A Design India Pvt Ltd, New Delhi V. ITO WARD - 1(1), New Delhi

ITA 5915/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0506 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Assessee Lawyers: SATYAJI GOEL
• Keywords: Opportunity of being heard
• Section: 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: A, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.5915/DEL./2019 ASSESSMENT YEAR: 2016-17 A DESIGN INDIA PVT. LTD., S-126, GK-II, SOUTH DELHI, NEW DELHI VS. ITO, WARD-1(1), NEW DELHI PAN :AAHCA0593J (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 30/04/2019 PASSED BY THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS)-I, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2016-17 RAISING FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF C ASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CO NFIRMING THE ADDITION OF RS. 4,16,161/- ON ACCOUNT OF DELAY IN D EPOSIT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND WITHOUT A PPRECIATING THE FACT THAT THE SAME AMOUNT WAS DULY PAID BEFORE FILI NG OF INCOME APPELLANT BY SHRI SATYAJI GOEL, ADV. RESPONDENT BY SHRI SATPAL GULATI, CIT(DR) DATE OF HEARING 10.12.2020 DATE OF PRONOUNCEMENT 23.12.2020 2 ITA NO.5915/DEL./2019. TAX RETURN AND WITHIN THE TIME LIMIT SPECIFIED U/S 139(1) OF THE INCOME TAX ACT,1961. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF C ASE AND IN LAW, THE LD COMMISSIONER OF INCOME TAX (APPEAL) WAS NOT JUST IFIED IN UPHOLDING THE DISALLOWANCE SOLELY ON THE BASIS OF T YPOGRAPHICAL MISTAKE IN TAX AUDIT REPORT AND WITHOUT PROVIDING A NY OPPORTUNITY OF BEING HEARD. 3. THAT ENTIRE EMPLOYEES CONTRIBUTION TO PROVIDEN T FUND HAVING BEEN DEPOSITED BEFORE TIME LIMIT SPECIFIED U/S 139(1) AN D SAME BEING DULY CORROBORATED FROM RELEVANT CHALLANS, THE IMPUG NED DISALLOWANCE IS MISCONCEIVED AND NOT SUSTAINABLE. 4. THAT THE APPELLANT RESERVES THE RIGHT TO AMEND, DELETE, ADD, SUBSTITUTE, MODIFY OR ALTER ANY ONE OR MORE OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. THE APPELLANT PRAYS THAT THE ADDITION OF RS. 4,16,1 61 /- MADE IN RESPECT OF DELAY IN DEPOSIT OF PROVIDENT FUND BE DE LETED. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT IN THE S CRUTINY ASSESSMENT DATED 12/12/2018 PASSED UNDER SECTION 14 3(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), THE ASSE SSING OFFICER MADE DISALLOWANCE OF 5,53,851/- FOR EMPLOYEES CONTRIBUTION TO PROVIDENT FUND UNDER SECTION 36(1)(VA) OF THE ACT. ON FURTHER APPEAL, THE LD. CIT(A) ALLOWED PART RELIEF OF 1,37,690/- AND SUSTAINED THE REMAINING ADDITION OF 4,16,161/-. AGGRIEVED, THE ASSESSEE IS BEFORE THE TRIBUNAL RAISING THE GROUND AS REPRODUCED ABOVE. 3. BEFORE US, BOTH THE PARTIES APPEARED THROUGH VIDEOCONFERENCING FACILITY. 4. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT ALL THE PAYMENTS FOR EMPLOYEES CONTRIBUTION TOWARD PROVIDEN T FUND HAD BEEN MADE BEFORE THE DUE DATE OF THE FILING OF THE RETURN OF 3 ITA NO.5915/DEL./2019. INCOME, HOWEVER, THE LD. CIT(A) HAS WRONGLY NOTED P AYMENT OF 4,16,161/- AS AFTER THE FILING OF RETURN OF INCOME. HE SUBMITTED THAT IN PRINCIPLE THE LD. CIT(A) HAS AGREED THAT P AYMENTS MADE PRIOR TO THE DUE DATE OF THE FILING OF RETURN OF IN COME ARE ELIGIBLE FOR DEDUCTION, HOWEVER, HE COMMITTED ERROR IN VERIF YING THE DATE OF PAYMENTS. ACCORDINGLY, THE LEARNED COUNSEL SUBMITTE D THAT MATTER OF VERIFICATION MAY BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) OR THE ASSESSING OFFICER. 5. THE LD. DR THOUGH RELIED ON THE ORDER OF THE LOWER AUTHORITIES, DID NOT OBJECT FOR VERIFICATION OF DAT E OF PAYMENTS IN DISPUTE BY THE ASSESSING OFFICER OR BY THE LD. CIT( A). 6. WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON TH E ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON REC ORD. WE FIND THAT THE LD. CIT(A) FOLLOWING THE DECISION OF THE H ONBLE DELHI HIGH COURT IN THE CASE OF CIT VS AIMIL LTD (2010) 32 1 ITR 508 HAS ACCEPTED THE CLAIM OF THE DEDUCTION FOR PAYMENT S OF EMPLOYEES CONTRIBUTION TO ESI/PF AND ACCORDINGLY RE STRICTED THE DISALLOWANCE FOR PAYMENTS MADE AFTER THE DATE OF TH E FILING OF THE RETURN OF INCOME. THE FINDING OF THE LD. CIT(A) IS REPRODUCED AS UNDER : MY PREDECESSOR FOR AY 2015-16 IN THE APPELLANTS O WN CASE HAS DECIDED AS UNDER: I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AN D WRITTEN SUBMISSIONS FILED BY THE LD. AR. THE AO HAS INVOKED THE PROVISIONS OF SECTION 36(1)(VA) READ WITH SECTION 2 (24)(X) OF THE ACT AND TREATED THE DELAYED PAYMENT OF RS. 2,27,624 /- EMPLOYEES CONTRIBUTION TO PF AND ESI AS APPELLANT' S INCOME. THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LTD. (2010) 321 ITR 508 HAS HELD THAT THE ASSESSEE CAN G ET THE 4 ITA NO.5915/DEL./2019. BENEFIT OF DEDUCTION IF THE PAYMENT IS MADE BEFORE THE RETURN IS FILED, AS PER THE PRINCIPLE LAID DOWN BY THE HON 'BLE SUPREME COURT IN THE CASE OF CIT VS. M/S VINAY CEMENT LTD. 213 ITR 268.1 FIND THAT THE APPELLANT HAS PAID THE EMPLOYEE S CONTRIBUTION TO PROVIDENT FUND AND ESI BEFORE THE D UE DATE OF FURNISHING THE RETURN U/S 139(1) OF THE I. T. ACT, 1961. IN VIEW OF THE LEGAL POSITION ON THE ISSUE, IT IS HELD THAT THE AO WAS NOT JUSTIFIED IN MAKING THE DISALLOWANCE OF RS. 2,2 7,624/- WHICH IS ORDERED TO BE DELETED. THIS GROUND OF APPE AL IS RULED IN FAVOUR OF THE APPELLANT. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AN D WRITTEN SUBMISSIONS FILED BY THE LD. AR. I HAVE ALSO PERUSE D PAGE NUMBER 93 OF THE SUBMISSIONS. THE FOLLOWING PAYMENTS WERE MADE AFTER THE DUE DATE IN THE CASE OF THE APPELLANT COMPANY: (I) RS 1,34,000/- PAID ON 2016-10-20, (II) RS 1,39,868/- PAID ON 2016 -11-19 AND (III) RS 1,42,293/- PAID ON 2016-12-18 AS PER THE PAGE NU MBER 93 OF THE SUBMISSIONS. THE TOTAL OF SUCH DEPOSITS MADE AFTER DUE DATE COMES TO RS 4,16,161/- WHEREAS THE RETURN OF INCOME WAS E -FILED ON 16.10.2013. . RESPECTFULLY FOLLOWING THE DECISION O F THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LTD. (2010) 321 ITR 508, THE AO IS DIRECTED TO DELETE THE ADDITION OF RS 1,37,69 0/- (RS 553851 - RS 416161). THE REMAINING ADDITION OF RS 416161/- I S UPHELD AND THE APPELLANT GETS A RELIEF OF RS 1,37,690/-. 7. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE HAS CON TESTED THAT ALL THE PAYMENTS TOWARDS ESI/PF CONTRIBUTION OF THE EMPLOYEES WERE MADE BEFORE THE DUE DATE OF THE FILING OF THE RETURN OF INCOME AND, THEREFORE, NO DISALLOWANCE IS WARRANTED IN THE CASE OF THE ASSESSEE. THUS, THE SOLE ISSUE BEFORE US IS ONLY OF VERIFICATION WHETHER ALL THE PAYMENTS OF ESI/PF CONTRIBUTION OF THE EMPLOYEES WERE MADE BEFORE THE DATE OF THE FILING OF THE RETU RN OF INCOME OR NOT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FEEL IT APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF TH E LD. CIT(A) FOR VERIFICATION OF THE CLAIM OF THE ASSESSEE AND DECID E ACCORDINGLY. IT IS NEEDLESS TO MENTION THAT BOTH THE ASSESSEE AND T HE ASSESSING OFFICER SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF B EING HEARD. THE 5 ITA NO.5915/DEL./2019. GROUNDS OF THE APPEAL OF THE ASSESSEE ARE ACCORDING LY ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER, 2020. SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 RD DECEMBER, 2020. RK/- (D.T.D.S.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI