BABA BEARINGS PVT LTD, BORANADA V. DCIT, BANGALORE

ITA 59/JODH/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9098 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 31-10-2022
• Assessment Year: 2018-2019
• Appeal Filed On: 01-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Deemed to accrue or arise in india
• Section: 43B; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. 59/Jodh/22 (ASSESSMENT YEAR- 2018-19 ) M/s. Baba Bearings Pvt. Ltd F-93 & 94, Industrial Area Boranada, Jodhpur-342 001 Vs The ITO Ward -3 (3) JODHPUR (Appellant) (Respondent) PAN NO. AAACB 5639 B Assessee By Shri G.S.Mehta, CA Revenue By Shri Venkatesh V (JCIT-DR) Date of hearing 01/11/2022 Date of Pronouncement 2 /11/2022 O R D E R PER: SANDEEP GOSAIN, JM This is an appeal filed by the assessee against order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 29-09-2021 for the assessment year 2018-19 raising therein solitary ground of appeal as under:- 2 ITA NO.59/JPDH/2022 BABA BEARINGS PVT LTD. VS. ITO, WARD 3(3), JDOHPUR 1. The Ld. CIT(A) is not justified in confirming the addition of Rs.3,08,878/- related to the payment of contribution to ESI and PF respectively. 2.1 During the course of hearing, the Bench observed that there is delay of 155 days in filing the appeal by the assessee for which the assessee filed an application alongwith affidavit praying therein to condone the delay on the ground that delay in filing the appeal was due to COVID 19 spread in the office as well as in the home of Directors. The Accountant left office due to some technical problem arose between him and the company. The dispute among the family of Ex-Director wife and other Directors also hampered the office working and the consultant has left to USA in the month of Feb. 2022. Thus due to various difficulties arose in the office working, the assesse could not file the appeal in time. 2.2 On the other hand, the Ld. DR objected to the submissions of the assessee in late filing the appeal. 2.3 We have heard both the parties and perused the materials available on record. The Bench noted that due to COVID-19 spread in the country the working of various offices hampered and it was difficult for them under this critical condition. In this view of the matter, the Bench feels that the assessee is prevented by sufficient cause in late filing the appeal which is condoned. 3 ITA NO.59/JPDH/2022 BABA BEARINGS PVT LTD. VS. ITO, WARD 3(3), JDOHPUR 3.1 The solitary issue raised by the assessee in this appeal relates to late deposit of employees contribution towards PF and ESI. Brief facts of the case are that the assessee filed the return of income on 25-09-2018 alongwith the Tax Audit Report. The CPC, Bangalore made the addition of Rs.3,08,878/- on account of delay payment of employees contribution towards ESI and PF. However, the entire amount of PF and ESI was deposited by the assessee before the due date of filing of return of income. The return of income of the assessee was processed u/s 143(1) of the Act but the AO disallowed the amount of Rs.3,08,878/- because of not timely deposit of the employees contribution of PF and ESI under respective laws which in first appeal was confirmed by the Ld. CIT(A) holding as under:- ‘’5.2 Since the law now clearly states that the provisions of Section 43B shall not apply and was deemed never to apply for the purpose of determining the ‘’due date’’ for Section 36(1)(va) of the Act, any payment made after the due date as specified under the PF Act shall not be allowable as a deduction.’’ 3.2 During the course of hearing, the ld. AR prayed that the ld. CIT(A) erred in sustaining the addition of Rs.3,08,878/- in respect of employees contribution to PF and ESI which should be deleted. 3.3 On the other hand, the ld. DR relied on the order of the ld. CIT(A). 4 ITA NO.59/JPDH/2022 BABA BEARINGS PVT LTD. VS. ITO, WARD 3(3), JDOHPUR 3.4 After hearing both the parties, it is noticed that the AO made the addition of Rs.3,08,878/- on account of late deposit of PF & ESI contribution of the employee’s by the assessee in the light of provision of Section 2(24)(x) r.w.s. 36(1)(va) of the Act by holding it deemed income and subjected to tax in the hands of the employer which in first appeal was confirmed by the ld. CIT(A) holding that the said late payments are not covered under section 43B of the Act and thus the ld. CIT(A) dismissed this ground of the assessee. However, the Bench noted that the assessee has deposited employees contribution towards PF & ESI before due date of filing of return. Recently, the Hon’ble Supreme Court has in the case of Checkmate Services Pvt. Ltd. Vs CIT-1, 143 Taxmann.com 178 (SC)/Civil Appeal No. 2833 of 2016 held that the provision of Section 43B of the Act shall not apply to employee’s contribution to PF/ESI and the due date specified u/s 36(1)(va) of the Act shall apply for determination of deductibility of employee’s contribution to PF/ESI. Accordingly, in view of the aforesaid judgement of Hon’ble Supreme Court (supra), the issue in the appeal being similar in nature is remanded back to the file of ld. CIT(A) for afresh adjudication by providing adequate opportunity of being heard to the assessee and the assessee is directed to submit the necessary details/documents concerning the issue in question before the ld. CIT(A) in order to square up the case. Further, the assessee is also at liberty to take any other plea before the ld. CIT(A), if so advised. Thus the appeal of the assessee is allowed for statistical purposes. 5 ITA NO.59/JPDH/2022 BABA BEARINGS PVT LTD. VS. ITO, WARD 3(3), JDOHPUR 4.0. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 2/11/2022 . Sd/- Sd/- (B. R. BASKARAN) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 2/11/2022 *Mishra Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR 6. Guard File Assistant Registrar Jodhpur Bench