LION SERVICES LTD.,DELHI vs. ADDL JCIT , LUDHIYANA
Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: SH.PRADIP KUMAR KEDIA & SH. SUDHIR KUMARAssessment Year: 2019-20
PER SUDHIR KUMAR, JM:
This appeal by the assessee is directed against the order of the Commissioner of Income Tax, Appeal ADDL/JCIT(A)-2,
Ludhiana[hereinafter referred to as “CIT(A)”] vide order dated
28.03.2024 pertaining to A.Y. 2019-20 pertaining to arises out
2
of the assessment order dated11.05.2020 of the Income – tax
Act, 1961 [hereinafter referred as ‘the Act’].
The assessee has raised following grounds of appeal :
“1. For the Financial Year 2018 - 19, relevant to the Assessment Year 2019 -
2020 the appellant has filed Return of income by declaring total income of Rs
23,83,25,4371- on 30t10t2019. 2. The CPC passed an order under section 143(1) dt11.05.2020by adding the following in the income of the appellant.
Sr.
No.
Particulars
Amount
1
Arbitrary ad-hoc addition on account of payment of employee contribution of ESI and PF after the due date of relevant Acts
1,54,21,853/-
TOTAL
1,54,21,853/-
The appellant has filed an appeal before the CIT(A) on 13.01.2023 against order u/s. 143 (1) as mentioned above. 4. ln an impetuous manner, CIT(A), without objectively examining facts of the case, dismissed the appeal. 5. CIT (A) has finally dismissed the appeal filed passed by CPC and total income assessed present appeal.”
The brief facts of the case are that the assessee has filed the return of income by declaring total income of Rs.23,83,25,437/- on 30.10.2019. The communication of proposed adjustment under section 143 (1)(a) of the IT Act was 3 issued by CPC Bangalore. After submitting a response by assessee, the CPC added the amount of Rs.1,54,21,853/- to income of the assessee on account of “Payment of ESI and PF after the due date of relevant Acts and passed an order under section 143 (1) on 11.05.2020. 4. The Ld. CIT(A) dismissed the appeal of the assessee by observing as under: “The Hon'ble Supreme Court has held that there is no infirmity in the judgment of Hon'ble Gujarat High Court in M/s Checkmate Facility and the decisions of other Hon'ble High Courts, holding to the contrary, do not lay down the correct law. It has become the law of the land. The Appellant is entitled to deduction u/s 36(1) (va) only if the amount so received from employees for PF/ESIC is credited in specified account within the due date as per the relevant statute.
Moreover, the appellant has submitted in appeal proceedings that an amount of Rs 1,54,21,853/- received as contribution to PF and to ESIC have been delayed payments.
Keeping in view the amendments made by the Finance Act, 2021 in section 36 and section 43B of the Act and that these amendments are clarificatory in nature, and the judgement of the Hon'ble
Supreme Court in case of Checkmate Services Pvt. Ltd Vs.
Commissioner of Income Tax -1 in Civil Appeal No 2833 of 2016, addition made by the AO on account of delayed payment of employee's contribution of PF/ESI is confirmed.
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In view of the above facts and respectfully following the judgment of Hon'ble Supreme Court dated 12.10.2022 as outlined above, the addition of Rs 1,54,21,853/- made by AO u/s 36(1)(va) of the Act for Employees Contribution of PF and ESI on the ground that the same were not paid on or before the due date as per relevant statute is upheld and confirmed. Thus, all the grounds of appeal are hereby dismissed.
In result, the appeal is dismissed.”
Aggrieved, by the order of the CIT(A) the assessee is in appeal before us.
The Ld. AR for the assessee submitted that the CIT(A) has not mentioned any date of issue of notice to the assessee. The AR has stated that without issuing the notice the appeal was decided by learned CIT(A). The Ld. AR has also submitted that one opportunity may be given to the assessee to represent his case. He also submitted that the contribution of ESI/ PF was deposited before the due date. This fact may be verifying by the Assessing officer.
We have heard the rival contentions and perused the material available on record. We find force in the contention of the Ld. AR. In the interest of justice and fair play we deem it fit to send the matter back to the Assessing Officer to decide the 5 same in accordance with law after providing an opportunity of being heard to the assessee. The assessee is also directed to co- operate in the assessment proceedings.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 13.01.2025. (PRADIP KUMAR KEDIA)
JUDICIAL MEMBER
*NEHA, Sr. PS*
Date:-.01.2025