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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER Year : 2019-20] In-Style Embroideries Pvt. Ltd., vs ADIT, A-23, Phase-I, Okhla Industrial CPC, Bengaluru. Area, Delhi. PAN-AAACI5830R APPELLANT RESPONDENT Appellant by None Respondent by Shri Om Prakash, Sr.DR Date of Hearing 22.03.2022 Date of Pronouncement 24.03.2022 ORDER
PER KUL BHARAT, JM :
1. This appeal filed by the assessee for the assessment year 2019-20 is directed against the order of Ld. CIT(A), National Faceless Appeal Centre (“NFAC”) dated 24.09.2021.
The assessee has raised following grounds of appeal:-
On the facts and circumstances of the case, the order passed by the learned CIT (A) is bad, both in the eye of law and on the facts.
2. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming addition made by A.O of Rs. 2,11,578.00 without considering the fact that amount of PF & ESIC has been paid on or before the due date of income tax return filling specified under section 139(1) & as per section 43B of Income Tax Act 1961 and deduction of same is allowed.
On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming addition made by A.O of Rs. 2,11,578.00 without considering the Judgements of Honorable Supreme court and Honorable Jurisdictional High courts and various other High courts and Tribunal’s.
On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming addition of Rs. 2,11,578.00 since the issue of addition is not incorrect claim apparent from the return/record & issue is debatable.
5. The appellant craves leave to add, amend, delete or alter any of the grounds of appeal
3. Facts giving rise to the present appeal are that Central Processing Centre (“CPC”), Bengaluru vide intimation u/s 143(1) of the Income Tax Act, 1961 (“the Act”) for Assessment Year 2019-20 made adjustment regarding delay in deposit of employees contribution to PF & ESI.
4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who confirmed the addition.
Now, the assessee is in appeal before this Tribunal.
None is present on behalf of the assessee. Ld. Sr. DR vehemently submitted that law is clear in this respect and he relied upon the decision of Ld.CIT(A).
I have heard Ld. Departmental Representative and perused the material available on record and gone through the orders of the authority below. The issue in this appeal is related to disallowance of expenditure on account of delay in deposit of employees contribution related to EPF & ESI. The issue is squarely covered by the judgement of Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs Pro Interactive Service (India) Pvt. Ltd. in [Del.] order dated 10.09.2018, where it is held 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 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.”
Therefore, respectfully following the ratio laid down by the Hon’ble Jurisdictional High Court in the above-mentioned binding precedent, I hereby direct the Assessing Officer to delete the disallowance. Thus, grounds raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed.