M/S. SHREE MAHALAXMI KRUPA SERVICES PVT. LTD.,MUMBAI vs. NFAC, DELHI, DELHI
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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI KULDIP SINGH & SHRI GAGAN GOYAL
IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI
BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No.1682/Mum/2022 Assessment Year: 2018-19 v. M/s.Shree Mahalaxmi- National Faceless Appellate Centre, Krupa Services Pvt. Ltd., Delhi. Shop No.12, National Plaza C.H.S.Ltd., Plot No.144, Takka Panvel, Raigarh, Mumbai-410 206.
[PAN: AAUCS 7858 K] (Appellant) (Respondent)
Appellant by : Shri Fenil Bhat, AR Respondent by : Shri Prakash D. Choughule, Sr.DR Date of Hearing : 21.07.2023 Date of Pronouncement : 27.09.2023
O R D E R PER KULDIP SINGH, JM:
The appellant, M/s.Shree Mahalaxmi Krupa Services Pvt. Ltd.
(hereinafter referred to as ‘the assessee’) by filing the present
appeal, sought to set aside the impugned order dated 03.06.2022
passed by the National Faceless Appeal Centre(NFAC)
[Commissioner of Income Tax (Appeals), Delhi] (hereinafter
referred to as CIT(A)] qua the assessment year 2018-19 on the
grounds inter alia that :-
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“1. The Commissioner (Appeals) erred in the order without considering the application of the assessee company dated 24th May, 2022 seeking adjournment and thus the order of the Commissioner (Appeals) is against the principles natural justice.
The Commissioner (Appeals) erred in confirming the addition of Rs.2,54,85,022/- u/s. 36(1)(va) r.w.s. 2(24)(x) of the I.T. Act, 1961, to the income of the assessee company being the employees' contribution to Provident Fund.
The Commissioner (Appeals) erred in not following the binding decision of the Supreme Court in the case of CIT v. Alom Extrusions Ltd. [(2009) 319 ITR 306 (SC)] and the Bombay High Court in the case of CIT v. Ghatge Patil Transports Ltd. (368 ITR 749, Bom.) wherein it was held that employees' contribution to Provident Fund deposited before the due date for filing the return of income of the assessee company cannot be disallowed and added to the income of the assessee.
The Commissioner (Appeals) erred in holding that the amendment made by the Finance Act, 2021 to section 36(1)(va) and sec. 43B of the Act are retrospective in effect and therefore, the employees' contribution to Provident Fund deposited by the assessee company after the due date prescribed under the Provident Fund Act is not allowable and it has to be added to the income of the assessee company.
The Commissioner (Appeals) failed to appreciate that the Finance Act, 2021 has made amendments to section 36(1)(va) and section 43B with effect from 1st April, 2021 and therefore, the said amendments have no application to the pending cases of the earlier years.
Commissioner (Appeals) erred in not appreciating that the Legislature has given effect to the amendments with effect from 1st April, 2021, that is, for the A.Y. 2021-22 and onwards and not to the earlier years.
The Commissioner (Appeals) erred in not following the decision of the Hon. Appellate Tribunal in the case of M/s. Valve Momentum Software Services Pvt. Ltd. v. DCIT in ITA No. 2197/Hyd/ 2017 dated 19th May, 2021.
The Commissioner (Appeals) erred in not considering the order of the Assessing Officer u/s. 154 of the Act in the case of the assessee company dated 25th August, 2021 whereby the Assessing Officer deleted the addition of Rs.1,41,69,962/- being the amount of employees' contribution to Provident Fund deposited prior to the date prescribed under the Provident Fund Act.
The order of the Commissioner (Appeals) is bad in law and without jurisdiction.
Your appellant craves leave to add to, alter, amend or delete any of the foregoing grounds of appeal.”
Briefly stated facts necessary for consideration and
adjudication of the issues at hand are : assessee being a private
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limited company filed its return of income for the year under
consideration declaring total income of Rs.92,25,110/- which was
processed under section 143(1) of the Income Tax Act, 1961 (for
short 'the Act') at the total income of Rs.3,52,30,630/- by making
disallowance of Rs.2,60,05,520/- being the delayed deposit made by
the assessee towards employees contribution of Provident Fund (PF)
under section 36(1)(va) of the Act. Thereafter, the case was
subjected to scrutiny. Declining the contention raised by the
assessee, the AO proceeded to disallow an amount of
Rs.2,54,85,022/- being the contribution on account of PF deposited
after the due date prescribed under the Act and thereby framed the
assessment u/s.143(3) of the Act.
The assessee carried the matter before the Ld. CIT(A) by way
of filing appeal who has partly allowed the same. Feeling aggrieved
with the impugned order passed by the Ld. CIT(A) the assessee has
come up before the Tribunal by way of filing present appeal.
We have heard the Ld. Authorized Representatives of the
parties to the appeal, perused the orders passed by the Ld. Lower
Revenue Authorities and documents available on record in the light
of the facts and circumstances of the case and law applicable
thereto.
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Undisputedly, the ld.CIT(A) vide impugned order by invoking
provisions contained u/s.36(1)(va) r.w.s.43B of the Act, confirmed the
addition of Rs.2,54,85,022/- made by the AO/CPC u/s.143(3) of the
Act. It is also not in dispute that by now it is settled principle of law
as per the decision rendered by the Hon’ble Supreme Court in the
case of Checkmate Services P. Ltd. v. CIT, order dated 12.10.2022, that
employees contribution to PF deposited by the employer beyond the due
date prescribed under the Act is not eligible for deduction.
In the back drop of the aforesaid undisputed fact, when we examine
the statement of contribution received from employees and its payments
made in the government Treasury, it is prima facie proved on record that
out of amount of Rs.2,54,85,022/- disallowed by the ld.CIT(A), an
amount of Rs.1,41,69,962/- has been deposited by the assessee
being employees contribution on account of PF well within the period
prescribed under the respective Act.
At the same time, it is also prima facie proved that out of
amount of Rs.2,54,85,022/-, an amount of Rs.72,80,400/- was
deposited by the assessee beyond the due date prescribed under
the relevant Act, but well before the date of filing of Income Tax
Returns. So, as per law, an amount of Rs.72,80,400/- is liable to be
disallowed u/s.36(1)(va) of the Act. Similarly, out of amount of
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Rs.2,54,85,022/-, an amount of Rs.40,34,660/- as per revised Form
No.3CD belongs to employer’s contribution which is not to be
disallowed.
In view of what has been discussed above, we are of the
considered view that to examine and verify the factual position, the
issue is required to be remanded back to the AO to decide afresh
after due verification that out of total disallowance of
Rs.2,54,85,022/-, made by the ld.CIT(A) only an amount of
Rs.72,80,400/- is to be disallowed and remaining amount is to be
allowed in the light of the findings returned hereinbefore by
providing an opportunity of being heard to the assessee.
Resultantly, the appeal filed by the assessee is allowed for statistical
purposes.
Order pronounced on the 27th day of September, 2023, in Mumbai.
Sd/- Sd/- (GAGAN GOYAL) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 27th September, 2023. TLN, Sr.PS (on Tour)
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Copy to:
The Appellant 2. The Respondent 3. The CIT 4. The DR, ITAT, Mumbai 5. Guard File
// True Copy //
By Order
Dy./Asst. Registrar, ITAT, Mumbai
