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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: SRI SANJAY GARG & DR. MANISH BORAD
order
: September 22nd, 2023 ORDER
Per Manish Borad, Accountant Member:
This appeal filed by the Revenue pertaining to the Assessment Year (in short ‘AY’) 2017-18 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi [in short ‘ld. CIT(A)’] dated 27.02.2023 arising out of the assessment I.T.A. No.: 553/KOL/2023 Assessment Year: 2017-18 M/s. DGP Steel Star Engg. Pvt. Ltd. order framed by the Assessing Officer (in short ld. ‘AO’) u/s 154 of the Act dated 14.05.2019.
At the outset, ld. Counsel for the assessee submitted that the appeal of the Revenue deserves to be dismissed on account of low tax effect in view of the CBDT Circular No. 17/2019 dated 08.08.2019 because the tax effect is less than Rs. 50 Lakh. 3. On the other hand, ld. D/R submitted that the issue raised in the instant appeal is against the deletion of disallowance for delay in depositing of employees’ contribution towards PF&ESI which was not justified in the opinion of ld. CIT(A) in view of the recent judgment of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. vs. CIT reported in [2022] 143 taxmann.com 178 (SC) wherein Hon'ble Apex Court has held in favour of the Revenue and that such depositing of employees’ contribution towards PF&ESI beyond the prescribed dated provided under the respective Act is not allowable as an expenditure u/s 36(1)(va) of the Act and it is an income u/s 2(24)(x) of the Act. 4. We have heard rival contentions and perused the records placed before us. It is an admitted fact that tax effect in the instant appeal of the Revenue is below the prescribed limit of Rs. 50 Lakh. The only issue raised in the Revenue’s appeal is regarding the delay in deposit of employees’ contribution towards PF&ESI. Before us, ld. Counsel for the assessee has referred to the decision of this Tribunal in the case of ITO vs. Shri Vishnu Khaitan in dated 25.04.2023 wherein the facts were also I.T.A. No.: 553/KOL/2023 Assessment Year: 2017-18 M/s. DGP Steel Star Engg. Pvt. Ltd. identical and the Revenue’s appeal was on the very same issue but tax effect was less than Rs. 50 Lakh.
Under these given facts this Tribunal has held as follows: “2. The solitary grievance of the Revenue is that Id. CIT(Appeals) has erred in deleting the disallowance of Rs.2,17,850/- (employees contribution to P.F.) and ESI Rs.63,681/-. This appeal was dismissed on merit by the Tribunal vide its order dated 07.06.2022. Dissatisfied with the order, Revenue filed a Miscellaneous Application bearing No. 53/KOL/2022. The stand of the Revenue was that Hon’ble Supreme Court has reversed the position of law as relied upon by the Id. CIT(Appeals), in the judgment of Checkmate Services Pvt. Limited -vs.- CIT (2022) 143 taxman.com 178 (SC). Relying upon the judgment, Tribunal has allowed the application of the Revenue and restored the appeal to its original number.
In response to the notice of hearing, no one has come present on behalf of the assessee. With the assistance of Id. D.R., we have gone through the record carefully. A perusal of the grounds of appeal
would reveal that tax effect involved in this appeal is Rs. 1,07,471/-. This appeal is not maintainable because of the Department’s Circular No. 17 of 2019 issued on 8th August 2019. According to this Circular, the CBDT has prohibited its subordinate authorities to challenge the order of Id. CIT(A) where tax effect by virtue of relief given by the CIT(A) is less than Rs.50 lakhs.
4. No doubt, Tribunal has restored this appeal for fresh adjudication, but we are of the view that at the first instance itself, this appeal should have been dismissed for want of tax effect and it should have not been restored by us on the request of the Revenue vide M.A. No. 53/KOL/2022. Even if, the decision of the Hon’ble Supreme Court has come but that aspect can only be looked into, if it is found that tax effect is more and order of the Id. CIT(A) is challengeable before the Tribunal. The ITAT has no jurisdiction to go into all these aspects once it is established that tax effect is less than Rs. 50 lakhs.”
6. After going through the above decision of this Tribunal and on finding that facts are identical, we respectfully following the same, are of the considered view that Revenue’s appeal deserves to be dismissed on account of low tax effect being less than Rs. 50