VIKAS JOSHI,DELHI vs. ITO WARD 5(2)(5) , NOIDA

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ITA 2241/DEL/2023Status: DisposedITAT Delhi28 May 2025AY 2021-224 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal for statistical purposes. The primary reason for this decision was the admission of additional evidence filed by the assessee, which pertained to the extended deposit dates during the Covid period. The Tribunal found that in the interest of justice and fair play, and because the additional evidence was admitted, the matter should be restored to the Assessing Officer (AO) for a fresh decision. The AO is directed to decide the matter afresh after providing the assessee with an opportunity of being heard. The Tribunal did not decide the substantive issue of the disallowance on its merits but rather remanded the case for a fresh adjudication based on the newly admitted evidence. The specific finding on the disallowance itself was not made, as the case was sent back to the AO.

What were the facts?

The assessee, Vikas Joshi, filed an appeal against the order dated 19.06.2023 of the National Faceless Centre (NFAC), Delhi. This order arose from an intimation under section 143(1) of the Income Tax Act, 1961, passed by the ADIT, CPC Bangalore on 21.11.2022 for Assessment Year 2021-22. The intimation made a disallowance of Rs. 67,93,047/- under section 36(1)(va) for delayed deposit of employee contributions to PF (Rs. 63,24,102/-) and ESI (Rs. 4,68,945/-). The NFAC dismissed the assessee's appeal, relying on the Supreme Court's decision in Checkmate Services P. Ltd. The assessee then appealed to the ITAT, which dismissed the appeal. Subsequently, the assessee appealed to the High Court, which directed the ITAT to decide the appeal afresh. The ITAT heard both parties and admitted additional evidence filed by the assessee.

What were the issues?

1. Whether the disallowance of Rs. 67,93,047/- under section 36(1)(va) of the Income Tax Act, 1961, on account of alleged late deposit of employee contribution of PF and ESI, is bad in law and facts, and whether the consequential demand of tax and interest of Rs. 23,54,080/- should be deleted. Assessee's Contention: The assessee argued that the government had extended the due dates for deposit during the Covid period, and the benefit of this extended time was not granted. The assessee also filed an application to submit additional evidence. Revenue's Contention: The judgment records no specific contention from the revenue regarding the merits of the disallowance. The revenue's position was implicitly that the disallowance was correctly made as per the initial intimation and the NFAC's order.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI

Before: SH. SUDHIR KUMAR

For Appellant: Dr Kapil Goel, Advocate
Hearing: 22/05/2025Pronounced: 28/05/2025

Appellant by Dr Kapil Goel, Advocate Respondent by Sh. OM Prakash Sr. DR Date of hearing: 22/05/2025 Date of Pronouncement: 28/05/2025 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER:

This appeal is preferred by the assessee against the order dated 19.06.2023 of the National Faceless Centre (NFAC), Delhi [hereinafter referred to as “NFAC”] arising out of the order of the ADIT, CPC Bangalore dated 21.11.2022 passed under section 143(1) of the Income Tax Act, 1961 [herein after, the Act] for the assessment year 2021-22.

2.

The assessee has raised following common ground of appeal:

1.The order of learned commissioner of income tax (appeal), National Faceless Appeal Centre (Herein referred as Ld. CIT(A) confirming disallowance u/s 36(1) (va) to the extent of Rs 67, 93,047/- on account of alleged late deposit of employee contribution of PF for Rs. 63,24,102/- and ESI for Rs. 4,68,945/- made by Assistant Director of Income Tax CPC Bengaluru (herein after referred as AO) in 143 (1) intimation order and dismissing the appeal is bad in law and facts. The appellant assessee seek relief by way of deleting the disallowance and consequential relief of deletion of demand of tax and interest Rs. 23,54,080/- 2. The appellant craves leave to alter, amend or add any other ground of appeal either before or during the course of hearing.

3. The brief facts of the case are that the return of income filed by the assessee for the Assessment Year 2021-22 was processed u/s 143(1) of the Act on 21-11-2022by making disallowance of Rs. 67,93,047/-u/s 36(1)(va) of the Act for belated payment of PF/ESI expenses beyond the due date as detailed.

Amount In Rs. Disallowance of PF Rs. 63,24,102/- Disallowance Of ESI Rs. 4,68,945/- Total disallowed Rs. 67,93,047/-

4.

Aggrieved the order the assessee filed appeal before the Ld. NFAC. The Ld. NFAC found that the issue is squarely covered by the judgment of Hon’ble Supreme Court in the case of Checkmate Services P. Ltd vs. Commissioner of Income Tax -I in CA No. 2833/2016 vide order dated 12-10-2022 and dismissed the appeal.

5.

Being aggrieved the order of Ld. NFAC the assessee has preferred the appeal before the tribunal which was dismissed by order dated 30-11-2023. Against the above order, the assessee has filed appeal before the Hon’ble High Court. The Hon’ble High Court by order dated 24-10-2024 allowed the appeal and directed the ITAT to decide the appeal afresh.

6.

We have heard the both parties and perused the materials available on record.

7.

Ld. AR has filed the application to file the additional evidence in the appeal. He also submitted that the government has extended the date during the Covid period. The benefit of the extended time has not ben granted to the assessee. The application filed by the assessee to file the additional evidence is allowed. The documents filed by the assessee are to be verified by the A.O. Because the additional evidence filed by the has been admitted so in the interest of justice and fair play we restored the matter to the file before the A.O. to decide the matter as afresh after giving the opportunity of being heard to the assessee. The appeal of the assessee is allowed for statistical purpose.

8.

In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28.05.2025.

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