Amaninder Singh Bedi, Ghaziabad V. ADCIT, CPC, Benglore

ITA 996/DEL/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7689 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 22-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 43B; 143(1)

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.996/Del/2021 [Assessment Year : 2019-20] Amaninder Singh Bedi, L.M.Agarwal & Co., KA-32, Kavi Nagar, Ghaziabad, Uttar Pradesh-201002. PAN-AGBPB9522D vs ADIT, CPC, Bengaluru. APPELLANT RESPONDENT Appellant by Shri Deepanshu Agarwal, CA Respondent by Shri Anil Kumar Sharma, Sr.DR Date of Hearing 16.02.2022 Date of Pronouncement 28.02.2022 ORDER PER KUL BHARAT, JM : This appeal filed by the assessee for the assessment year 2019-20 is directed against the order of Ld. CIT(A), National Faceless Appeal Centre (“NFAC”) dated 06.07.2021. 2. The assessee has raised following grounds of appeal:- 1. “That the learned CIT (A) NFAC wrongly reject the assessee ground no. 1 in respect of CPC Bangalore wrongly and illegally made addition of Rs. 1880312.00 towards employee contribution towards EPF/ESI of Rs. 1880312.00 which has been deposited before the due date of filling the Income Tax Return (30.09.2019) and mentioned in the revised tax audit report in view of the Page | 2 judicial pronouncements, on the finding that "the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purpose of determining the "due date" under the said cause" by virtue of newly inserted explanation 2 to clause (va) of subsection (1) of Section - 36 of the Income Tax Act and by virtue of newly inserted Explanation 5 to Section - 43B of the Income Tax Act. Both the explanations added by the Finance Act 2021. The ld ClT (A) treated the amendment as having retrospective effect while the memorandum explaining the provisions of the Finance Act 2021 has clarified that such amendment shall take effect from 01- 04-2021 and will accordingly apply to AY 2021-22 and subsequent assessment years. 2. That the appellant already duly incorporated the facts in the revised tax audit report that there was no default in the deposit of Rs. 1880312.00 U/s 36(1)(va) as employee contribution towards EPF/ESI & sum has been deposited before the due date of filling of return of income. 3. That in any case disallowance of claim of Rs. 1880312.00 U/s 36(1)(va) which is valid for AY 2019-20 and considering the fact that the amendment made by the Finance Act, 2021 being prospective & not retrospective is not justified.” 3. Facts giving rise to the present appeal are that Central Processing Centre (“CPC”), Bengaluru vide intimation u/s 143(1) of the Income Tax Act, 1961 (“the Act”) for Assessment Year 2019-20 Page | 3 made adjustment regarding delay in deposit of employees contribution to PF & ESI. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who confirmed the addition. 5. Now, the assessee is in appeal before this Tribunal. 6. Ld. Sr. DR vehemently submitted that law is clear in this respect and he relied upon the decision of Ld.CIT(A). 7. I have heard Ld. Representatives of both the parties and perused the material available on record and gone through the orders of the authority below. The issue in this appeal is related to disallowance of expenditure on account of delay in deposit of employees contribution related to EPF & ESI. The issue is squarely covered by the judgement of Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. in ITA No.983/2018 [Del.] order dated 10.09.2018 held 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 Page | 4 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(23)(x) of the Act.” Therefore, respectfully following the ratio laid down by the Hon’ble Jurisdictional High Court in the above-mentioned binding precedent, I hereby direct the Assessing Officer to delete the disallowance. Thus, grounds raised by the assessee are allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 28 th February, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER *Amit Kumar* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI