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Income Tax Appellate Tribunal, [ DELHI BENCH: ‘A’ NEW DELHI ]
Before: SHRI ANIL CHATURVEDI & SHRI YOGESH KUMAR U.S.
This appeal is filed by the Revenue against the order dated 18/05/2022 of the National Faceless Appeal Centre, Delhi (hereinafter referred to (NFAC), Delhi- and the Cross Objection filed by the assessee for assessment year 2018- 19.
2. The Revenue has raised the following grounds of appeal :- 1. “The Ld. CIT(A) has erred in facts and law by deleting an addition of Rs. 1,79,16,137/- disallowed u/s 43B of the Income Tax Act, 1961 by ACIT, CPC, Bangluru.
2. The Ld. CIT(A) has erred in facts and law by deleting an addition of Rs. 1,79,16,137/- disallowed u/s 43B of the Income Tax Act, 1961 in the order passed u/s 143(1) of the Income Tax Act, 1961 on the basis of the data filed by the assessee in the Income Tax Return.
3. The Ld. CIT(A) has erred in facts and law by accepting the reasons and submissions of the assessee subsequent to the filing of return of income and after passing order u/s 143(1) which was passed on the basis of information furnished by assessee while filing the return u/s 139.
4. The Ld. CIT(A) has erred in facts and law by accepting the data, arguments and submissions of the assessee which were not part of the income tax return and in the order passed u/s 143(1) the amount of bonus has been correctly disallowed by ACIT, CPC, Bangluru.
C.O. No. 114/Del/2022 ACIT Vs. Bellsonica Auto Component
5. The Ld. CIT(A) has erred in facts and law by deleting an addition of Rs.43,26,453/- made u/s 36(l)(va) of the Income Tax Act, 1961.
6. The Ld. CIT(A) has erred in facts and law by deleting the addition made u/s 36(1)(va) by accepting an explanation u/s 43B as prospective in operation while it is actually clarifactory and this disallowance was being done since long in the same facts and circumstances u/s 36(1)(va) even before insertion of this explanation.
7. The Ld. CIT(A) has erred in facts and law by deleting the addition made u/s 36(1)(va) while provisions of Section 43B were never applicable allowing deduction u/s 36(1)(va) if not deposited “Employees Contribution” before due date as per the Employees Provident Funds and Miscellaneous Provision Act, 1952.
The grounds of CROSS Objection are as under:-
“The grounds stated hereunder are independent of, and without prejudice to one another. The Respondent submits as under:-
Ground No. 1 - No negative impact of Bonus on Computation of total Income (‘COI’)
1.1 On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi (‘Learned CIT(A)’) has rightly deleted disallowance of INR 17,916,137 made under section 43B of the Act on the basis of data filed by the respondent in the ROI.
C.O. No. 114/Del/2022 ACIT Vs. Bellsonica Auto Component 1.2 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has rightly appreciated that there is no negative impact of bonus amount on COI in view of different presentation opted by the respondent while filing ROI.
Ground No. 2 - Acceptance of data, arguments and submission of respondent 2.1 On the facts and in the circumstances of the case and inlaw, the Learned
CIT(A) has rightly accepted the reasons and submissions of the respondent subsequent to the filing of return of income and after passing order under section 143(1) which was passed on the basis of information furnished by the respondent while filing ROI under section 139 of the Act.
2.2 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has rightly accepted data, arguments and submission of the respondent which were not part of the ROI and in the order passed under section 143(1) of the Act.
Ground No. 3 - Deletion of addition made under section 36(l)(va) of the Act 3.1 On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has rightly deleted an addition of INR 4,326,453/- made u/s 36(1)(va).
3.2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has rightly appreciated that amendments made u/s 43B and 36(1)(va) is prospective in operation and the year under consideration is before insertion of these amendments and hence,
C.O. No. 114/Del/2022 ACIT Vs. Bellsonica Auto Component said amendments are not applicable in this case.
Ground No. 4 Non issuance of speaking order for Transfer Pricing Adjustment.
On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grossly erred in not passing a speaking order for the impugned international transactions pertaining to payment of royalty and fee for technical services.
Respondent submits that, relief allowed by the ld. CIT(A) is proper and in accordance with law and do not require any reversal.”
3. Brief facts of the case are that, the assessee filed return declaring total income of Rs. 38,84,07,540/-. The assessee received intimation u/s 143(1)(a) of the Act from Centralized Processing Centre, Bengaluru (‘CPC’) wherein an adjustment of Rs. 2,22,42,590/- was proposed to be made to the income of the assessee. The Ld. A.O. made addition of Rs. 1,79,16,137/- u/s 43B of the Act and further disallowed an amount of Rs.43,26,453/- being Employees Contribution u/s 36(1) (va) of the Act which was paid belatedly. Aggrieved by the above additions made by the CPC, the assessee preferred an Appeal before the CIT(A). The Ld.CIT(A) vide order dated 18/05/2022 deleted the disallowance of Rs.1,79,16,137/- made u/s 43B of the Income Tax and also deleted addition of Rs.43,26,453/- made u/s 36(1)(va) of the Act. As against the deletion of the addition by the CIT(A), the Department of the Revenue preferred the present Appeal on the grounds mentioned above.
4. The Ground No. 1 to 4 are regarding deleting the addition of Rs.1,79,16,137/- of the Act made u/s 43B of the Act.
5. The Ld. DR vehemently submitted that the CIT(A) erred in facts and law by deleting the said addition which was disallowed by the A.O. u/s 43B of C.O. No. 114/Del/2022 ACIT Vs. Bellsonica Auto Component
the Act on the basis of data filed by the assessee in the Income tax return and the CIT(A) committed an error by accepting the data and submissions of the assessee subsequent to filing of return of income and after passing an order u/s 143(1) of the Act. Further submitted that the Ld.CIT(A) has not appreciated the fact that the data, argument and submissions of the assessee which were not the part of the income tax return filed by the assessee. Thus, the amount of bonus has been correctly disallowed by the ACIT, CPC, Bangalore.
On the other hand, the Ld. Counsel for the assessee invited our attention to Page No. 82 of the paper book and submitted that the amount of Rs. 1,79,16,137/- being bonus for Assessment Year 2018-19, paid before the due date for filing of return as inadvertently reported in income tax return under ‘any amount disallowed u/s 43B in any preceding previous year but allowable during the previous year.’ The said amount being a bonus for Assessment Year 2018-19 was paid before the due date of filing the income tax return and was accordingly reported in specific Clause 26(B) (a) of the Tax Audit Report.
It is the specific case of the assessee that the said amount of Rs.1,79,16,137/- being a bonus for Assessment Year 2018-19 paid before the due date for filing the return. Considering submissions made by the AR and in the above facts and circumstances, we deem it fit to restore the matter to the file of the A.O. with a direction to the assessee to substantiate above claim and also direct the A.O. to decide the issue involved in the Ground No. 1 to 4 afresh after hearing the assessee. Accordingly, Ground No. 1 to 4 of the Revenue is allowed for statistical purpose.
The Ground No. 5 to 7 are regarding deletion of addition of Rs. 43,26,453/- made u/s 36(1)(va) of the Act which being Employees contribution which has been deposited after the due date as per the Employees Contribution fund and miscellaneous provisions Act 1952.
C.O. No. 114/Del/2022 ACIT Vs. Bellsonica Auto Component
The Ld. DR submitted that the issue of belated deposit of ESI/PF has been decided by the Hon’ble Supreme Court vide order dated 12/10/2022 in the case of Checkmate Services Pvt. Ltd. vs. CIT-1 in Civil Appeal No. 2833 of 2016, therefore, submitted that the Ground No. 5 to 7 are liable to be dismissed.
The Ld. Counsel for the AR contended that the judgment of the Apex Court is not applicable to the case of the Assessee and submitted that the order of the CIT(A) requires no interference at the hands of the Tribunal.
It is not in dispute that the assessee has deposited Employees Contribution after the due date enumerated under Employees Contribution Fund and miscellaneous provisions Act, 1952, but the same has been claimed to be deposited before the due date for filing the return. The issue regarding belated deposit of Employees Contribution is no more ‘res-Integra’ in view of the judgment of the Hon’ble Apex Court dated 12/10/2022 in the case of Checkmate Services Pvt. Ltd. vs. CIT-1 in Civil Appeal No. 2833 of 2016, wherein it is held that the employees contribution PF and ESI to the extent it is not paid within due date prescribed under the PF Act, is not allowable u/s 36(1)(va) of the Act. Therefore, we do find force in the argument of the Ld. DR.
The Ld. Counsel for the Assessee further submitted that in so far as payment made under provisions of ESI at 1948 reflected in the copy of the ‘challan for payment of ESI Contribution’ produced at page no. 211 of the Paper book, in so far as Entry No. 20-B-16 at the bottom of the page the ‘actual date of payment to the concerned authorities’ has been mentioned as ‘14/08/2018’ instead of ‘14/08/2017’ and submitted that the said amount of Rs. 1,60,325/- has been paid well within the time prescribed under the PF Act. Therefore, submitted that the same is allowable.
C.O. No. 114/Del/2022 ACIT Vs. Bellsonica Auto Component
Since the assessee has disputed the date of actual payment of Rs.1,60,325/- to the concerned authorities and claimed that the date mentioned in the challan for payment of ESI Contribution is a typographical error, we deem it fit to restore to the file of the A.O. to examine the claim of the assessee and to decide the matter afresh. Accordingly, the issue involved in Ground No. 5 to 7 only in so far as above entry of Rs. 1,60,325/- is restored to the file of the A.O. and the rest of the additions are confirmed. Thus, we partly allow the Ground No. 5 to 7 of the Revenue for statistical purpose.
In the result, the Appeal in Revenue is partly allowed for statistical purpose.
C.O No. 114/Del/2022
The Ld. Counsel for the assessee submitted that the assessee will not be pressing the C.O. No. 114/Del/2022 and prayed for dismissal of the C.O. as not pressed. Recording the submission made by the Ld. AR, the Cross Objection No. 114/Del/2022 filed by the assessee is dismissed. Order pronounced in the open court on : 31/05/2023.