LATE SMT. DAYAWANTI DEVI,NEW DELHI vs. DCIT, NEW DELHI

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ITA 1262/DEL/2014Status: DisposedITAT Delhi07 February 2025AY 2005-06Bench: SHRI YOGESH KUMAR U.S. (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)3 pages
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What did the Tribunal hold?

The Tribunal noted that after a recall/rectification order, the sole substantive issue pressed by the assessee was the challenge to the addition of Rs. 16,56,509/- under Section 40(a)(ia). The assessee's counsel clarified that the challenge was limited to ensuring that no double addition was made, given that the assessee had already self-added a portion of this amount in its computation. The Tribunal accepted this submission. Therefore, the Tribunal restored the matter to the assessing authority. The assessing authority was directed to frame the consequential computation after ensuring that no double disallowance or addition was made in the hands of the assessee concerning the Rs. 16,56,509/-. The Tribunal explicitly stated that the appeal was partly allowed for statistical purposes. The issues concerning the condonation of delay and the addition of Rs. 12,88,983/- were not decided as they were no longer pressed.

What were the facts?

The assessee, M/s Prime Comfort Products (P) Ltd., filed an appeal for Assessment Year 2018-19 against an order passed by the NFAC (National Faceless Appeal Centre) under Section 143(1) of the Income Tax Act, 1961. The appeal challenged adjustments made by the DCIT, CPC (Data Processing Centre), Bengaluru. The original grounds of appeal included issues related to the condonation of delay in filing an appeal, an addition of Rs. 12,88,983/- for delayed deposit of employee PF and ESIC contributions, and an addition of Rs. 16,56,509/- under Section 40(a)(ia) for the same contributions. However, during the proceedings, it was informed that a recall/rectification order had been passed, and the only substantive issue remaining was the challenge to the addition of Rs. 16,56,509/- under Section 40(a)(ia). The assessee's counsel stated that the challenge was restricted to ensuring no double addition was made, as the amount had already been self-added in the computation.

What were the issues?

1. Whether the NFAC erred in not condoning the delay in filing the appeal (Question of law and fact, relating to procedural aspects). 2. Whether the AO at CPC erred in making an addition/adjustment of Rs. 12,88,983/- for employee PF and ESIC contributions deposited beyond the due date as per the respective Acts but within the time allowed for filing the Income Tax Return (ITR) under Section 139(1), and whether such an adjustment is outside the scope of processing under Section 143(1) (Questions of law and fact, relating to Section 143(1) and Section 36(1)(va)). 3. Whether the AO at CPC erred in making an addition of Rs. 16,56,509/- under Section 40(a)(ia), when Rs. 8,28,254/- had already been self-added by the assessee, leading to a potential triple disallowance (Question of law and fact, relating to Section 40(a)(ia)). Assessee's Contentions: - The addition of Rs. 12,88,983/- for PF and ESIC contributions deposited late but within the ITR filing due date is outside the scope of adjustments under Section 143(1). - This issue is debatable and therefore outside the scope of Section 143(1) adjustments. - The addition of Rs. 16,56,509/- under Section 40(a)(ia) results in a double addition, as a portion of this amount (Rs. 8,28,254/-) was already self-added by the assessee. - The challenge to the Section 40(a)(ia) disallowance is restricted to ensuring no double addition. - Relied on PCIT vs. Pro Interactive Service India Pvt. Ltd. (DHC) and CIT vs. Aimil Ltd. (DHC) for the issue of late deposit of PF/ESIC contributions. Revenue's Contentions: - Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 139(1),Section 36(1)(va),Section 40(a)(ia)

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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI

Before: Shri Satbeer Singh Godara & Shri Manish Agarwal

For Appellant: Shri J.P. Sharma, Adv
For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 17.07.2025Pronounced: 28.7.2025

Date of Hearing: 17.07.2025 Date of Pronouncement: 28.7.2025 ORDER

PER SATBEER SINGH GODARA, JM:

1.

This assessee’s appeal for Assessment Year 2018-19, arises against the NFAC’s Delhi DIN & Order No. ITBA/NFAC/S/250/2021-22/1035808840(1) dated 22.09.2021, in proceedings u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”).

2.

Heard both the parties at length. Case file perused.

3.

The assessee has raised the following substantive grounds:- 1. That under the facts and circumstances Ld. CIT(A) erred in law as well as on merits in not condoning the delay in filing the appeal.

2 2. That under the facts and circumstances the AO at CPC erred in law and on merits in making addition / adjustment of Rs. 12,88,983/- for the PF and ESIC contribution of the employees, deposited beyond the due date as per PF and ESIC Act but within the time allowed to file the ITR u/s. 139(1), more so as law laid down in PCIT vs. Pro Interactive Service India Pvt. Ltd. dated 10.09.2018 (DHC) and CIT vs. Aimil Ltd. 321 ITR 508 (DHC) while processing the return u/s. 143(1). 2.1 That under the facts and circumstances, the disallowance u/s. 36(1) (va) of Rs. 12,88,983/- for PF and ESIC contribution of employees deposited beyond the due date as per PF and ESCI Act but within the time allowed to file the ITR is outside the scope of addition / adjustment while processing the ITR u/s. 143(1) of the Act. Apart from this, this issue, at the most, being highly debatable therefore outside the scope of adjustment u/s. 143(1).

3. That under the facts and circumstances, AO at CPC, erred in law as well as on merits in making addition of Rs. 16,56,509 u/s. 40(a)(ia) (8,28,254 + 8,28,254), more so, Rs. 8,28,254/- already stands self-added in computation, hence, by making again addition of Rs. 16,56,509/-, the disallowance u/s. 40(a)(ia) for the same amount stands made 03 times, one time by the assessee suo moto and two times by CPC u/s. 143(1).

4.

Both the learned representatives fairly inform that after the tribunal’s recall/ rectification order in the assessee’s misc. application MA No. 57/Del/2022, the sole substantive issue which survives before us pressed before us is only the above extracted 3rd ground challenging the lower authorities’ action invoking section 40(a)(ia) disallowance/addition of Rs. 16,56,509/- in question.

5.

Faced with this situation, ld. counsel submits that the assessee hereby restricts its challenge to the above section 40(a)(ia) disallowance/addition to the extent that there is no double addition made in it’s hands, once it had already added it

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