PRIME SERVICES,DELHI vs. DCIT CIRCLE 43(1), DELHI, DELHI

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ITA 5221/DEL/2026Status: DisposedITAT Delhi18 September 2026AY 2019-206 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that disallowances made under Section 143(1)(a) for employees' PF/ESI contributions paid before the due date were unsustainable. This was based on previous coordinate bench decisions where such adjustments were considered outside the scope of summary proceedings during periods of legal debate.

What were the facts?

The assessee appealed an order confirming an addition made by the CPC under Section 143(1)(a) regarding employees' PF/ESI contributions. The issue was whether such disallowances were valid during a period of debatable legal views on timely payments.

What were the issues?

Whether the CPC can make summary adjustments under Section 143(1)(a) for disallowances on employee PF/ESI contributions when the legal allowability was debatable, and if such disallowances are sustainable in law.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘H’ NEW DELHI

Before: SH. ANUBHAV SHARMA & SH. KRINWANT SAHAY

Hearing: 10.09.2026Pronounced: 18.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘H’ NEW DELHI BEFORE SH. ANUBHAV SHARMA, JUDICIAL MEMBER AND SH. KRINWANT SAHAY, ACCOUNTANT MEMBER

I.T A. No.5221/Del/2026 (A.Y 2019-20) Prime Services DCIT Vs. Circle – 43 (1) F-30, Moti Nagar, New Delhi Delhi PAN No.AAEFP1841N

Appellant by: Sh. Nitin Gulati, Advocate Respondent by : Sh. Vipul Kashyap, Sr. DR

Date of Hearing 10.09.2026 Date of Pronouncement 18.09.2026

ORDER PER KRINWANT SAHAY AM Appeal in this case has been filed by the assessee against the order passed by the Ld. CIT(A)/NFAC for the A.Y.2019-20. Grounds of appeals are as under :- “1. CONDONATION OF DELAY That the delay in filing the present appeal is due to "sufficient cause" arising from the Appellant's lack of technical expertise in handling the e- portal and bona fide ignorance of e-proceedings. The delay 1 | P a g e

should be condoned to ensure that the cause of substantial justice is not defeated by technical constraints. 2. INVALID ADJUSTMENT, UNDER SECTION 143(1)(a) That on the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the addition made by the CPC u/s 143(1). At the time the return was processed (March 2020), the allowability of employees' PF/ESI contributions paid before the Section 139(1) deadline was a "highly debatable issue" with conflicting judicial views. Therefore, it did not constitute a "prima facie" error and fell outside the scope of summary adjustments. 3. BINDING JURISDICTIONAL PRECEDENT (A2Z INFRA) That the Ld. CIT(A) failed to apply the ratio of the Hon'ble ITAT Delhi in A2Z Infra Services Ltd. vs. DCIT (12025) 176 taxmann.com 639). The Hon'ble Tribunal has held that for years where processing occurred during a period of legal debate, disallowances made u/s 36(1)(va) via Section 143(1) are unsustainable in law. 4. ERRONEOUS APPLICATION OF LAW That the Ld. CIT(A) erred in law by falling to appreciate that the CPC cannot exercise powers of a regular assessment to decide complex or debatable legal issues in a summary intimation. 5. PRAYER The Appellant prays for the deletion of the addition and for any other relief your Honors may deem fit. The Appellant craves leave to add, amend, or alter any grounds during the course of the hearing.”

2.

During proceedings before us the Ld. Counsel of the assessee has filed a written submissions which is as under :-

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3.

Per contra the Ld. DR relied on the orders of the authorities below. 4. We have considered the findings given by the authorities below and we have also considered a written submission filed by the assessee. We have also considered the arguments of both the parties and we find that the grounds raised in the appeal are squarely

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covered by the coordinate Bench of ITAT orders in the case of Bird Airport Service (supra) and Mithabhi Lamps Pvt. Ltd. (supra), the revenue could not rebut the findings given by the coordinate Benches of ITAT Bombay and the coordinate Bench of ITAT Delhi. Accordingly, keeping in view the orders given by the coordinate Benches in the case of Bird Airport Service Mumbai Pvt. Ltd. (supra) and Mithabhi Lamps Pvt. Ltd. assessee’s appeal on this issue is allowed. 5. In the result, the appeal filed by the assessee is allowed. Order pronounced in the court on 18.09.2026.

Sd/- Sd/-

SD (ANUBHAV SHARMA) (KRINWANT SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated :18/09/2026 *Neha Sr. PS* Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT (Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT NEW DELHI

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