SHARAD INSULATIONS AND INTERIORS PRIVATE LIMITED,NEW DELHI V. ACIT, CIRCLE-23(1), NEW DELHI

ITA 2757/DEL/2022

AI Insights

The case involves Sharad Insulations & Interiors Private Limited appealing against the order of the CIT(Appeals)-NFAC, Delhi, which sustained an addition of Rs.18,84,771.00 related to late deposits of ESI and EPF under section 36(va) of the Income Tax Act. The assessee argued that the due date for the deposit of PF & ESI should be considered from the month in which the salary was disbursed, referencing decisions from the Kolkata Bench and other Delhi Bench decisions. The Tribunal, considering the precedents and the specific circumstances of the case, decided to restore the matter to the Assessing Officer for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312243 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2019-2020
• Other Referred Cases: Kanoi Paper & Industries Ltd. vs. ACIT, Sentinel Consultants (P) Ltd. vs. ACIT, Sai Computers Ltd. vs. ACIT, CPC, Vigilant Security Placement and Detective Services (P) Ltd. Vs. DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Assessee Lawyers: MANOJ KUMAR
• Keywords: Opportunity of being heard
• Section: 43B

Judgement Text

"I.T.A. No. 2757/Del/2022 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI M BALAGANESH, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A No.2757/Del/2022 िनधा रणवष /Assessment Year: 2019-20 Sharad Insulations & Interiors Private Limited, J-34/A, Second Floor, Lajpat Nagar, Part-2, New Delhi. बनाम Vs. ACIT, Circle-23(1), Room No.248, C.R. Building, New Delhi. PAN No. AAACS4403L अपीलाथ\u0014 Appellant \u0016\u0017यथ\u0014/Respondent िनधा\u0005\u0006रतीक ओरसे /Assessee by Shri Manoj Kumar, CA राज\u0010वक ओरसे /Revenue by Shri Ashish Tripathi, Sr. DR सुनवाईक तारीख/ Date of hearing: 25.04.2025 उ\u0016ोषणाक तारीख/Pronouncement on 28.04.2025 आदेश /O R D E R PER SHRI C.N. PRASAD, J.M. This appeal is filed by the assessee against the order of the Ld.CIT(Appeals)-NFAC, Delhi dated 11.10.2022 for the assessment year 2019-20. Assessee has raised the following grounds: - 1. “That the Ld.CIT(A), NFAC has erred in facts and in law in sustaining an addition of Rs.18,84,771.00 on illegal and untenable grounds. Hence, the addition as such may be deleted. I.T.A. No. 2757/Del/2022 2 2. The Ld. AO has erred in law and on facts in invoking the provisions of section 36(va) for making addition of late deposits of ESI and EPF as per due date under respective act which is against the spirit of law and intention of legislature. The CIT(A), NFAC has erred in confirming the same. Hence, the addition as such may be deleted. 3. The Ld. AO has erred in law and on facts for making addition of late deposits of ESI and EPF ignoring the facts that under PF act employer contribution includes employee contribution and hence the section 43B will apply and not 36(va). The CIT(A), NFAC has erred in confirming the same. Hence, the addition as such may be deleted. 4. That the Ld. AO(CPC) has erred in facts and in law in making an addition of Rs.18,84,771.00 while processing u/s 143(1) on illegal and untenable grounds. The CIT(A), NFAC has erred in confirming the same. Hence, the addition as such may be deleted. 5. That the Ld. AO(CPC) has erred in facts and in law in making an addition of Rs.18,84,771.00 while processing u/s 143(1)(iv) on illegal and untenable grounds. The CIT(A), NFAC has erred in confirming the same. Hence, the addition as such may be deleted. 6. That the CIT(A) has erred in law and on facts in sustaining the addition of Rs.18,84,771.00 ignoring the facts that condition stipulated in section 36(va) is impossible to be performed by him. Hence, the addition as such may be deleted. 7. That the appellant craves leave to add, substitute, modify or delete any ground of appeal on or before the date of hearing. All the above grounds of appeal are without prejudice to each other.” I.T.A. No. 2757/Del/2022 3 2. Ld. Counsel submits that the only issue in appeal is in respect of disallowance of employees’ contribution to PF and ESI, u/s 36(1)(va) of the Act. Ld. Counsel for the assessee submits that in so far as employees’ contribution to PF & ESI is concerned the due date for deposit of PF & ESI shall be reckoned from the month in which disbursement of salary was made. In other words, the Ld. Counsel submits that for computing the period of delay “month” to be considered is the month in which salary/wages are disbursed by the assessee. For this proposition reliance was placed on the decision of the Kolkata Bench of the Tribunal in the case of Kanoi Paper & Industries Ltd. s. ACIT (75 TTJ 448). Reliance was also placed on the following decisions and submitted that on identical facts the Delhi Bench of Tribunal restored the issue to the file of the Ld. Assessing Officer for examining the due date in the light of the above decisions: - 1. Sentinel Consultants (P) Ltd. vs. ACIT on 12 June, 2023 [2023] 153 taxmann.com 151; 2. Sai Computers Ltd. vs. ACIT, CPC on 18 October, 2023 IT Appeal Nos. 2862 to 2865 (Delhi) of 2022; 3. Vigilant Security Placement and Detective Services (P) Ltd. Vs. DCIT (ITA No.2740/2022 dated 13/06/2023). 3. Ld. DR placed reliance on the orders of the authorities below. I.T.A. No. 2757/Del/2022 4 4. Heard rival submissions and perused the decisions relied on. 5. The contention raised in this appeal is that the due date of deposit of PF & ESI contributions shall be reckoned from the month in which disbursement of salary was made. Reliance was placed on various decisions to support the above contention. We observe that identical issue came up before the coordinate bench in the case of Sentinel Consultants (P) Ltd. vs. ACIT (153 taxamnn.com 151), wherein the Tribunal restored the appeal to the file of the Assessing Officer on identical issue and to examine the contention raised by the assessee and in the light of the observations of the Kolkata Bench of the Tribunal in the case of Kanoi Paper & Industries Ltd. vs. ACIT (supra). Similar view has been taken by the coordinate benches referred to above. Thus, respectfully following the said decisions we restored this issue to the file of the Assessing Officer to decide the issue in the light of the observations made by the Tribunal in the case of Kanoi Paper & Industries Ltd. vs. ACIT (supra). Needless to say the Assessing Officer shall provide adequate opportunity of being heard to the assessee, the assessee is at liberty to provide all the necessary information in support of its contention. I.T.A. No. 2757/Del/2022 5 6. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 28/04/2025 Sd/- Sd/- (M BALAGANESH) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28/04/2025 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "