SCINDIA INVESTMENTS PVT. LTD,MUMBAI vs. CIT (A)NFAC, DELHI

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ITA 2071/MUM/2021Status: DisposedITAT Mumbai04 May 2022AY 2017-185 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance was beyond the scope of adjustment under Section 143(1)(a) as the payment was made before the due date of filing the return of income, following the jurisdictional High Court's precedent. The amendment by Finance Act 2021 was held to be prospective.

What were the facts?

The assessee claimed deduction for employees' contribution to Provident Fund. The Assessing Officer made a disallowance of Rs. 1,78,169/- under Section 36(1)(va) of the Act for delayed payment. The CIT(A) confirmed this adjustment.

What were the issues?

Whether delayed employees' contribution to Provident Fund is disallowable under Section 36(1)(va) when paid before the return filing due date. Applicability of the Finance Act 2021 amendment.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B,Section 143(1)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY

For Respondent: Shri Hoshang B. Irani (DR)
Pronounced: 04.05.2022

आदेश / O R D E R PER SHRI OM PRAKASH KANT, AM:

1.

This appeal has been preferred by the assessee against the order dated 19.09.2021 of Learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFSC), Delhi (in short ‘Ld. CIT(A)) for the A.Y 2017-18. The assessee has raised the following grounds of appeal. 1 :

0. Re.: Adjustment of Rs. 1,78,169/- in respect of ITA 2071/Mum/2021 Scindia Investments Pvt Ltd, Mumbai . - 2 - employees' contribution to 'Provident Fund': 1 : 1 The Commissioner of Income-tax (Appeals) has erred in confirming the adjustment made by the Assessing Officer! CPC Bangalore to the returned income of the Appellant in respect of the employees' contribution to Provident Fund of Rs. 1,78,169/- u/s. 36(1)(va) of the Act. 1 : 2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the adjustment made by the Commissioner of Income-tax (Appeals) is misconceived, incorrect, erroneous and not in accordance with the law. 1 : 3 The Appellant submits that the Commissioner of Income-tax (Appeals) be directed to delete the disallowance so made and to re-compute its total income accordingly. 2: 0 Re.: General: 2 : 1 The Appellant craves leave to add, alter, amend, substitute and/or otherwise modify in any manner whatsoever the foregoing ground of appeal at or before the hearing of the appeal.

2. The briefly stated the facts are that the assessee has filed the return of income for the year under consideration on 24.05.2018 declaring total income of Rs. 2,88,25,689/- under the normal provisions and Rs. 4,39,58,786/- under book profits u/s 115JB of the Income Tax Act, 1961 (in short ‘the Act’) and has claimed refund of Rs. 24,19,110/-. The return of income was processed u/s 143(1) of the Act, wherein, the disallowance for employees’ contribution to ITA 2071/Mum/2021 Scindia Investments Pvt Ltd, Mumbai . - 3 - Provident Fund (PF) of Rs. 1,78,169/- has been made u/s 36(1)(va) of the Act.

3.

We have heard the rival submissions and perused the material available on record. It is the contention of the revenue that employees’ contribution has been paid after the due date for payment of EPF and ESIC prescribed in relevant Acts, therefore, the same is disallowable in terms of Sec. 36(1)(va) of the Act. Whereas, the Ld. Counsel of the assessee before us submitted that the Hon’ble Bombay High Court decision in the case of CIT Vs. Ghatga Patil Transport Ltd in Income Tax Appeal No. 1002 & 1034 of 2012 order dated 14.10.2014 has held that both the employer and employee’s contribution to PF and ESIC paid before the due date of the filing of the return of income are allowable as deduction. The Hon’ble Tribunal in following decisions has also upheld the same view:

1. 1. M/s BI Worldwide India Pvt Ltd. Vs. DCIT in dated 04.01.2022.

2. Shri Satish Kumar Sinha Vs. ITO in ITA No.293/Hyd/2021,A.Y 2019-20 order dated 23.08.2021 3.3 Further, the amendment Sec. 36(1)(va) of the Act as well as to Sec. 43B of the Act introduced by way of Finance Act 20211 has been made effective from 01.04.2021. The Hon’ble Tribunal in various decisions has held that his

ITA 2071/Mum/2021 Scindia Investments Pvt Ltd, Mumbai . - 4 - amendment has prospective in nature. In view of the binding precedent of Hon’ble Jurisdictional High Court, the disallowance was beyond scope of adjustment u/s 143(1)(a) of the Act, therefore the order of the Ld. CIT(A) is set aside and addition made by the A.O is deleted. Accordingly, the grounds of appeal of the assessee are allowed.

4. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court 04.05.2022 Sd/- Sd/- (OM PRAKASH KANT) (RAHUL CHAUDHARY) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 04.05.2022 KRK, PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / The CIT(A) 4. आयकर आयु�त(अपील) / Concerned CIT �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, Mumbai / DR, ITAT, Mumbai 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//

उप/सहायक पंजीकार ( Asst. Registrar)

ITA 2071/Mum/2021 Scindia Investments Pvt Ltd, Mumbai . - 5 - आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Mumbai

Initial Date 1. Draft dictated on 04.05.2022 PS 2. Draft placed before author 05.05.2022 PS 3. Draft proposed & placed PS before the second member 4. Draft discussed/approved by PS Second Member. 5. Approved Draft comes to the PS Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed

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