Super Snacks Pvt. Ltd., Delhi V. CPC ITD, Bengaluru

ITA 998/DEL/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8259 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Assessment Year: 2019-2020
• Appeal Filed On: 22-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘SMC-1’: NEW DELHI (Through Video Conferencing) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA No.998/DEL/2021 [Assessment Year: 2019-20] Super Snacks Pvt. Ltd. 13, Alipur Road, Civil Lines, Delhi-110054 CPC, Bangalore PAN-AABCS3811R Assessee Revenue Assessee by None Revenue by Sh. Om Prakash, Sr. DR Date of Hearing 17.11.2021 Date of Pronouncement 17.11.2021 ORDER This appeal filed by the assessee is directed against the order dated 30.06.2021 of the National Faceless Appeal Centre (NFAC), Delhi, relating to Assessment Year 2019-20. 2. This appeal was fixed for hearing today by issue of notice through RPAD. However, the postal authorities have returned the notice unserved with postal remark “left”. The assessee has also not taken any steps intimating the change of address if any. Therefore, I proceed to decide the appeal on the basis of material available on record and after hearing the ld. DR. 2 ITA No.998/Del/2021 3. The only issue raised by the assessee in the grounds of appeal relating to the order of the Ld. CIT(A) in confirming the action of the Assessing Officer in sustaining the addition of Rs.4,51,593/- on account of disallowance of late payment of Provident Fund/ESI u/s 36(1)(va) of the Income Tax Act, 1961 (hereinafter ‘the Act’). 4. Facts of the case, in brief, are that the assessee company e-filed the return of income for the Assessment Year 2019-20 on 27.09.2019 declaring the total loss of Rs.1,07,669/-. The said return was processed u/s 143(1) of the Act at a total income of Rs.3,43,924/- as against loss of Rs.1,07,669/- declared in the return of income by making an addition of Rs.4,51,593/- on account of disallowance of late payment of PF/ESI u/s 36(1)(va) of the Act. 5. In appeal, the ld. CIT(A) upheld the action of the Assessing Officer on the ground that although the assessee had made the payments of PF/ESI before the due date of filing of return of income, however, he has not deposited the same before the statutory due dates prescribed under PF and ESI Act. 3 ITA No.998/Del/2021 6. Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 7. I have heard the Ld. DR and perused the record. A perusal of the order of the Ld. CIT(A) shows that the amount of Rs.4,51,593/- was disallowed by the CPC in the intimation dated 06.07.2020 on account of late deposit of PF/ESI before the statutory due dates. I find the submission of the assessee that since the payments were made before the due date of filing of the return u/s 139(1) of the Act therefore, no such disallowance u/s 36(1)(va) should be made was rejected by the Ld. CIT(A). There is no dispute to the fact that the above payments have been deposited before the due date of filing of return of income u/s 139(1) of the Act. We find, the Hon’ble Delhi High Court in the case of PCIT vs. Pro Interactive Service (India) Pvt. Ltd. (supra) has held that ‘the legislative intent was / is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. The Hon’ble High Court has further held that legislative intent and objective is not to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under the Act. We find, following the 4 ITA No.998/Del/2021 above decision the coordinate Bench of the Tribunal in the case of CIT v. Dee Development Engineers Ltd. (supra) has decided the issue in favour of the assessee holding that no disallowance u/s 36(1)(v) r.w.s. Section 2(24)(x) can be made if the employees’ contribution to PF and ESI are deposited after the due date prescribed under the relevant Acts, but, paid before the due date of filing of return. Since the assessee, in the instant case has, admittedly, deposited the employees’ contribution to PF and ESI before the due date of filing of the return of income, therefore, respectfully following the decisions cited (supra), we hold that no disallowance u/s 36(1)(v) r.w.s. Section 2(24)(x) can be made in the instant case. Accordingly, the order of the CIT(A) is set aside and the grounds raised by the assessee are allowed. 8. In the result, the appeal filed by the assessee is allowed. The Order was pronounced in the open court at the time of hearing itself i.e. on 17.11.2021. Sd/- Sd/- [KUL BHARAT] [R.K.PANDA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi; Dated: 17 th November, 2021 5 ITA No.998/Del/2021 f{x~{tÜ? f{x~{tÜ?f{x~{tÜ? f{x~{tÜ? fÜA fÜA fÜA fÜA P.S P.SP.S P.S Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi