NITREX CHEMICALS INDIA LTD.,NEW DELHI vs. NEAC, NEW DELHI

ORDER

PER ANIL CHATURVEDI, AM:

2 3. Assessee is a firm and filed its return of income for A.Y. 2019-20 declaring total income of Rs.10,75,91,380/-. In the intimation issued u/s 143(1) of the Act by CPC, Bangalore dated 28.02.2020, the total income was determined at Rs.5,63,557/-. Aggrieved by the intimation issued u/s 143(1) of the Act, assessee carried the matter before CIT(A) who vide order dated 17.05.2021 in Appeal No.CIT(A) dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal and has raised the following grounds:

1. “That the Ld CIT(A) has erred in law and facts by confirming the addition of Rs.5,63,557/- of payment of Employees Contribution of Provident Fund and therefore the Learned AO/CPC be directed to delete the addition while computing the total income.”

4. On the date of hearing none appeared on behalf of the assessee nor any adjournment application was filed despite the fact that the notice of hearing was issued to the assessee. Since the issue raised in appeal is a covered issue, we proceed to dispose of the appeal ex parte qua the assessee, after considering the submissions of Learned DR and the material on record.

5. The intimation issued u/s 143(1) reveals that additions has been made in the intimation issued by CPC, Bangalore u/s 36(1)(va) of the Act for the reason that the contribution received towards PF/ESIC by the assessee from its employees was not deposited before the due date. Before CIT(A), it was inter alia submitted that though there has been delay in deposit of 3 PF/ESIC Contributions but all the contributions received by the assessee from its employees have been deposited with the appropriate authorities before the filing of return of income by the assessee. Before CIT(A), it was further submitted that since the amounts have been deposited before the filing of return of income, no disallowance is called for and for aforesaid proposition, various decisions of Delhi High Court were relied upon. CIT(A) did not agree with the contentions of assessee. He upheld the order of AO. Aggrieved by the order of CIT(A), assessee is now in appeal.

4 Jurisdictional High Court of Delhi in the case of PCIT vs. Pro Interactive Service (India) Pvt. Ltd. dated 10.09.2018 has already taken a view in favour of the assessee by holding as under: “In view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income Tax versus AIMIL Limited, (2010) 321 ITR 508 (Del.) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal. The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee’s Provident Fund (EPD) and Employee’s State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x) of the Act.”

5 judicial forum. In view of the aforesaid facts, we are of the view that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, albeit before filing the return of income. Admittedly in the matter, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income. In view of the above, respectfully following the decision of the Hon’ble High Court cited hereinabove, we allow the ground raised by the assessee and direct the AO to delete the addition.