Technical Services Ltd.), Secunderabad

ITA 399/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4340 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 18-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Question of law
• Section: 43B; 14A; 201; 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.399/DEL/2019 ASSESSMENT YEAR: 2015-2016 DCIT, CENTRAL-10(2), NEW DELHI. VS. CRESCENT EPC PROJECTS AND TECHNICAL SERVICES LTD. (EARLIER KNOWN AS GVK PROJECTS AND TECHNICAL SERVICES LTD.) SECUNDERABAD. TAN/PAN: AAACU9200F (APPELLANT) (RESPONDENT) APPELLANT BY: MS. CHANDANI SHAH, CA RESPONDENT BY: DR. MANINDER KAUR, SR.D.R. DATE OF HEARING: 27 09 2021 DATE OF PRONOUNCEMENT: 27 09 2021 O R D E R PER AMIT SHUKLA, JM THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 15.10.2018, PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-IV, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S.143(3) FOR THE ASSESSMENT YEAR 2015-16. IN VARIOUS GROUNDS OF APPE AL, THE REVENUE HAS CHALLENGED THE DELETION OF DISALLOWANCE OF 14A OF RS.4,43,31,582/- AND DELETION OF ADDITION OF RS.3,5 1,066/- MADE U/S.36(1)(VA) ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO THE PROVIDENT FUND AND ES I. 2. AT THE THRESHOLD, LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT IN SO FAR AS DISALLOWANCE U/S.14A IS CONCERNED , IT IS AN I.T.A. NO.399/DEL/2019 2 ADMITTED FACT THAT THERE IS NO DIVIDEND INCOME HAS BEEN RECEIVED BY THE ASSESSEE DURING THE YEAR, AND THERE FORE, NO DISALLOWANCE U/S. 14A CAN BE MADE. THIS HE POINTED OUT, IS EVIDENT FROM PARAGRAPH 5.8 OF THE APPELLATE ORDER. APART FROM THAT, THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2011-12 AND 2013-14 IN ITAS NO.4216 AND 4217/DEL/2016 HAS DECIDED THE ISSUE IN FAVOUR OF TH E ASSESSEE. 3. IN SO FAR AS THE DELETION OF AMOUNT OF RS.3,51,0 06/- TOWARDS PF (EMPLOYEE CONTRIBUTION) AFTER THE DUE DA TE UNDER PF REGULATION BUT BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME, I.E., 30 TH NOVEMBER, 2015, HE SUBMITTED THAT THE SAME ALSO STANDS COVERED BY THE CATENA OF JUDGMENTS INCLUDING THAT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. AIMIL LTD. AS REPORTED IN (2010) 321 ITR 508 AND PCIT VS. PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. IN ITA NO. 983 OF 2018 (DELHI) . FURTHER, IN SUPPORT, SHE ALSO RELIED UPON THE FOLLOWING JUDGMENTS, THE COPY OF WH ICH HAS BEEN PLACED IN THE PAPER BOOK. SR. NO. CASE-LAW CITATION PAGE NO. 1. INDIAN GEOTECHNICAL SERVICES VS ACIT. ITA NO. 622/DEL/20I8 (DEL. TRIB.) 1-18 2. CRESCENT ROADWAYS PRIVATE LIMITED VS DCIT ITA NO. 952/HYD/2018 (HYD. TRIB.) 19-21 3- HARENDRA NATH BISWAS VS DCIT ITA NO. 186/K0I/2021 (KOL. TRIB.) 22-25 4- SALZGITTER HYDRAULICS PVT. LTD. VS ITO [2021] 128 TAXMANN.COM 192 (HYD. TRIB.) 26-27 5- VALUE MOMENTUM SOFTWARE SERVICES PVT. LTD. VS DCIT ITA NO. 2197/HYD/2017 (HYD. TRIB.) 28-31 I.T.A. NO.399/DEL/2019 3 6. CIT VS VINAY CEMENT LTD. [2007] 213 CTR 268 (SC) 32 7. CIT VS AIMIL LTD. [2010] 321ITR 508 (DEL. HC) 33-38 8. PCIT VS PRO INTERACTIVE SERVICE (INDIA) PVT LTD. ITA NO 983 OF 2018 (DEL. HC) 39 9. PAWAN KUMAR VS ACIT ITA NO 1632/DEL/2018 (DEL. TRIB.) 40-44 10. PPIT VS PLANMAN HR PVT LTD ITA NO 5053/DEL/2015 (DEL. TRIB.) 45-53 11. DCIT VS. DEE DEVELOPMENT ENGINEERS LTD . ITA NO. 4959/DEL/2016 (DEL. TRIB.) 54-61 12. AZAMGARH STEEL & POWER PVT. LTD. VS CPC ITA NO. 1626/DEL/2020 (DEL. TRIB.) 62-67 13. YOGI JI TECHNOEQUIP PVT. LTD. VS DCIT [2021] 129 TAXMANN.COM 313 (DEL. TRIB.) 68-70 14. EXTRACT OF FINANCE BILL, 2021 AND ANORANDUM TO THE FINANCE BILL, 2021 71-74 15. DCIT VS. BHARAT PUMPS & COMPRESSORS LTD. ITA NO. 147/ALLD/2016 (ALLD. TRIB.) 75-152 4. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON T HE ORDER OF THE ASSESSING OFFICER. 5. AFTER CONSIDERING THE AFORESAID SUBMISSIONS AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT IN SO FAR AS DISALLOWANCE U/S.14A IS CONCERNED, IT IS AN ADMITTE D FACT THAT ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME DURING TH E YEAR UNDER CONSIDERATION, AND THEREFORE, THERE WAS NO QU ESTION OF MAKING ANY DISALLOWANCE U/S.14A. THIS PROPOSITION I S SQUARELY COVERED BY THE DECISION OF HONBLE DELHI H IGH COURT IN THE CASE OF CHEMINVEST LTD. VS. CIT, (2015) 378 ITR 33 (DEL) WHICH HAS ALSO BEEN FOLLOWED BY THE HONBLE D ELHI HIGH COURT IN THE CASE OF GVK PROJECT LTD. IN ITA NO.646/2018 . THUS, THE ORDER OF THE CIT (A) DELETING THE DISALLO WANCE IS I.T.A. NO.399/DEL/2019 4 UPHELD AND THE GROUNDS RAISED BY THE REVENUE ON THI S SCORE FROM 1 TO 5 ARE DISMISSED. 6. NOW COMING TO THE ISSUE OF DISALLOWANCE OF PAYME NT MADE TO EMPLOYEES CONTRIBUTION TO PF AND ESI, IT I S NOT IN DISPUTE THAT THE ASSESSEE HAD MADE THE PAYMENT AFTE R DUE DATE UNDER THE PF REGULATION BUT BEFORE THE DUE DAT E OF FILING OF RETURN, I.E., 30 TH NOVEMBER, 2015. THE DETAILS OF CONTRIBUTION MADE BY THE COMPANY ARE AS UNDER: SL N O MONTH DUE DATE OF DEPOSITING DATE OF DEPOSIT NO. OF DAYS OF DELAY AMOUNT OF EMPLOYEE CONTRIBUTION (INR) 1. MAY 2014 15 JUNE 2014 26 JUNE 2014 6 DAYS 151,098 2. AUGUST 201 15 SEPT. 2014 17 SEPT 2014 2 DAYS 122,564 3. FEB. 2015 15 MARCH 2015 16 MARCH 2015 1 DAY 77,404 TOTAL 3,51,066 7. FIRST OF ALL, MOST OF THESE PAYMENTS HAVE BEEN M ADE WITHIN THE GRACE PERIOD ALLOWED UNDER THE PF REGULA TION PROVISION. APART FROM THAT, THERE ARE CATENA OF JUD GMENTS IN FAVOUR OF THE ASSESSEE AS LISTED ABOVE INCLUDING TH OSE OF HONBLE JURISDICTIONAL HIGH COURT. IN THE JUDGMENT O F PCIT VS. PRO INTERACTIVE SERVICE (INDIA) PVT. LTD. IN IT A NO. 983 OF 2018 (DELHI) , THE HONBLE HIGH COURT VIDE JUDGMENT AND ORDER DATED 10 TH SEPTEMBER, 2018 FOLLOWING THE EARLIER JUDGMENT OF CIT VS. AIMIL LTD. (SUPRA) HAD DECIDED THIS ISSUE IN THE FOLLOWING MANNER: IN VIEW OF THE JUDGMENT OF THE DIVISION BENCH OF D ELHI HIGH COURT IN COMMISSIONER OF INCOME TAX VERSUS AIMIL LIMITED, (2010) 321 I.T.A. NO.399/DEL/2019 5 ITR 508 (DEL) THE ISSUE IS COVERED AGAINST THE REVE NUE AND, THEREFORE, NO SUBSTANTIAL QUESTION OF LAW ARISES FO R CONSIDERATION IN THIS APPEAL. THE LEGISLATIVE INTENT WAS/IS TO ENSURE THAT THE AM OUNT PAID IS ALLOWED AS AN EXPENDITURE ONLY WHEN PAYMENT IS ACTU ALL MADE. WE DO NOT THINK THAT THE LEGISLATIVE INTENT AND OBJECT IVE IS TO TREAT BELATED PAYMENT OF EMPLOYEES PROVIDENT FUND (EPD) AND EMPLOYEES STATE INSURANCE SCHEME (ESI) AS DEEMED I NCOME OF THE EMPLOYER UNDER SECTION 2(24)(X) OF THE ACT. APPEAL IS DISMISSED. 8. THOUGH, IT WAS BROUGHT TO OUR NOTICE THAT AN AMENDMENT HAS BEEN BROUGHT IN THE STATUTE BY THE FI NANCE BILL, 2021 BY BRINGING AMENDMENT IN SECTION 36(1)(V A) BY WAY OF INSERTION OF EXPLANATION 2 WHEREIN IT HAS BEEN PROVIDED THAT SECTION 43B SHALL NOT APPLY FOR THE PURPOSE OF DETE RMINING THE DUE DATE UNDER THIS CLAUSE. HOWEVER, THE SAID A MENDMENT HAS BEEN BROUGHT W.E.F. ASSESSMENT YEAR 2021-22 AS EXPLAINED IN CLAUSES (8) AND (9) OF THE MEMORANDUM EXPLAINING THE FINANCE BILL, 2021. ONCE THE AMENDME NT HAS BEEN BROUGHT FROM PROSPECTIVE DATES AND ALSO EXPLAI NED IN THE SAID MEMORANDUM OF THE FINANCE BILL, THEN THE DECIS ION OF HONBLE JURISDICTIONAL HIGH COURT WOULD BE APPLICAB LE. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. HENCE, THE ORDER OF THE LD. CIT(A) ON THIS ISSUE IS ALSO UPHELD. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ABOVE DECISION WAS ANNOUNCED ON CONCLUSION OF VIRTU AL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 27 TH SEPTEMBER, 2021 I.T.A. NO.399/DEL/2019 6 SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: /09/2021 PKK: