Income Tax Appellate Tribunal - Mumbai
Shree Dhootapapeshwar Ltd, Mumbai vs The Dcit 5(3) (1), Mumbai on 23 July, 2022
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "H", MUMBAI
BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND
SHRI GAGAN GOYAL, ACCOUNTANT MEMBER
ITA No. 1684/Mum/2021 (A.Y. 2018-19)
ITA No. 1685/Mum/2021 (A.Y. 2019-20)
Shree Dhootapapeshwar Limited
135, Nanubhai Desai Road,
Khetwadi, Mumbai-400004
PAN: AAACS7883E ...... Appellant
Vs.
DCIT-5(3)(1),
Room No. 573, 5th Floor,
Aayakar Bhavan, M.K. Road,
Mumbai-400020. ..... Respondent
Appellant by : Sh. Akram Khan/ Raunak Vardhan
Respondent by : Sh.Vijay Kumar Soni, Sr.DR
Date of hearing : 10/05/2022
Date of pronouncement : 23/07/2022
ORDER
PER GAGAN GOYAL, A.M:
These two appeals by assessee are directed against the common order of National Faceless Appeal Centre (NFAC), Delhi dated 27.07.2021 for the Assessment Years (AY) 2018-19 & 2019-20 respectively. The assessee in both the appeals has raised the similar grounds of appeal except variation of amounts in 2 ITA Nos. 1684 & 1685/Mum/2021 (AYs- 2018-19 & 2019-20) figures and in ITA No. 1684/Mum/2021 the assessee has raised one different ground i.e., ground no.6, which is as follows:
Sr.No. Grounds of appeal Tax effect relating
to each Ground of
Appeal (Rs.)
1 Both the lower authorities erred in 5,33,430/-
disallowing under section 36(1) (va), late (Excluding surcharge payment of employee's contribution to and cess) Provident (excluding surcharge Fund and fund set up under Employees State Insurance Act and cess) totalling to Rs 17,78,100/-.
2 Both the lower authorities erred in making a disallowance under Section 36(1) (va), on a debatable issue, in an Intimation issued under section 143(1)(a).
3 Both the lower authorities failed to consider that the payment of employees' contribution to Provident Fund was made before the due date of filing the Return of Income.
4 Both the lower authorities erred in ignoring the binding decisions of the jurisdictional Bombay High Court.
5 Having regards to the facts and circumstances of the case, the Appellant submits the disallowance of Rs 17,78,100/-be deleted The Assessing Officer erred in levying interest under section 234B of Rs. 8,10,772/-.
6 The Assessing Officer erred in levying interest 8,10,772/-
under section 234B of Rs. 8,10,772/-.
7 The Assessing Officer erred in levying interest 5,12,259/-
under section 234C of Rs. 5,12,259/-.
2. Brief facts of the case are that the assessee has filed its return of income u/s 139(1) on 30-11-2018. Declaring total income at Rs 18,25,55,510/- under the normal provisions and income of Rs 17,09,49,952/- under the provisions of section 115JB of the I.T. Act, 1961. The said return was processed u/s 143(1) of the Act at C.P.C , Bangalore in which the adjustment of Rs 17,78,100/- was made 3 ITA Nos. 1684 & 1685/Mum/2021 (AYs- 2018-19 & 2019-20) to the return on account of deemed income u/s 36(1)(va) r.w.s. 2(24)(x) of the act for late deposit of employee's contribution to P.F. and E.S.I. in accordance with timelines as specified in statutes governing P.F. and E.S.I. respectively.
3. Against this intimation dated 13-11-2019, assessee filed an appeal before the Ld.CIT(A)-10, Mumbai on 27-12-2019. The Ld.CIT(A)(NFAC) also confirmed the intimation processed u/s 143(1). Against this order of NFAC, assessee appellant instituted an appeal before Income Tax Appellant Tribunal. Raising total 7 grounds of appeal.
4. Ground nos. 1-5 , are interrelated hence disposed off simultaneously by common finding. We have gone through the intimation processed u/s 143 (1)(a) and order passed by the Ld.CIT(A) u/s 250 of the act. While deciding the issue we have gone through the paper book dated 2ND MAY 2022 filed by the assessee before the ITAT and both the lower authorities.
5. Ld.CIT(A) while deciding this issue has relied upon the reporting of the tax auditor wherein, he simply reported about the due dates of payment under the P.F., E.S.I. and other funds vis-à-vis actual date of payment as per columns 20(b) of form no 3CD. This reporting auditor had done keeping in view the due dates of respective acts and not as per Income Tax Act 1961. This tax audit report nowhere suggests and authorize the department to make a disallowance, if the payments are made within the due date for filing of return u/s 139(1) of the Income Tax Act
6. we have pursued the details filed by the appellant with reference to amount and actual date of payments under the respective due dates for various employee welfare related acts.
4 ITA Nos. 1684 & 1685/Mum/2021 (AYs- 2018-19 & 2019-20)
7. On pursual of the order of Ld.CIT(A), he himself admitted that issue is a debatable one. Its an established position of law, np debatable issue can be considered while doing adjustment u/s 143(1)(a). The Ld.CIT(A) has relied upon the decisions of following high courts /apex court as under
i) Sagun Foundry Pvt Ltd vs C.I.T (2017)78 Taxmann .com 47 (All.)
ii) C.I.T vs Gujrat State Road Transport Corporation (2014) 366 ITR 170(GUJ.) III) PC.I.T vs Sujlong Energy Ltd 115 Taxmann.com 340.
iv) C.I.T vs Merchem Ltd (2015)378 ITR 443(KER.)
v) Unifac Management Services (India) Pvt Ltd (2018) 100 Taxmann.com 244(Mad.)
8. In support of his contention's appellant placed reliance on the decisions of hon jurisdictional high court in the case of Ghatge Patil Transport (368) ITR 749 and Hindustan Organics Ltd (366) ITR 1.
9. We have considered the decisions relied upon by both the parties and facts of the case, in this regard the decision of honourable Supreme Court in the matter of C.I.T vs Raghuvir Synthetics Ltd. (394) ITR 1, is relevant. In this decision honourable apex court held that A.O. is duty bound by the decision of the jurisdictional High Court and any view contrary to the jurisdictional High court is a mistake.
10. Further both the lower authorities relied upon the amendment made by finance act, 2021 to section 36(1) (5a) and 43 (b) as per Ld.CIT(A) this amendment is curative in nature and retrospective in application.
5 ITA Nos. 1684 & 1685/Mum/2021 (AYs- 2018-19 & 2019-20)
11. On this issue jurisdictional ITAT and various coordinated benches held that the amendment made by the finance Act 2021 to sec 36(1) (5a) and section 43(b) are prospective in nature, effective from assessment year 2022-23. We respectfully follow the decision of the Hyderabad Bench of the ITAT in the case of Crescent Roadways Pvt Ltd vs DCIT (ITA no 952/Hyd./2018)
12. Following judgements of ITAT be considered while deciding the matter
i) PNGS India Pvt Ltd vs I.T.O (ITA no 1409/Mum. /2021)
ii) M/s Vishal Enterprises Vs DCIT (ITA no 510 and 511 /Bang. /2021)
13. Considering all the discussions, decisions and submission of the appellant we are of the considered view that A.O. and first appellant authority are duty bound to follow the decisions of jurisdictional high Court otherwise it makes their decision unsustainable in so far as applicability of amendment by the finance act 2021, the same is effective from assessment year 22-23 thus in the light of above, we hold that the C.P.C and Ld.CIT(A) has erred in applying amended provisions of sec 36(1) (5a) r.w.s 43(b) to disallow assesses claim od deduction.
14. We found merit in the grounds of appeal raised by the Assessee (ground no 1-5), hence the impugned order of Ld. CIT(A) is set aside and the grounds of the Assessee is allowed
15. Ground no 6 raised by the assessee is consequential in nature depending on the outcome of ground nos. 1-5 decided (supra) hence no separate adjudication is required. Hence allowed for statistical purposes.
6 ITA Nos. 1684 & 1685/Mum/2021 (AYs- 2018-19 & 2019-20)
16. Ground no 7 pertains to charging of interest u/s 234 C. We agreed with the submissions and arguments raised by the appellant. Interest u/s 234C has to be calculated based on returned income and it can't be varied consequent to any adjustment made u/s 143 (1)(a) or additions / disallowances made u/s 143 (3) of the act. In the light of above we direct the C.P.C. Bangalore to calculate interest u/s 234 C correctly keeping in view the figures of returned income.
17 In the light of above ground no 7 raised by the appellant is also allowed.
18. In the result, appeal filed by the assessee is allowed.
ITA No. 1685/Mum/2021 (A.Y. 2019-20)19. The Assessing Officer erred in short granting TDS credit amounting to Rs. 1,08,221/- (Tax effect Rs. 1,08,221/-). (Ground No.6).
20. Ground No. 1 to 5 are similar to ground no. 1 to 5 raised in ITA No. 1984/Mum/2021. Facts of both the appeals are similar, hence, findings of ITA No. 1984/Mum/2021 is applicable mutatis mutandis to this AY also. In the result, ground nos. 1 to 5 raised by assessee are allowed.
21. Appellant has filed a valid revised return on 22.03.2020 claimed TDS amounting to Rs. 7,89,029/-, this amount of Rs. 7,89,029/- is duly reflected in Form-26AS still while processing under section 143(1) of the Act TDS credit to the extent of Rs. 6,80,808/- was granted. We direct the AO to grant further TDS credit of Rs. 1,08,221/-. This ground of appeal raised by assessee is allowed.
22. Both Ground No. 7 & 8 are similar to ground no. 6 & 7 raised in ITA No. 1984/Mum/2021. Facts of both the appeals are similar, hence, findings of ITA 7 ITA Nos. 1684 & 1685/Mum/2021 (AYs- 2018-19 & 2019-20) No. 1984/Mum/2021 is applicable mutatis mutandis to this AY also. In the result, ground nos. 7 & 8 raised by assessee are allowed.
23. In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 23rd day of July, 2022.
Sd/- Sd/-
(ABY T VARKEY) (GAGAN GOYAL)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai, िदनांक/Dated: 23/07/2022
SK, Sr.PS
Copy of the Order forwarded to:
1. अपीलाथ /The Appellant ,
2. ितवादी/ The Respondent.
3. आयकर आयु (अ)/ The CIT(A)-
4. आयकर आयु CIT
5. िवभागीय ितिनिध, आय.अपी.अिध., मु बंई/DR, ITAT, Mumbai
6. गाड फाइल/Guard file.
BY ORDER, //True Copy// (Dy. /Asstt. Registrar) ITAT, Mumbai