SUNEHRI BAGH BUILDERS P.LTD,DELHI V. DCIT, CIRCLE-24(2), NEW DELHI

ITA 2567/DEL/2022

AI Insights

The case involves Sunehri Bagh Builders Pvt. Ltd., the appellant, contesting an order by the Learned Commissioner of Income Tax (Appeals) - NFAC, Delhi, which arose from an intimation order by the AO under section 143(1) of the Income Tax Act, 1961, for the Assessment Year 2018-19. The dispute centered on the addition of Rs. 25,31,470 pertaining to late deposit of Employees' State Insurance (ESI) and Employees' Provident Fund (EPF) contributions, which the AO claimed were not deposited within the due dates. The appellant argued that the deposits were made before the due date for filing the Income Tax Return, referencing an amendment in section 36(1)(va) effective from A.Y. 2021-22, which they contended did not apply to their case for A.Y. 2018-19.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470283 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 02-09-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 19-10-2022
• Other Referred Cases: Intelligent Communication Systems India vs. ITO, Ward \\u2013 12(2), New Delhi, Sentinel Consultants Pvt. Ltd. vs. ACIT, Kanoi Paper and Industries Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJAN RANA
• Assessee Lawyers: MONALISHA
• Section: 143(1)

Judgement Text

"Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘G’: NEW DELHI) BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No:- 2567/Del/2022 (Assessment Year- 2018-19) Sunehri Bagh Builders Pvt. Ltd, 603 Anushka Tower, G3S Mall, Rohini, Sector -11, Delhi- 110085. Vs. DCIT, Circle 24(2), CR Building, Delhi. PAN No: AACCS0523K APPELLANT RESPONDENT Assessee by : Ms. Monalisha, Adv. Revenue by : Shri Poojan Rana, Sr. DR Date of Hearing : 02.09.2024 Date of Pronouncement : 24.10.2024 ORDER PER SUDHIR PAREEK, JM This appeal is preferred by the Assessee / Appellant against the order of the Learned Commissioner of Income Tax (Appeals)- NFAC, Delhi, [in short, referred hereinafter as “Ld. CIT(A)] dated 08.09.2022 arising from the intimation order dated 19.04.2021 ITA No.- 2567/Del/2022 Sunehri Bagh Builders Pvt. Ltd. Page 2 of 5 passed by the learned Assessing Officer (“AO”) u/s 143(1) of the Income Tax Act, 1961 (In short, referred as “the Act”), for the Assessment Year (“A.Y.”) 2018-19. 2. Heard rival submissions and carefully perused the record available before us. 3. Reiterating the grounds of appeal, the Ld. AR submitted that the Ld. CIT(A) erred in law in sustaining the order passed by the Ld. AO, in which he has made the addition of Rs. 25,31,470/- pertaining to late deposit of ESI & EPF, even when the same was deposited before the due date of filing the Income Tax Return. He further submitted that amendment in section 36(1)(va) is being effective from the A.Y. 2021-22 is thus not applicable to the present case as it is for A.Y. 2018-19. 4. The Ld. DR relied upon the order passed by both lower authorities. 5. In the course of hearing, the Ld. AR referred the order passed by the Co-ordinate Bench of this Tribunal titled Intelligent Communication Systems India vs. ITO, Ward – 12(2), New Delhi, ITA No.- 2567/Del/2022 Sunehri Bagh Builders Pvt. Ltd. Page 3 of 5 ITA No. 129/Del/2023 dated 03.08.2023, relevant para no. 6 & 7 of which, reproduced as below: “6. The Co-ordinate Bench of Tribunal in the case o Sentinel Consultants Pvt. Ltd. vs. ACIT ITA No. 7 & 8/Del/2023 order dated 12.06.2023 observed in para 9.3 of that order that month during which the disbursement of salary is actually made would be relevant for the purposes of determination of due date. The relevant operative para of the order of the Co-ordinate Bench of Tribunal is reproduced herein under for ready reference: ‘9.3 We also take note of yet another plea made out on behalf of the assessee towards methodology of calculation of default under the relevant PF /ESIC Act. The Ld. Counsel contends that the month during which the disbursement of salary in actually made could be relevant for the purposes of determination of due date of deposit under the respective statute. The accrual of liability towards payment of salary without actual disbursement would not fasten obligation for deposits of employees contribution in the labour Acts per se. As observed by the co- ordinate bench in Kanoi Paper and Industries Ltd. vs. ACIT (2002) 75 TTJ 448 (Cal). This aspect has not been found to be examined by the Assessing Officer or CIT(A). Hence without expressing any opinion on merits on this aspect, we deem it expedient to restore the matter to the file of designated AO. It shall be open to the assessee to place factual matrix before the AO and take such plea for evaluation of the AO. The AO shall examine this aspect and fresh order in accordance with law after giving proper opportunity. 7. The observations made in Sentinel consultants Pvt. Ltd. shall apply mutatis mutandis. Consequently, we consider it expedient to restore the issue back to the file of AO for factual verification and redetermination in the issue on the light of determination made by the Co-ordinate Bench in the case of Kanoi Paper and Industries Ltd. (supra). The AO shall thus recompute the amount of disallowance under section 36(1)(va) of the Act, it any, on the above basis, in accordance with law. The assessee shall be entitled to appropriate relief under section 36(1)(va) of the Act where it is found that deposits have been made towards PF /ESIC within the due date from the ITA No.- 2567/Del/2022 Sunehri Bagh Builders Pvt. Ltd. Page 4 of 5 close of month of actual disbursement of salary / wages in the light of interpretation rendered in the case of Kanoi Paper and Industries Ltd. (supra).” 6. We respectfully follow the above order of Co-ordinate Bench and finds the appeal of assessee deserve to be allowed, by remitting issue back to the file of the Ld. AO for required factual verification and redetermination in the light of observation made by the Co- ordinate Bench, as mentioned hereinbefore. 7. Consequently, this appeal is allowed as indicated above. Order pronounced in the Open Court on 24.10.2024 Sd/- Sd/- (SHAMIM YAHYA) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 24/10/2024. Pooja/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA No.- 2567/Del/2022 Sunehri Bagh Builders Pvt. Ltd. Page 5 of 5 Date of dictation Direct 23.10.24 Date on which the typed draft is placed before the dictating Member 23.10.24 Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order "