MOHAMMED DARUS SALAM,NEW DELHI vs. ITO, WARD-36(4), DELHI

BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER Year : 2019-20] Mohammed Darus Salam, vs ITO, 15/5A, Old Chandrawal, Civil Lines, Ward-36(4), New Delhi-110054. Delhi PAN-AFGPD5866E APPELLANT RESPONDENT Appellant by Shri Manu K.Giri, Advocate & Ms. Sonia Dudeja, Advocate Respondent by Shri Anil Kumar Sharma, Sr.DR Date of Hearing 17.02.2022 Date of Pronouncement 22.03.2022 ORDER

PER KUL BHARAT, JM :

1. “That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in sustaining the Intimation dated May 01,2020 issued under section 143(1) of the Act by the Learned Assistant Director of Income Tax, Centralized Processing Centre, Bengaluru ('Ld. Assessing Officer').

2. That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) has failed to appreciate that the adjustments made by the Ld. Assessing Officer are beyond the scope of Section 143(1) of the Act and by virtue of the same, the Ld. Assessing Officer has exceeded his jurisdiction which makes the impugned order liable to be quashed on this count itself.

3. That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the action of the Ld. Assessing Officer in disallowing the deduction of Rs. 12,09,210/- claimed by the Appellant under section 36(1)(va) of the Act on account of delayed payment of employee's contribution by the Appellant towards Provident Fund. 3.1 That on the facts of the case and in law, the Hon'ble CIT(A) has failed to appreciate that the employee's contribution towards Provident Fund is allowable as deduction if the same is paid on or before the due date of filing of return of income for the relevant previous year. 3.2 That on the facts of the case and in law, the Hon'ble CIT(A) has erred in relying upon the amendments made in Section 36(1)(va) of the Act vide the Finance Act, 2021 despite the same being applicable prospectively with effect from April 1, 2021.

The Appellant craves leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. Any consequential relief, to which the Appellant may be entitled under the law in pursuance of the aforesaid grounds of appeal, or otherwise, thus may be granted.”

4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who confirmed the addition.

“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.”

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.