Sh. Paramjeet Singh, Baddi V. ITO, Baddi,

ITA 414/CHANDI/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7085 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 16-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 6; 2; 43B; 139; 139(1); 13

Judgement Text

आयकर य कर , य य “ब ”, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’, CHANDIGARH BEFORE SMT.DIVA SINGH, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No. 414/Chd/2021 (Assessment Year: 2019-20) Paramjeet Singh, VPO Manpura, Tehsil Baddi, Baddi, Himachal Pradesh. बनाम DCIT, CPC Banaglore/ ITO Baddi Solan, HP. थायी लेखा सं./PAN NO: ARBPS0049P नधा रती क ओर से/Assessee by: Shri Ravinder Kumar Sharma, CA राज व क ओर से/ Revenue by : Dr.Ranjeet Kaur, Sr.DR स ु नवाई क तार ख/Date of Hearing: 08.03.2022 उदघोषणा क तार ख/Date of Pronouncement: 11/03/2 022 आदेश/ORDER Per Diva Singh, Judicial Member: This is an ap peal filed b y the asses se e aga inst t he or der of Lear ned Commis sioner of I ncom e Tax ( A p p e a l s ) , N a t i on a l F a c e l e s s A p p e a l C e n t r e ( N F A C ) , D e l h i [ i n s h o r t t h e ‘ L d . C I T( A ) ’ ] p assed u/s 25 0 of the Income Ta x Act, 196 1 (in shor t ‘the Act’) d ated 17.1 1.2 021 for a sse ss ment year 2 019-20 on the follow ing gr ounds : 1. The Learned CIT(A) has wrongly confirmed the addition of Rs 1397717 under section 36, when in fact the actual ESI and EPF payments were made before the due date of filing the ITR as per challans submitted before CIT(A) and Several Judicial Pronouncements are in favour of the assessee. ITA No.414/Chd/2021 A.Y.2019-20 2 2. Any other ground or grounds as may be urged at the time of hearing.” 2 . Th e r e l e v a n t f a c t s r e l a t a b l e t o t h e i s s u e a r e th a t d i s a l l o w a n c e w a s m a d e b y t h e C e n t r a l P r o c e s s i n g C e nt r e ( C P C ) , B e n g a l u r u i n t h e r e t u r n p r o c e s se d u / s 1 4 3 ( 1 ) f o r l a t e p a y m e n t o f E S I / P F e t c . a s p e r s p e c i f i c A c t . Th e a s se s s e e c a r r i e d t he i s su e i n a p p e a l b e f o r e t he F i r s t A p p e l la te A u t h o r i t y u n s u c c e s s f u l l y . Th e N a t i o n a l F a c e l e s s A p pe a l C e n t r e c o n f i r m e d t h e o r d e r re j e c t i n g t he p r a ye r o f th e a s s e s se e . Th e a s s e s s e e h a d p l e a d e d t h a t t h e p a y m e n ts w e r e m a d e w e l l i n t i m e b e f o r e t h e f i l i ng o f r e t u r n u / s 13 9 ( 1 ) o f t h e A c t a n d t h u s w i t h i n t h e d ue d a t e . Th e p r e ce d e n t r e l i e d u p o n w a s n o t a c c e p te d . A g g r i e ve d b y t h i s , t h e a s s e ss e e i s i n a p p e a l b e f o r e t he I TA T. 3 . D u r i n g t h e c o u r s e o f he a r i n g , t h e L d . A R s u b m i t te d t h a t t h e a s se s se e h a s d e p o s i te d e m p l o y e e s ’ c on t r i b ut i o n t o w a r d s E S I a n d P F t h o u g h w i t h t h e de l a y o f f e w d a ys f r o m t h e d ue d a t e m e n t i o n e d i n t he r e s p e c t i ve S t a t u t e s, h o w e v e r , t h e s a m e w a s d e p o s i t e d w e l l b e f or e t h e d u e d a te o f f i l i n g o f r e t u r n o f i n c o m e u / s 1 3 9 ( 1 ) o f t h e A c t . I t w a s s u b mi t t e d t h a t t h e s a i d f a c t i s n o t u n d e r d i s p u t e a n d w h e r e su c h c o n t r i b u t i o n h a s b e e n de p o s i te d be f o r e t h e d u e d a te o f f i l i n g o f t h e r e t u r n o f i n c o m e , n o d i s a l l o w a n c e u / s 3 6 ( 1 ) (v a ) o f t h e A c t c a n b e m a d e . I n s u p p o r t , r e l i a n c e w a s p l a c e d o n d e c i s i o n o f t h e H o n ' b l e P u n j a b & H a r y a n a H i g h C o u r t i n t h e ITA No.414/Chd/2021 A.Y.2019-20 3 c a s e o f C I T V s . H e m l a E m b r o i d e r y M i l l s ( P ) L t d . , 36 6 I TR 1 1 7 a n d t h e d e c i s i o n o f t h e H o n 'b l e S u p r e m e C ou r t in t h e c a s e o f C I T V s . A l o m E x t r u s i o n L t d . , 3 1 9 I TR 3 0 6 . It w a s f u r t h e r s u b m i t t e d t h a t t h e a f o r e s a i d d e c i s i o n s ha v e s i n c e b e e n f o l l o w e d b y t h e H o n ' b l e P u n j a b & H a r y a n a H i g h C o u r t i n t h e c a s e o f C I T V s . M a r k A u t o I n d u s t r ie s L t d . , 35 8 I TR 4 3 , C I T V s . K a m a l F a m i l y Tr u s t ( 2 0 1 3 ) , 2 1 9 Ta x m a n 81 a n d C I T V s . N u c h e m L i m i t e d , 5 9 Ta x m a n n . c o m 4 5 5 . I t w a s s u b m i t t e d t h a t t h e L d . C I T( A ) h a s r e l i e d u p o n t h e a m e n d m e n t b r o u g h t i n b y t h e F i n a n c e A c t , 2 0 2 1 w h e r ei n E x p l a n a t i o n - 5 h a s b e e n i n s e r te d . I t w a s s u b m i t t e d th a t th e s a i d a m e n d m e n t h a s b e e n i n se r t e d w .e . f . a s se s s m e n t y e a r 2 0 2 1 - 2 2 o n w a r d s a n d h a v e t o b e r e a d p r o s pe c t i ve ly an d n o t r e t r o s p e c t i ve l y a n d v a r i o u s B e nc h e s o f t h e Tr i b u n a l h a s b e e n t a k i n g a c o n s i s t e n t v ie w i n t h i s re g a r d a n d o ur r e fe r e n c e w a s d r a w n t o t h e d e c i s i o n o f t h e C h a n d i g ar h B e n c h e s o f t h e Tr i b u n a l i n t h e c a s e o f M / s C z a r s F au c e t s L i m i t e d V s . C P C i n I TA N o . 2 5 5 / C h d / 2 0 2 1 d a t e d 0 2 . 1 1 .2 0 2 1 w h e r e i n t he r e l e v a n t f i n d i n g s r e a d a s u n d e r : “4. We have heard the submissions and perused the material available on record. It is seen that in the present appeal, the assessee has only assailed the disallowance sustained by the CIT(A) vide his order passed u/s 250(6) of the Act amounting to Rs. 4,52,231/- on the grounds that the ESI & PF payments were not made within time as per the relevant Statute. The claim of the assessee that the payments were made before the ITA No.414/Chd/2021 A.Y.2019-20 4 due date of filing of the return u/s 139(1) was held to be not relevant. It is seen that the said issue as far as the present Forum is concerned, stands fully covered in favour of the assessee not only by the consistent orders of the various Benches of the ITAT namely; the order dated 03.08.2021 of the Delhi Benches in the case of Insta Exhibition Pvt. Ltd. Vs ACIT in ITA 6941/Del/2017; order dated 01.07.2021 of the Hyderabad Bench in the case of Crescent Roadways Pvt. Ltd. Vs DCIT in ITA No. 1952/Hyd/2018 but also consistent orders of the Chandigarh Bench. It is seen that all along the Co-ordinate Benches have held that the amendments to Sections 36(1)(va) and u/s 43B of the Income Tax Act effected by the Finance Act, 2021 is applicable prospectively and not retrospectively. While coming to the said conclusion, the Benches have relied upon and read from the Notes on Clauses at the time of introduction of the Finance Act, 2021 and have held that the amendment is applicable in relation to the assessment year 2021-22 and subsequent years and not retrospectively. Thus, in view of this legal position as considered by the Co- ordinate Benches and taking note of the decisions of the jurisdictional High Court in the case of CIT Vs Nuchem Limited ITA 323 of 2009 and CIT Vs Hemla Embroidery Mills Pvt. Ltd. (2014) 366 ITR 167 we are of the view that the additions cannot be made or sustained on the strength of the amendment effected by Finance Act, 2021 to Sections 36(1)(va)/43B of the Act as the legal position thereon is very clear. The departmental stand that it is clarificatory in nature has consistently been rejected. Thus, in the face of the clear legal position, as set out hereinabove, we find that the claim of the assessee is to be allowed in the year under consideration which is 2018-19 assessment year. The impugned order, accordingly, is set aside and the AO is directed to delete the disallowance. The appeal of the assessee is allowed. Said order was pronounced in the presence of the parties via Webex.” 4 . O n t h e o t he r h a n d , t h e L d . D R r e l i e d u p o n t h e a m e n d m e n t b r o u g h t i n b y t h e F i n a n c e A c t , 2 0 2 1 w h e r ei n ITA No.414/Chd/2021 A.Y.2019-20 5 E x p l a n a t i o n t o s e c t i o n 3 6 ( 1 ) ( v a ) o f t h e A c t h a s b e en i n t r o d u c e d . I t w a s s u b m i t t e d t h a t f r o m t h e r e a di n g o f t h e s a i d a m e n d m e n t i t i s e v i d e n t t h a t t h e l a w i s a n d h as a l w a y s b e e n ve r y c le a r t h a t e m p l o y e e s ’ c o n t r i b u t i o n t o s p ec i f i e d f u n d w i l l n o t b e a l l o w e d a s d e d u c t i o n u / s 3 6 ( 1 ) ( v a ) o f t h e A c t i f t h e r e i s d e l a y i n d e p o s i t e v e n b y a s i n g l e da y a s p e r t h e d u e d a te s s p e c i f i e d i n t h e re s p e c t i ve S t a t u t e s . I t w a s f u r t h e r s u b m i t t e d t h a t t h e sa i d a m e n d m e n t i s o n l y d e c l a r a t o r y / c l a r i f i c a t o r y i n n a t u r e a n d , i s , t h e r e fo r e , a p p l i c a b l e w i t h r e t r o s p e c t i ve e f fe ct b y n e c e s s a r y int e n d m e n t o f d e e m i n g n a t u r e e x p r e s s l y s t a t e d t he r e i n . T h e L d . D R a c c o r d i n g l y s u b m i t t e d t h a t i n v i e w o f t h e u na m b i g u ou s w o r d i n g o f t h e n o w a m e n d m e n t p r o v i s i o n s o f s e c t i o n s 3 6 ( 1 ) ( v a ) a n d 4 3 B , i t i s c l e a r t h a t t h e e m p l o y e e s’ c o n t r i b u t i o n c a n b e a l l o w e d a s a d e d u c t i o n o n l y i f i t h a d b e e n p a i d w i t h i n t h e p r e s c r i b e d d u e d a t e s u n d e r t h e r e le v a n t S t a t u te s a n d t h i s p o s i t i o n h a s b e e n c l a r i fi e d b y t h e a f o r e s a i d a m e n d m e n t . I t w a s a c c o r d i n g l y s u b m i t t e d th a t t h e r e i s n o i n f i r m i t y i n t h e o r d e r p a s s e d b y t h e L d. C I T( A ) w h e r e i n h e h a s s u s t a i n e d t h e d i s a l l o w a n c e m a d e u / s 1 4 3 ( 1 ) o f t h e A c t , b y th e C P C o n a c c o u n t o f a s s e s se e ’s f a il u r e to p a y t h e e m p l o y e e s ’ c o n t r i b u t i o n t o w a r d s E S I a n d P F w i t h i n t h e p r e s c r i b e d d u e d a te s a s p e r s e c t i o n 3 6 ( 1 ) ( v a ) of t h e A c t . H e a c c o r d i n g l y su p p o r t e d t h e o r d e r o f t he l o w e r a u th o r i t i e s . ITA No.414/Chd/2021 A.Y.2019-20 6 5 . W e h a v e h e a r d th e r i v a l c o n t e n t i o n s a n d p e r u s e d t h e m a t e r i a l a v a i l a b l e o n r e c o r d . I n t h e i n s t a n t c a s e , i t i s n o t i n d i s p u t e t h a t e m p l o y e e s ’ c o n t r i b u t i o n t o E S I a n d P F h a d b e e n d e p o s i te d w e l l b e f o re t h e d u e d a t e o f f i l i n g of r e t u r n o f i n c o m e u / s 1 3 9 ( 1 ) o f t h e A c t . W e f u r t h e r n o te t h a t t h o u g h t h e l d . C I T( A ) h a s n o t d i s p u t e d t h e v a r i o u s d e c i s i on s o f H o n ' b l e P u n j a b & H a r y a n a H i g h C o u r t b u t h a s d e c i d e d t o f o l l o w t he d e c i s i o n r e n d e r e d b y t h e H o n ' b l e G u j a r a t H i g h C o u r t . G i v e n t h e d i v e r g e n t v i e w s t a k e n b y t h e v a ri ou s H i g h C o u r t s a n d i n t he i n s t a n t c a se , t h e f a c t t h a t t h e ju r i s d i c t i o n o v e r t h e A s se s s i n g o f f i c e r l i e s w i t h t h e H o n ' b l e P u n j a b & H a r y a n a H i g h C o u r t , i n o u r c o n s i d e r e d v i e w , t h e I d C I T( A ) o u g h t t o h a v e c o n s i de r e d a n d f o l l o w e d t he d ec i s i o n o f t h e j u r i s d i c t i o n a l P u n j a b & H a r ya n a H i g h C o u r t , a s e v i d e n t f r o m s e r i e s o f d e c i s i o n s r e fe r r e d s u p r a , a s t h e s a me i s b i n d i n g o n a l l t h e a p p e l l a te a u t h o r i t i e s a s w e l l a s t h e A s s e s s i n g o f f i ce r u n d e r i t s j u r i s d i c t i o n i n t h e S t at e o f P u n j a b & H a r y a n a . W e f u r t he r n o t e t h a t t h e l d C I T( A) h a s r e fe r r e d t o t h e a m e n d m e n t b r o u g h t i n b y t h e F i n a n c e A c t , 2 0 2 1 w h e r e i n a n e x p l a n a t i o n h a s b e e n i n t r o d u c e d to S e c t i o n s 3 6 ( 1 ) ( v a ) a n d u / s 4 3 B o f t h e I n c o m e Ta x A ct . I t i s a c o n s i s t e n t p o s it i o n a c r o s s v a r i o u s B e n c h e s o f t h e Tr i b u n a l i n c l u d i n g C h a n d i g a r h B e n c h e s t h a t t h e a m e n d m e n t w h ic h h a s b e e n b r o u g ht i n b y t h e F i n a n c e A c t , 2 0 2 1 sh a l l a p p l y ITA No.414/Chd/2021 A.Y.2019-20 7 w . e . f . a s s e s s m e n t y e a r 2 0 2 1 - 2 2 a n d s u b s e q ue n t a s s e ss m e n t y e a r s a n d t h e i m p u g n e d a s s e s s m e n t y e a r b e i n g a s s e s sm e n t y e a r 2 0 1 9 - 2 0 , t h e s a i d a m e n d m e n t c a n n o t b e a p p l i e d i n th e i n s t a n t c a s e . Th e r e f o r e , c o n s i d e r i n g t h e e n t i r e t y of f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d f o l l o w i n g t h e de c i s i on s o f v a r i o u s H i g h C o u r t s a s w e l l a s C o o r d i n a t e B e n c h e s of th e Tr i b u n a l r e f e r r e d a b o v e , t h e a d d i t i o n m a d e b y w a y of a d j u s t m e n t w h i l e p r o c e s s i n g t he r e t u r n o f i n c o m e u /s 1 4 3 ( 1 ) o f t h e A c t , a m o u n t i n g t o R s . 1 3 , 9 7 , 7 1 7 / - s o ma d e b y t h e C P C t o w a r d s t h e d e p o s i t of e m p l o y e e s ’ c o n t r i b u ti o n t o w a r d s E S I a n d P F p a i d b e f o r e th e d u e d a te o f f i l in g o f t h e r e t u r n o f i n c o m e u / s 1 3 9 ( 1 ) o f t h e A c t , i s h e r e b y di r e c te d t o b e d e l e t e d . 6 . I n t he r e s u l t , t h e a p p e a l o f t he a s s e s se e i s a l lo we d . O r d e r p r o n o u n c e d o n 1 1 / 0 3 / 2 0 2 2 . S d / - S d / - (VIKRAM SINGH YADAV) (DIVA SINGH) /Accountant Member /Judicial Member Dated: 11/03/2022 *रती* आदेश क % त&ल'प अ*े'षत/ Copy of the order forwarded to : 1. अपीलाथ+/ The Appellant 2. %,यथ+/ The Respondent 3. आयकर आय ु -त/ CIT 4. आयकर आय ु -त (अपील)/ The CIT(A) 5. 'वभागीय % त न0ध, आयकर अपील य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File # $ स / By order, सह (ंज / Assistant Registrar ITA No.414/Chd/2021 A.Y.2019-20 8