M/S. BAKSHI SECURITY & PERSONNEL SERVICES P LTD,MUMBAI V. ITO, WARD 12(1)(1), MUMBAI

ITA 4266/MUM/2024

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The case involves M/s. Bakshi Security & Personnel Services Pvt. Ltd., the appellant, contesting an order from the CIT(A) which confirmed the disallowance of Rs. 8,79,69,138 on account of late payment of Provident Fund and ESIC contributions. The appellant argued that the CIT(A) erred in applying the Supreme Court's judgment in Checkmate Services P. Ltd. without considering the specific facts and legal provisions relevant at the time of the order under section 143(1) of the Income Tax Act. The Tribunal found merit in re-evaluating the delay in the deposit of the employer's contributions but upheld the decision regarding the employees' contributions based on the Supreme Court's precedent.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469893 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 03-12-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 23-08-2024
• Other Referred Cases: Checkmate Services (P) Ltd. Vs. CIT [448 ITR 518 (SC)], M/s. Alom Extrusions Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MONIKA H. PANDE; DR
• Assessee Lawyers: HARESH P. SHAH; AR
• Keywords: Opportunity of being heard
• Section: 143(1); 43B

Judgement Text

"| आयकर अपीलीय अिधकरण \fा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 4266/Mum/2024 Assessment Year: 2019-20 M/s. Bakshi Security & Personnel Services Pvt. Ltd. Unit No. 234/235 New Sonal Link Industrial Estate Building 02, Link Road Malad (E) Mumbai – 400064 [PAN: AAACB3456A] Vs Income Tax Officer, Ward-12(1)(3), Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Haresh P. Shah, A/R Revenue by : Ms. Monika H. Pande, Sr. D/R सुनवाई की तारीख/Date of Hearing : 03/12/2024 घोषणा की तारीख /Date of Pronouncement: 05/12/2024 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order of the ld. CIT(A)/Addl/JCIT(A)-1, Guwahati [hereinafter ‘the ld. CIT(A)’] dated 27/06/2024, pertaining to AY 2019-20. 2. The grievance of the assessee reads as under:- “(1) On the facts and circumstances & in law, the learned CIT(A), NFAC, Delhi erred in dismissing the appeal disregarding the bonafide and genuine submissions with regard to applicability of the provisions of section 143(1)(a)(ii) & claim of Employees' PF & ESIC Contribution payment under the provisions of section 43B of the Act. (2) On the facts and circumstances and in law, the learned CIT(A) failed to appreciate that – (i) the provision of section 143(1)(a)(ii) was not applicable to the debatable issues as such, and therefore, the alleged claim was allowable under the provisions of section 43B of the Act; and (ii) in view of the judgment of the Hon'ble Supreme Court in case of M/s. Alom Extrusions Ltd., prevalent at that point of time. I.T.A. No. 4266/Mum/2024 2 (3) On the facts and circumstances and in law, it is humbly prayed that the alleged disallowance may be deleted & oblige. (4) Your Appellant craves leave to add, amend, alter and/or delete any of the above grounds of appeal.” 3. Vide letter dated 09/11/2024, the assessee has revised its grounds of appeal as under:- “(1) On the facts and circumstances and in law, the leamed Addl/JCIT (A)-1 Guwahati [referred as CIT(A)] erred in confirming the addition/disallowance of RS. 8,79,69,138/- [being the total amount paid plus amount due on account of Employees' Contribution of Rs.4,29,39,816/- & Employer's Contribution of Rs.4,50,29,322/- pertaining to the whole year] merely relying upon the Hon ble Supreme Court judgment in case of M/s. Checkmate Services (P) Ltd. Vs. CIT 9[448 ITR 518 (SC)] and without any reference to the relevant facts, prevalent provisions of law and the relevant judicial pronouncement prevalent at the time of passing order u/s. 143(1) of the Act. (2) Without prejudice to the above the learned CIT(A) erred in confirming the addition/disallowance of Rs. 8,79,69,138/- on account of the alleged late payment of the Employees' and Employer's Contribution to Provident Fund & ESIC under the provisions of section 36(1)(va) of the Act without realizing that the Explanation - 1 & 2 under the said section were not part of the statute at the time of passing the impugned order u/s. 143(1) for the year as it was inserted by the Finance Act, 2021, specifically mentioning that it would apply w.e.f. 1-4-2021. (3) On the facts and circumstances and in law, without prejudice to the main contention, it appears that the learned CIT(A), without application of mind, erred in disallowing the total amount for the year as above including entire Employer's Contribution for the year of Rs.4,50,29,322/- under the provisions of section 36(1)(va) read with the Explanation 1 & 2 thereunder as the Appellant did not find any reference and/or any discussion on the said provisions alongwith other relevant the provisions of section 43B of the Act. (4) Thus, without prejudice to the main contention the learned CIT(A) erred in confirming addition/disallowance of the amount of Rs.4,50,29,322/- pertaining to the Employer's Contribution towards PF & ESIC merely relying the above mentioned Supreme Court judgment which was dealing with the provisions of section 36(1)(va) relating to the payment of Employees' Contribution of PF & ESCI & it was not relating to the payment of Employer's contribution which under the law was allowable u/s. 43B of the Act. (5) On the facts and circumstances and in law the learned CIT(A), before confirming alleged addition/disallowance, ought to have dealt with the relevant provisions of the Act. I.T.A. No. 4266/Mum/2024 3 (6) On the facts and circumstances the alleged addition/disallowance of Rs.8,79,69,138/- may be deleted & oblige. (7) The Appellant craves leave to add, amend, alter and/or delete any of the above grounds of appeal.” 4. Before us, the ld. Counsel for the assessee also chose to file written submissions. 5. We have carefully considered the orders of the authorities below and also the written submissions made by the assessee. 6. After giving due consideration, we find that the quarrel in respect of delay in deposit of employees’ contribution toward provident fund, has been settled by the Hon’ble Supreme Court in its decision in the case of Checkmate Services P. Ltd. & Ors. vs. CIT & Ors. (2022) 448 ITR 518 (SC). Therefore, without going into the issues raised by the ld. Counsel for the assessee, we have no hesitation to say that they are now irrelevant qua the decision of the Hon’ble Supreme Court. 7. Insofar as, the delay in deposit of employer’s contribution is concerned, we are of the considered view that it needs to be re-verified at the assessment stage. Therefore, in the interest of justice and fairplay, we restore this limited issue of considering the delay in deposit of employer’s contribution, in light of the provisions of Section 43B of the Act. The AO is directed to verify the same in light of the relevant provisions of the Act and decide the issue afresh after affording a reasonable and adequate opportunity of being heard to the assessee. I.T.A. No. 4266/Mum/2024 4 8. With the above directions, the appeal of the assessee is allowed in part for statistical purposes, only for the limited purpose of verification, as mentioned hereinabove. 9. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the Court on 5th December, 2024 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 05/12/2024 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0014ितिलिप अ\u0019ेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001b / The Appellant 2. \u0014\u001cथ\u001b / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0014ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "