BIRD AIRPORT SERVICE MUMBAI PVT LTD,DELHI vs. ACIT, CIRCLE 4(2), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’, NEW DELHI Before Sh. S. Rifaur Rahman, Accountant Member & Sh. Raj Kumar Chauhan, Judicial Member ITA No. 2339/Del/2026 : Asstt. Year: 2020-21 Bird Airport Service Mumbai Pvt. Ltd. Vs ACIT, E-9, Connaught House, Connaught Circle-4(2), Place, New Delhi-110001 New Delhi (APPELLANT) (RESPONDENT) PAN No. AAGCB5959C Assessee by: Sh. Shailendra Bajaj, CA Revenue by: Sh. Tarun Sharda, Sr. DR Date of Hearing: 25.06.2026 Date of Pronouncement: 31.08.2026 ORDER Per Raj Kumar Chauhan, Judicial Member: The appeal of the assessee is directed against the order dated 06.01.2026 of ld. CIT(A)/Addl./JCIT(A), Thanepassed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) whereinthe appeal was partly allowed as employee’s contribution towards PF amounting to Rs.59,53,640/- was added by the AO on account of late deposit by following principle of Hon’ble Supreme Court case ofCheckmate Services P. Ltd. vs. CIT-I (2022) 448 ITR 518 (SC). And the ld. CIT(A)has confirmed the said addition while deleting the addition on account of leave encashment, gratuity and labour welfare fund.

2 ITA No. 2339/Del/2026 Bird Airport Service Mumbai Pvt. Ltd. 4. We have heard the ld. AR and the ld. DR. The ld. AR at the very outset submitted that by passing the impugned order the material addition on account of leave encashment, gratuity and labour welfare fund were deleted by ld. CIT(A), however, the addition made on account of employee's contribution to PF on account of having not been deposited within the time period provided by the Act though it was deported before the filing of the return, has been confirmed. It was further argued that the Ld. CIT(A) has wrongly relied the Checkmate Services P. Ltd. (supra) case because the said case was not yet pronounced by Hon’ble Apex Court and at that time such disallowance of delayed deposit of PF/ESI amount was a debatable issue due to various decision by different Hon’ble High Courts in favour of the assessee or in favour of the Revenue. The ratio of Checkmate Services P. Ltd.(supra) was not applicable to the present case because the intimation order was dated 30.03.2021u/s 143(1).He has also relied the case of Hon’ble Chattisgarh High Court in Raj Kumar Bothra vs. DCIT in ITA No. 56/2025 dated 08.05.2025 Raipur Chhattisgarh.

3 ITA No. 2339/Del/2026 Bird Airport Service Mumbai Pvt. Ltd. the assessee and the assessment order as well as the first appellate authority order were quashed.

“14. Also, I find that a similar view had been taken by the ITAT, Mumbai in the case of P.R Packaging Service Vs. ACIT (supra). In the aforesaid case, the Tribunal

4 ITA No. 2339/Del/2026 Bird Airport Service Mumbai Pvt. Ltd. after drawing support from its earlier order in the case of Kalpesh Synthetics (P) Ltd. Vs. DCIT (supra), had, further observed, that as in the subsequent judgment of the Hon’ble Supreme Court in the case of Checkmate Services (P) Ltd. Vs. CIT (supra) assessment was framed u/s.143(3) of the Act and not u/s. 143(1)(a) of the Act, therefore, the same would not assist the case of the department before them, wherein the assessee had assailed the validity of the addition of the delayed deposit of the employee’s share of contributions towards labour welfare funds, i.e. ESI & EPF that were made by the A.O u/s. 143(1)(a) of the Act. Further, I find that similar view had been taken by the ITAT, Jaipur in the case of Paris Elysees India Private Limited Vs. DCIT, ITA No.357/JPR/2022 dated 20.02.2023; and ITAT, Delhi in the case of M/s. 360 Realtors LLP Vs. ADIT, CPC in ITA No.303/Del/2022 and Garg Heart Centre & Nursing Home Private Limited, ITA No.1700/Del/2022. 15. On the basis of my aforesaid observations, I am of the considered view that as the issue involved in the present appeal is squarely covered by the order of the ITAT Mumbai in the case of Kalpesh Synthetics (P) Ltd. Vs. DCIT (supra), therefore, I respectfully follow the same and vacate the addition of Rs.19,91,318/- that was summarily made by the A.O, CPC u/s.143(1)(a) of the Act. Accordingly, I set-aside the order of the CIT(Appeals) and vacate the addition of Rs.19,91,318/- made by the A.O u/s.143(1)(a) of the Act.” 8. Shri Satpal Singh Sandhu (supra) has been relied by the Co-ordinate Bench in ParvBuildcon (supra), and the matter was decided in favour of the assessee. The Hon’ble Chhattisgarh High Court, in Raj Kumar Bothra vs. DCIT (supra), was pleased to hold in para Nos. 16 to 20extracted as under: “16. Furthermore, the submission of the Revenue that the judgment passed in Checkmate Services Pvt Ltd (supra) would have retrospective effect, as held in Ramesh Prasad Verma (supra), P.V. George (supra) and in R.R. Kishore's case (supra), is no longer a dispute and well settled as the law declared by a Court will have a retrospective effect if not otherwise stated to be so specifically. However, the retrospective effect of the decision rendered by the Supreme Court in Checkmate Services Pvt Ltd. (supra) is not an issue involved in present case, as the question involved herein was quite

5 ITA No. 2339/Del/2026 Bird Airport Service Mumbai Pvt. Ltd. different as to whether Section 143 (1) (a) of the Act of 1961 can be resorted to when there is highly debatable issue. Therefore, the case laws relied upon by the Revenue are not applicable to the facts of the present case. 17. Concludingly, we are of the considered opinion that the Assessing Officer should not have resorted to the provisions contained under Section 143(1)(a) of the Act of 1961 and instead could have resorted to the provisions under Section 143(3) of the Act of 1961, as on the date of issuance of intimation order dated 16.12.2021 by the Assessing Officer, exercising power under Section 143(1)(a) of the Act of 1961, the subject issue was highly debatable and ultimately, that issue was resolved by their Lordships in the matter of Checkmate Services Pvt Ltd (supra) on a later date. 18. As a fallout and consequence of above-stated discussion, the prima facie disallowance of impugned contribution towards ESI and EPF under Section 36(1)(va) read with Section 2(24)(x) of the Act of 1961 made by the Assessing Officer under Section 143(1)(a) by order dated 16.12.2021 is hereby set-aside. Consequently, the order dated 15.07.2024 passed by the CIT (Appeals) and the subsequent order dated 26.09.2024 passed by the ITAT are also set-aside. However, liberty is reserved in favour of the respondent/Revenue to proceed in accordance with law. 19. The substantial question of law is answered in favour of the appellant/assessee and against the respondent/Revenue. 20. In the result, the appeal is allowed to the extent indicated above leaving the parties to bear their own cost(s).” 9. On perusal of the judicial precedents referredabove, we are of the considered opinion that the facts and circumstances of the present case are squarely covered by the judicial pronouncements and therefore, the disallowance made by the AO u/s 36(1)(va) of the Act is not legally sustainable and is accordingly set aside. The impugned order dated 06.01.2026,

6 ITA No. 2339/Del/2026 Bird Airport Service Mumbai Pvt. Ltd. challenged before us, is also set aside. Accordingly, the appeal of the assessee is allowed.