Wings Biotech LLP, Delhi V. ACIT, Circle-44(1), Delhi

ITA 531/DEL/2023

AI Insights

Wings Biotech LLP appealed against the order of the CIT(A), which had arisen from a rectification order passed by the AO under sections 154 and 143(1) of the Income Tax Act, 1961. The primary contention was regarding the disallowance of payments made on account of employees' shares to ESIC and PF, and the charging of interest under sections 234B and 234C. The Tribunal examined the timing of the payments and the applicability of Section 10 of the General Clauses Act, which influenced the decision on the disallowance of the deposit dated 16.05.2016. Additionally, the Tribunal acknowledged the need to examine the assessee's claim for deductions under Section 80C, which was not addressed in the initial proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113975 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 01-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 26-02-2023
• Other Referred Cases: Checkmate Services (P.) Ltd. vs CIT (2022) 143 taxmann.com 178 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 10; 154; 80C; 37(1); 143(1); 80IC; 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘H’ : NEW DELHI) BEFORE SH. M. BALAGANESH, ACCOUNTANT MEMBER AND SH.ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 531/Del/2023, A.Y. 2017-18 Wings Biotech LLP C/o. Anil Jain DD & Co., 611, Surya Kiran Building, 19K.G. Marg, Delhi PAN : AAAFW9631P Vs. ACIT Circle-44(1) New Delhi Appellant Respondent Assessee by Sh. Anil Jain, CA Revenue by Sh. Amit Katoch, Sr. DR Date of hearing: 02.08.2023 Date of Pronouncement: 07.08.2023 ORDER Per Anubhav Sharma, JM : The appeal has been preferred by the Assessee against the order dated 19.01.2023 of CIT(A), National Faceless Appeal Centre (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Order No. ITBA/NFAC/S/250/2022-23/1048913110(1) arising out of an appeal before it against the order dated 07.08.2020 passed u/s 154 r.w.s 143(1) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ACIT, Circle-44(1), Delhi (hereinafter referred as the Ld. AO). 2. Heard and perused the record. 531/Del/2023 2 3. The assessee has raised following grounds ; “1. That on the facts and circumstances of the case and the provision of law the Ld. CIT (A) has failed to appreciate that impugned order passed U/s 154 of the IT Act, is illegal, bad in law, without jurisdiction and contrary to the facts. 2. That the Ld. CIT (A) has failed to appreciate that the impugned rectification order passed by the Ld AO is against the principles of natural justice and has been passed without affording reasonable opportunity of being heard. 3. That on the facts and circumstances of the case and the provisions of the law, the Ld. CIT (A) has failed to appreciate the fact that the Ld. AO has erred in disallowing the payment of Rs.22,19,980 made on account of employees share to ESIC and PF. 4. That without prejudice to the above ground, the payment made on account of employees share to ESIC & PF is allowable as business expenses u/s 37(1) of the IT Act. 5. That the Ld. CIT (A) has failed to appreciate the fact that the learned assessing officer has erred in law in charging of interest u/s 234B and 234C of the IT Act. 6. That the appellant craves leave to reserve to itself the right to add, alter amend, vary, modify and/or withdraw and ground(s) of appeal at or before the time of hearing.” 4. At the time of arguments it was submitted on behalf of the assessee that in regard to three entries of due date of payment 15.05.2016 the actual date of payment 16.05.2016 being Sunday, Ld. Tax Authorities have failed to appreciate that and made disallowance. In this regard taking into consideration Section 10 of General Clauses Act to the deposit on 16.05.2016, the said deposits cannot be considered to be deposited after due date of deposit. 4.1 Further, it comes up that even otherwise the case of assessee is that assessee unit is entitled for deduction u/s 80C and the income to extent of 25% in the 8 th year of operation is allowable for exempt. This aspect however does 531/Del/2023 3 not appear from the material before the Bench and requires examination of issue. 5. Accordingly, the grounds with regard to the disallowance u/s 36(1)(va) of the Act to the extent of deposit dated 16.05.2016 is allowed while in regard to remaining delayed deposits, the reliance of Ld. CIT(A) on the decision of hon’ble Supreme Court in Checkmate Services (P.) Ltd. vs CIT (2022) 143 taxmann.com 178 (SC) requires no interference. Consequently, the appeal of assessee is allowed partly. The Ld. AO shall also take into consideration the claim of assessee for the purpose of Section 80IC of the Act and extend the relief as per the entitlement of the assessee, qua the additions also. Order pronounced in the open court on 07 th August, 2023. Sd/- Sd/- (M. BALAGANESH) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:-07.08.2023 *Binita, SR.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI