AKRITI JEWELCRAFTZ (P) LTD.,DELHI vs. ACIT, CIRCLE-1(1), NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A : NEW DELHI

BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.190/Del/2023 Assessment Year: 2020-21 Akriti Jewelcraftz (P) Ltd., Vs ACIT, B-7/107A, Flat No.002, GF, Circle-1(1), Safdarjung Enclave Extension, New Delhi. New Delhi – 110 029. PAN: AAKCA8307K (Appellant) (Respondent) Assessee by : Shri Ajay Singh, CA Revenue by : Shri R.K. Meena, Sr. DR Date of Hearing : 07.12.2023 Date of Pronouncement : 14.12.2023 ORDER PER ANUBHAV SHARMA, JM: This is appeal preferred by the Assessee against the order dated 08.12.2022 of the National Faceless Appeal Centre (NFAC) (hereinafter referred to as the ld. First Appellate Authority or ‘Ld. FAA’ for short) arising out of the order dated 23.12.2021 passed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ACIT, CPC, Bengaluru (hereinafter referred to as the Ld. AO).

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“1. On the facts, in the circumstances of the case and in law, the impugned Order under section 143(1)/250 of the Act is bad in law. 2. That the Hon'ble CIT(Appeals) erred on facts and in law a) In disallowing INR 5,77,345/- u/s 36(1)(va) of the Act on account of delayed payment of Employees contribution to PF and

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ESI without appreciating the fact that the payments have been made before the due date of filing the return u/s 139(1) of the Act. b) In not appreciating the decision of Hon'ble Supreme court in case of CIT vs. Vinay Cement Ltd. [2007] (213 CTR 268) (SC) and Hon'ble High Court of Delhi in the case of CIT Vs. AIMIL Limited (321 ITR 508) wherein the similar issue of delay in deposit of employees' contribution to PF/ESI etc. has been decided in favour of the assessee. 3. The Hon'ble CIT(Appeal) erred in not appreciating the facts and law that amendments in section 36(1)(va) as well as Section 43B of the Act vide Finance Act, 2021 is applicable from 01-04-2021 onwards i.e., prospectively. 4. On the facts and circumstances of the case, Hon'ble NFAC (CIT(A)) has erred both on fact and in law in confirming the action of the learned AO(CPC) making the disallowances by exercising its powers beyond the scope of section 143(1)(a) of the Income Tax Act, 1961. 5. That the appellant craves leave to add, delete, modify, and amend any grounds of appeal before or at the time of hearing of appeal. 6. That above grounds of appeal are without prejudice to each other.”

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on the order of the Mumbai Bench in M/s P.R. Packaging Service vs. ACIT, ITA No.2376/Mum/2022 to submit that in this order the Mumbai Bench, after taking into consideration the judgement of the Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. (supra) observed that disallowance cannot be made in the processing intimation u/s 143(1)(a) of the Act. He also relied on the order of Cuttack Bench in the case of Nirakar Security & Consultancy Services (P) Ltd. in ITA No.98/CTK/2022 to submit that the matter was remanded to the file of the AO to adjudicate the grounds of the assessee relating to claim of the said employee’s contribution as business expenditure u/s 37 of the Act.

4.2 The ld. DR, however, relied on the findings of the ld. tax authorities below.

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in ITA No.2842/Mum/2022, order dated 22.02.2023 and relying another order in the case of Nissan Enterprises Ltd. vs. DCIT, ITA No.3270/Mum/2022, order dated 17.02.2023 the Co-0rdinate bench has held as under:-

“9. We find that, recently, in Nissan Enterprise Ltd. vs DCIT-CPC, in ITA No.3270/Mum/2022, the Tribunal vide order dated 17/02/2023, after considering the aforesaid decision in P.R. Packaging Service (supra) held that pursuant to the decision of the Hon’ble Supreme Court in Checkmate Services (P.) Ltd. (supra), the claim of deduction towards employee’s contribution to PF & ESI made by the taxpayer becomes an incorrect claim warranting prima facie adjustment under section 143(1) of the Act. The relevant findings in the aforesaid decision are as under:- “3.1. The ld. AR vehemently relied on the decision of the Co- ordinate Bench of this Tribunal in the case of P.R. Packaging Services in ITA No.2376/Mum/2022 dated 07/12/22 (authored by the undersigned) wherein this issue has been decided in favour of the assessee. We find that the said decision was rendered by applying the provisions of Section 143(1)(iv) of the Act. Pursuant to the aforesaid decision of the Hon’ble Supreme Court, the claim of deduction towards employee’s contribution to PF & ESI made by the assessee becomes an incorrect claim warranting prima facie adjustment u/s.143(1) of the Act. Hence, the decision relied by the ld. AR would not advance the case of the assessee. 3.2. In view of the aforesaid observations and respectfully following the decision of the Hon’ble Supreme Court referred to supra, the grounds raised by the assessee are hereby dismissed” 6. Further, the coordinate Benches of ITAT Delhi in Aroma Aromatics and Flavours vs. CIT(A) in ITA No.1646/Del/2021, order dated 30.11.2022 and in Savleen Kaur & Ors., ITA No.2249/Del/2022, order dated 09.01.2023, have held that the Hon’ble Supreme Court judgement in the case of ‘Checkmate Services Case’ is applicable also to the cases of adjustment done by the CPC u/s 143(1) of the Act. Thus, this Bench is not inclined to entertain the plea as raised by the ld. AR and there was no error in the findings of the ld.CIT(A) in 5

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following the judgement of the Hon’ble Supreme Court in the case of ‘Checkmate Services Case’. The grounds have no substance.