IN-STYLE EMBROIDERIES PRIVATE LIMITED,DELHI vs. ASSISTANT DIRECTOR OF INCOME TAX,CPC, BENGALURU

PDF · subscribers
ITA 1898/DEL/2021Status: DisposedITAT Delhi24 March 2022AY 2019-204 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue of disallowance for delayed deposit of employees' PF & ESI contributions is covered by the Delhi High Court's judgment in PCIT vs Pro Interactive Service (India) Pvt. Ltd. Therefore, the disallowance was directed to be deleted.

What were the facts?

The assessee's appeal for AY 2019-20 was against the CIT(A)'s order confirming an addition of Rs. 2,11,578. This addition was made by the CPC due to delayed deposit of employees' contribution to PF & ESI.

What were the issues?

Whether delayed deposit of employees' contribution to PF and ESI leads to disallowance of the expenditure as a deduction.

Which sections of the Income-tax Act were involved?

Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI

Before: SHRI KUL BHARAT

For Respondent: Shri Om Prakash, Sr.DR
Hearing: 22.03.2022Pronounced: 24.03.2022

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.

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.

2.

The assessee has raised following grounds of appeal:-

1.

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.

3.

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.

4.

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.

5.

Now, the assessee is in appeal before this Tribunal.

6.

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).

7.

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.

8.

In the result, the appeal of the assessee is allowed.

More judgments on Section 43B

All 7,161 judgments and leading authorities on Section 43B →

Recent GST High Court judgments

Search GST case law →