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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
1 ITA No. 938/Del/2021
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
ITA No.938/Del/2021 [Assessment Year : 2019-20] Laurels (India) Impex (P) Ltd. vs ADIT RRA Taxindia D-28, South Extension, Bengaluru, Part-1, New Delhi Karnataka AAACS9311B APPELLANT RESPONDENT Appellant by Shri Shrey Jain, Adv Respondent by Shri Om Prakash, Sr. DR Date of Hearing 08.12.2021 Date of Pronouncement 08.12.2021
ORDER PER KUL BHARAT, JM :
This appeal by the assessee is directed against the order of the
Ld. CIT(A)- Delhi, National Faceless Appeal Centre (NFAC)
dated19th May, 2021, pertaining to Assessment Year 2019-20.
The assessee has raised following grounds of appeal:-
“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. ADIT/CPC in making aggregate addition of Rs. 11,42,844/- on account of employee’s contribution to PF and ESI and that too by recording incorrect facts and findings and without observing the principles of natural justice and without appreciating the facts and circumstances of the case.
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That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. ADIT/CPC in making aggregate addition of Rs. 11,42,844/- on account of employee’s contribution to PF and ESI, is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual ground.
That having regard to the facts and circumstances of the case, Ld. CIT(A) ought to have quashed the order u/s 143(1) passed by Ld. ADIT/CPC as the jurisdiction was not validly assumed as per law.
That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. ADIT/CPC in making adjustment of Rs. 11,42,844/- u/s 143(1) which could not have been made in law.
No one appeared on behalf of the assessee an application
seeking adjournment has been filed. It is seen from the record that
the assessee has challenged addition of Rs. 11,42,844/- made on
account of late deposit Employees Contribution to PF & ESI as per
respective Acts. Since the issue in question is covered by the
Judgment of the Hon’ble Delhi High Court in favour of the assessee
in the case of PCIT vs Pro Interactive Service (India) Pvt. Ltd. in ITA
No.983/2018 [Del.] order dated 10.09.2018 , the appeal was taken
up for hearing in the absence of the assessee.
3 ITA No. 938/Del/2021
Facts of the case are that while processing the return of
income. The Assessing Officer disallowed claim of Rs. 11,42,843/-
on account of delay in deposit of Employees Contribution of PF &
ESI as per the respective Acts.
Aggrieved against this, the assessee preferred appeal before
the Ld.CIT(A) who after considering the material placed before him
dismissed the appeal and sustained the addition.
Aggrieved against this, the assessee is in appeal before this
Tribunal.
Ld. DR supported the orders of the authorities below and
relied on the judgment of the Hon’ble Delhi High Court in the case
of CIT vs. Bharat Hotels Ltd. (2019) 410 ITR 417 (Hon'ble High
Court).
I have heard the Ld. DR and perused the material available on
records. From the record, it is seen that before Ld.CIT (A), it was
contended by the assessee that the Assessing Officer erred in
disallowing Rs. 11,42,843/- on account of late deposition of
Employees Contribution of Provident Fund and ESI which as per
4 ITA No. 938/Del/2021
the judicial pronouncement rendered in the case of CIT Vs. A & Z
Information Technology Pvt. Ltd. 318 ITR 123 (Karnataka), CIT Vs.
Metropolio Fabrics Ltd. 350 ITR 327 (HP) and the judgment from
Hon’ble Delhi High Court in the case of CIT Vs. AIMIL Ltd.229 CTR
448 are allowable to buttress the contention that the such
contribution is allowable if the same is paid before the due date of
filing of the return.
I find that under the identical facts the Hon’ble Delhi High
Court in the case of PCIT vs Pro Interactive Service (India) Pvt. Ltd.
in ITA No.983/2018 [Del.] vide order dated 10.09.2018 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 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 binding precedents I
hereby direct the Assessing Officer to delete the disallowance.
5 ITA No. 938/Del/2021
The appeal of the assessee is allowed.
Above decision was pronounced on conclusion of Virtual
Hearing in the presence of both the parties on 08th December, 2021
Sd/-
(KUL BHARAT) JUDICIAL MEMBER Dated : 08/12/2021
*R. N* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR ITAT, NEW DELHI
6 ITA No. 938/Del/2021