Shree Durga Spining Mills, Panipat V. ITO, Panipat

ITA 701/DEL/2022

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 0424 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 17-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI C.M. GARG, JUDICIAL MEMBER ITA No.701/Del/2022 Assessment Year: 2019-20 Shree Durga Spinning Mills, Kacha Phatak of Kabri Industrial Area, Panipat, Haryana. PAN: AAMFS6298L Vs. ITO, Panipat. (Appellant) (Respondent) Assessee by : None Revenue by : Shri Om Prakash, Sr. DR Date of Hearing : 07.06.2022 Date of Pronouncement : 05.07.2022 ORDER This appeal filed by the assessee is directed against the order dated 01.04.2022 of the CIT(A), NFAC, Delhi, relating to Assessment Year 2019-20. The grounds of appeal taken by the assessee read as under:- “1. That the payment made late but before filing the Return are allowable as has been held by ITAT Jaipur Bench A in the case of Dr. B. Lal Clinical Laboratory Pvt. Ltd. Vs ACIT Jaipur ITA No. 313/JP/2021 dated 20.01.2022 following the judgement of H'ble Supreme Court in the case of Allied Motors (P) Ltd. 2 That the H’ble Supreme Court has held that the rule of law cannot be construed as retrospective - Asstt. Excise Commissioner, Kotayam Vs Esthappan Cherriyan LL 2021 SC 419.” ITA No.701/Del/2022 2 2. When the case was called for hearing, neither the assessee nor his representative appeared nor any adjournment application has been filed. However, on perusal of the entire appeal record and grounds of appeal, the ld. Sr. DR submitted that in view of consistent view taken by the ITAT, the sole issue in this appeal can be adjudicated in absence of the assessee. 3. From the grounds raised before the ld.CIT(A) as well as before this Bench, it is clearly discernible that the assessee is challenging the disallowance made by the AO u/s 36(1)(va) of the Income-tax Act, 1961 (for short, ‘the Act’) amounting to Rs.1,30,713/- on account of ESI and EPF payments. From the grounds, it is discernible that the assessee-appellant by placing reliance on the order of the ITAT, Jaipur Bench in the case of Dr. B. Lal Clinical Laboratory Pvt. Ltd. vs. ACIT Jaipur (supra), wherein the ITAT Jaipur Bench has followed the judgment of the Hon’ble Supreme Court in the case of Allied Motors (P) Ltd. The appellant, in ground No.2, has also relied on the judgment of the Hon’ble Supreme Court in the case of Asstt. Excise Commissioner, Kotayam vs. Esthappan Cherriyan (supra) to submit that the rule of law cannot be construed as retrospective. 4. From the brief facts as noted by the ld.CIT(A) in para 2 of the first appellate order, I clearly observe that the return was processed u/s 143(1)(a) of the Act in which adjustments were made. While passing the order u/s 154 of the ITA No.701/Del/2022 3 Act, the AO (CPC), sustained the disallowance of Rs.1,30,713/- u/s 36(1)(va) of the Act. 5. The assessee, before the ld.CIT(A), in ground No.2, submitted that the assessee had deposited the amount late, but had deposited before filing the return of income for AY 2019-20. Therefore, in view of the judgment of the Hon’ble jurisdictional High Court of Delhi in the case of PCIT vs. Pro Interactive Services (India) Pvt. Ltd., dated 10.09.2018 in ITA No.983/2018, such amount cannot be disallowed and added back to the income of the assessee. 6. The ld. Sr. DR strongly supported the action of the AO and submitted that when the impugned amount of employees’ contribution of PF and ESI was not deposited within the stipulated time, then, the same has to be disallowed in the hands of the assessee. 7. On careful consideration of the above rival submissions and the facts discernible from the orders of the authorities below, I find that it is not in dispute that the assessee had deposited the amount of employees’ contribution to PF and ESI before the due date of filing of the return. Therefore, in this factual position, the issue is squarely covered in favour of the assessee by the judgment of the Hon’ble jurisdictional High Court of Delhi in the case of PCIT vs. Pro Interactive Services (India) Pvt. Ltd., and by the order of ITAT, Jaipur Bench in the case of ITA No.701/Del/2022 4 Dr. B. Lal Clinical Laboratory Pvt. Ltd. Vs ACIT. The order of the jurisdictional High Court read as under:- “In view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income-Tax versus Aimil Limited, (2010) 321 ITR 508 (Del) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal. The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act. Appeal is dismissed.” 8. Respectfully following the order of the coordinate Bench of ITAT Jaipur and ITAT Delhi in the case of Yogiji Techno Equipment Pvt. Ltd., New Delhi vs. DCIT CPC Bengaluru in ITA No.1609/Del/2020 for AY 2018-19, I hold that since the assessee had undisputedly deposited the amount of employees’ contribution to PF and ESI before the due date of filing the return of income, therefore, the same amount cannot be disallowed in the hands of the assessee, therefore, the AO is directed to delete the addition. 9. In the result, the appeal filed by the assessee is allowed. The decision was pronounced in the open court on 05.07.2022. Sd/- (C.M. GARG) JUDICIAL MEMBER Dated: 05 th July, 2022. ITA No.701/Del/2022 5 dk Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi