Income Tax Appellate Tribunal - Delhi
Kapoor Industries Ltd., New Delhi vs Dcit, Cpc, Bengaluru on 17 May, 2022
IN THE INCOME TAX APPELLATE TRIBUNAL,
DELHI BENCH 'G', NEW DELHI
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND
SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
Sr. ITA No(s) Asst. Appeal(s) by Assessee By Revenue By
Nos Year(s) Appellant vs. Respondent
Appellant Respondent
1. 1079/Del/2021 2018-19 Dayal Industries DCIT, Shri Sanjeev Shri Sanjay
Pvt.Ltd., C/o-Sanjiv CPC, Sapra, CA Kumar Nargas,
Sapra & Associates Bangalore Sr. DR
LLP Chartered
Accountants, C-763,
New Friends Colony,
New Delhi - 110025
PAN : AABCD2004M
2. 1071/Del/2021 2018-19 Hari Om Anand & Son, ACIT, Shri --do--
H-256, Shastri Nagar, Circle-I, S.K.Kalra,
Meerut, Uttar Pradesh- Meerut Adv.
-250004.
PAN-AACHH6068K
3. 978/Del/2021 2019-20 Guljeet Singh Saroya, Jurisdictional Shri Hemant --do--
B 8/504, 5th Floor, The Assessing Jain,
Heartsong, Sector-108, Officer, Adovcate
Gurugaon, Haryana- Gurgaon
122006
PAN-ADIPS9101M
4. 977/Del/2021 2018-19 --do-- --do-- --do-- --do--
5. 975/Del/2021 2019-20 Shivalic Power Control N Sairaj, None --do--
Pvt.Ltd., 3E-35, Asst.DIT,
1st Floor, Faridabad- CPC,
121001. Bengaluru
PAN-AAICS4340J
6. 936/Del/2021 2019-20 Kapoor Industries Ltd., DCIT, CPC, Shri --do--
29A-2/1, Desu Road, Bengaluru R.K.Mehra,
Mehrauli, CA
New Delhi-110030
PAN : AAECK6613N
7. 934/Del/2021 2018-19 Pasupati Spinning & DCIT, CPC Shri Vipin --do--
Weaving Mills Ltd., Bengaluru Jain, CA
127-128, Tribhuvan
Complex, Mathura
Road, Ishwar Nagar,
New Delhi- 110065.
PAN-AAACP0164H
8. 933/Del/2021 2017-18 --do-- --do-- --do-- --do--
9. 1215/Del/2021 2019-20 Sanjay Kumar Sahay, DCIT, CPC -None- --do--
B-13, Oakwood Estate Bengalore
DLF City, Gurgaon,
Haryana-122001.
PAN : AARPS9847A
10. 1214/Del/2021 2019-20 Advance Ventilation DCIT, CPC --None-- --do--
(P.) Ltd., Bengalore
610, PP Tower, Netaji
2
Subhash Place,
Pitampura, New Delhi-
110034.
PAN : AAACA2149R
11. 1212/Del/2021 2018-19 Idigital Electronics ITO, Shri Vikas --do--
Pvt.Ltd., 307, Lajpat Ward-12(1), Katyal, CA
Rai market, Chandni New Delhi
Chowk, Delhi-110006.
PAN : AADCI5664G
12. 1153/Del/2021 2018-19 Jyoti Apparels, ITD, CPC Shri Rajan --do--
D-42, Okhla Industrial Bengaluru Malik, CA
Area, Phase-I,
New Delhi-110020.
PAN : AAAFJ2588E
13. 1148/Del/2021 2018-19 Inder Pratap Singh ACIT, CPC, Shri Baldev --do--
HUF, Bengalore Raj, CA
13/14, Windsor
Mansion, Janpath,
New Delhi-110001.
PAN : AAAHI1320K
14. 1142/Del/2021 2018-19 Ramesh Verma Prop of ITD, CPC Shri Nitin --do--
Diamond Exports, Bengaluru Kanwar, CA &
M/s. Diamond Export, Sh. Rajeev
Near Bharat Gas Kumar, Adv.
Godwin, Babail Road,
Panipat, Haryana-
132013.
PAN : AAGPV8626H
15. 1141/Del/2021 2019-20 Magic Wires Pvt.Ltd., DCIT, Circle- Shri --do--
M-7, Street No.1, Near 16(1), D.K.Panday,
Inderlok Metro Delhi CA
Station, Shashtri
Nagar, New Delhi-
110052.
PAN : AAECM9074F
16. 1081/Del/2021 2018-19 Jain Industrial DCIT, Shri Lalit --do--
Products, CPC, Mohan, CA
47, 48, 69, 70, IDC, Bengalore
Hissar Road, Rohtak,
Haryana-124001.
PAN : AAAFJ5741R
17. 1220/Del/2021 2017-18 Vipul Medcorp Asst.DIT, Shri Sidharth --do--
Insurance TPA CPC, Arora, CA
Pvt.Ltd., 219, Ansal New Delhi
Chamber-II, 6 Bhikaji
Kama Place, New
Delhi-110066.
PAN : AABCV8688F
18. 1221/Del/2021 2019-20 --do-- --do-- --do-- --do--
19. 1230/Del/2021 2019-20 Asian Wire Forming & ACIT, Shri Alok Kr. --do--
Springs, Plot No.30/4, Circle-1, Gupta, CA
Adjacent Whirlpool Faridabad
India Pvt.Ltd., Wearwel
Cycle Compound, NIT,
Faridabad-121001.
PAN : AAECA3646F
20. 1606/Del/2021 2019-20 Green World DCIT (OSD), Shri Alok --do--
Publications (India) Ward-10. Khare, CA
3
Pvt.Ltd., Flat No.13, Delhi
First Floor, ANsari
Market in front of Ram
Mandir, Daryaganj,
Delhi-110002.
PAN-AABCG4606N
21. 1690/Del/2021 2017-18 Shiv Pratap Singh Assessing Shri Hemant --do--
Kunwar, Officer, Jain, Adv.
508, Begum Bagh, Ward-1(2)(3),
Chakbandi Road, Aayakar
Karoli Ki Kothi, Bhawan,
Meerut, Uttar Pradesh- Chainsali
250001. Ground,
PAN : AFMPK3273Q Meerut.
22. 1591/Del/2021 2019-20 Dinesh Sharma, ADIT, CPC, Shri Charitra --do--
House No.1865, Bangaluru Gupta, CA
Sector-9, Faridabad,
Haryana-121006.
PAN-AWTPS2592L
23. 1431/Del/2021 2019-20 Varahamurti Flexirub DCIT, Shri Pragun --do--
Industries Pvt.Ltd., CPC, Jindal, Adv.
6715/10, 1st Floor, Bengaluru
Pyare Lal Road, Gali
No.1, Dev Nagar,
New Delhi-110005.
PAN : AABCV7214K
24. 1429/Del/2021 2018-19 --do-- --do-- --do-- --do--
25. 1430/Del/2021 2018-19 Nipun Gupta, DCIT, --do-- --do--
6715/10, 1st Floor, CPC,
Pyare Lal Road, Gali Bengaluru
No.1, Dev Nagar,
New Delhi-110005.
PAN : AIQPG4975N
26. 1359/Del/2021 2019-20 Park Medi World Asst. DIT, None --do--
Pvt.Ltd., 12, Meera CPC,
Enclave Near Bangaluru
Keshopur Bus Depot,
Outer Ring Road, New
Delhi-110018.
PAN-AAFCP8305H
27. 1358/Del/2021 2019-20 Park Medicenters & ADIT, CPC, None --do--
Institutions Pvt.Ltd., Bangalore
12, Meera Enclave
Near Keshopur Bus
Depot, Outer Ring
Road, New Delhi-
110018.
PAN : AAFCP4102Q
28. 1244/Del/2021 2017-18 Kay Jay Frogings CPC, Shri Rahul --do--
Pvt.Ltd.,E-2, Ludhiana Bangalore Chourasia,
(East), Ludhiana, Adv
Punjab-141010.
PAN : AAACK0878P
29. 1241/Del/2021 2019-20 Mehra Metal DCIT, --do-- --do--
Components Pvt.Ltd., CPC,
A-84, DDA Flats, Bangalore
Okhla Phase-II, New
Delhi-110020
4
PAN : AAACM8494M
30. 1240/Del/2021 2018-19 --do-- --do-- --do-- --do--
31. 1239/Del/2022 2018-19 Siora Surgicals --do-- --do-- --do--
Pvt.Ltd., WZ-1,
Rampura, Phool Bagh,
Delhi-110035.
PAN : AAACS0806R
32. 1238/Del/2021 2019-20 Yeekay Engineers Pvt. --do-- -None- --do--
Ltd. (now
Amalgamated with
Mehra Metals
Components Pvt.Ltd.),
Plot No.56, Sector-59
(HUDA), Ballabhgarh,
Faridabad, Haryana-
121004.
PAN-AAACY7183R
33. 1233/Del/2021 2018-19 Chatru Mal Garg, ACIT, Shri Alok --do--
Plot No.98, Sector-25, Circle-1, Gupta, CA
Faridabad, Haryana- Faridabad.
121005.
PAN-ABZPG7929C
34. 1231/Del/2021 2019-20 Rishi Bansal, ACIT, Shri Alok Kr. --do--
H.No. C-484, Chawla Cirlce-2(1), Gupta, CA
Colony, Ballabgarh, Faridabad.
Haryana-121004.
PAN-ADOPB8679F
35. 1719/Del/2021 2018-19 Kamal Sharma, ITO, Shri Aayush --do--
T-6/5, DLF Phase-3, Ward-29(1), Kumar, CA
Gurgaon, Haryana- New Delhi
122001.
PAN-AAUPS4917L
36. 1705/Del/2021 2018-19 International Design & CIT, Shri Anil --do--
Engineering Solutions Circle-12(2), Khanna, CA
Pvt.Ltd., D-6, Delhi
Pamposh Enclave,
Greater Kailash-I, New
Delhi-110048.
PAN-AABCI6309Q
37. 1693/Del/2021 2018-19 Kamlesh Kumar ACIT, Shri Mukul --do--
Singh, Circle, Gupta, Adv.
H.No.112, Near SHiv Panipat.
Deep School, Refinery
Township Road, VPO,
Dadlana, Panipal,
Haryana-132140.
PAN-AADCK5251H
38. 1691/Del/2021 2019-20 Anemo Prime (P) Ltd., ADIT, CPC, Shri Rajeev --do--
Plot No.470, Place Bangaluru Kr. Jain, CA
City-II, Sector-37,
Gurugram, Haryana-
122001.
PAN-AAQCA5476R
39. 2010/Del/2021 2019-20 Cosmo Ferrites Asst.DIT, Shri Anuj --do--
Limited, CPC, Kumar, CA
517, 5th Floor, Jasola, Bangalore
Zakir Nagar SO, Delhi-
110025.
5
PAN-AAACC0003E
40. 1941/Del/2021 2019-20 Sheryl Strategic ITO, None --do--
Solutions Pvt.Ltd., Gaautam
418, Manhattan 09 Budh Nagar
Tower Mahagun
Moderne, Sector-78,
Gautam Budh Nagar,
Noida, Uttar Pradesh-
201301.
PAN-AAXCS5193A
41. 1827/Del/2021 2019-20 K K Global Exports, CIT(A), None --do--
H-9, Ground Floor, NFAC, Delhi
Lajpat Nagar-I,
New Delhi-110024.
PAN-AAOFK5323N
42. 1757/Del/2021 2018-19 BTW India Pvt.Ltd., DCIT, CPC, Shri Bishnu --do--
A-14, Lawrence Road, New Delhi Bhagwan
Food Zone, New Delhi- Gupta, Adv.
110035.
PAN-AADCB2202R
43. 1751/Del/2021 2018-19 Supreme Housing AO/CIT(A), Shri Pankaj --do--
Finance Ltd., NFAC Dixit, CA
3rd Floor, RD
Chambers, 16/11,
Arya Samaj Road,
Karol Bagh, New
Delhi-110088.
PAN-AAVCS0096E
44. 1750/Del/2021 2019-20 Agnity ITO, Shri Salil --do--
Communications Ward-2(1), Kapoor, Adv.
Pvt.Ltd., C 42, Sector- New Delhi & Shri Sumil
58, Noida, Uttar Lalchandani,
Pradesh-201301. Adv.
PAN-AANCA4385N
45. 1720/Del/2021 2019-20 Kamal Sharma, ITO, Shri Aayush --do--
T-6/5, DLF Phase-3, Ward-29(1), Kumar, CA
Gurgaon, Haryana- New Delhi
122001.
PAN-AAUPS4917L
Date of hearing: 17.05.2022
Date of Pronouncement: 17.05.2022
ORDER
PER BENCH :
The present appeals are filed by the above mentioned assessees feeling aggrieved by the orders passed by appellate authority for various assessment years mentioned hereinabove.6
2. Since the issue in all the appeals is common and is related to disallowance of employee's contribution of PF/ESI on account of delay in deposits as per the respective Acts. Therefore, we clubbed all of them together for the sake of brevity and convenience and disposing the same by way of this consolidated order. However, we are taking ITA No.1079/Del/2021 [Assessment Year -2018-19] as a lead case wherein the assessee has raised the following grounds:
1. "That the Ld. CIT(A) vide his order u/s 250 of the Income Tax Act, 1961 ("Act") dated 28/08/2021 erred on facts and in law in confirming the adjustment/disallowance made in intimation u/s 143(1) dated 16/10/2019 passed by CPC Bangalore of Rs.12,52,401 u/s 36(1)(va) of the Act on account of alleged delayed payment of ESI and EPF.
2. That disallowance of such nature of Rs.12,52,401 could not have been confirmed by Ld. CIT(A) keeping in view the limited powers as available for making adjustment u/s 143(1) of the Act.
3. That on the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in confirming such adjustment/disallowance of Rs.12,52,401/-in view of the favourable and binding judgments of jurisdictional and other High Courts.7
4. That issues which are debatable in nature cannot be subjected to adjustment/disallowance u/s 143(1) of the Act and from this angle also, the Ld. CIT(A) ought not to have confirmed the adjustment/disallowance of Rs.12,52,401/-.
5. That having regard to the facts and the circumstances of the case, the Ld. CIT(A) ought to have quashed the intimation order passed u/s 143(1) by CPC, Bangalore as the jurisdiction was not validly assumed as per law.
6. That without prejudice to Ground Nos. 1 to 5 above, such disallowance of Rs.12,52,401/-as made is very excessive.
7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred on facts and in law in confirming the action of CPC in charging interest u/s 234A at Rs.2,827 and u/s 234C at Rs.9,189. At any rate, without prejudice, such interest as charged is very excessive.
8. That the Appellant reserves its right to add, amend/modify the grounds of appeal."
3. Similar grounds with different amounts and assessment years have been raised in other appeals but however, the sum & substance and the issues involved in all the appeals are identical.
4. Before us, at the outset, Learned AR submitted that the sole grievance of the assessee is confirming the additions on account of 8 delay in deposit of employee's contribution towards provident fund and ESI fund.
5. Before us, Learned AR submitted that additions have been made in the intimation issued by CPC, Bangalore u/s 36(1)(va) of the Income Tax Act, 1961 ("the Act") for the reason that the contribution received towards PF/ESIC by the assessee from its employees was not deposited before the due date. He submitted that though there has been delay in deposit of PF/ESIC Contributions but all the contributions received by the assessee from its employees, have been deposited with the appropriate authorities before the filing of return of income by the assessee. He therefore, submitted that since the amounts have been deposited before the filing of return of income, no disallowance is called for and for aforesaid proposition, he relied on the decision of Azamgarh Steel & Power vs. CPC in ITA No.1626/Del/2020 dated 31.05.2021 and CIT vs. AIMIL Ltd. [2010] 188 Taxman 265 (Delhi) and various other decisions.
6. Learned Sr. DR on the other hand supported the order of lower authorities and also placed reliance on the decision of Delhi Tribunal in the case of Vedvan Consultants Pvt. Ltd. vs DCIT in 9 ITA No.1312/Del/2020 order dated 26.08.2021. He also submitted that the amendment brought out by Finance Act 2021 would be applicable to the present case as by the amendment, it has been clarified that provisions of Section 43B of the Act shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of his employees to which the provisions of sub clause (x) of Clause (24) of Section 2 applies.
7. We have heard the rival submissions and perused the material available on record. The issue is no more res-integra. The issue has already been settled in favour of the assessee by various judicial pronouncements by the Tribunal. The Hon'ble Jurisdictional High Court of Delhi in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. in ITA No.983/2018 [Del.] order dated 10.09.2018 held as under:-
"In view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income Tax versus AIMIL Limited, (2010) 321 ITR 508 (Del.) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal.
The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and 10 objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x) of the Act."
8. As far as reliance by Ld. Sr. DR on the amendment brought out by Finance Act, 2021 is concerned, "notes on clauses" to the Finance Bill 2021 clearly states that the amendment will take effect from 01st April 2021 and will prospectively apply in relation to the assessment year 2021-22 and subsequent assessment year. In such a situation, we are of the view that the amendment brought out by Finance Act, 2021 does not apply to the assessment year under consideration.
9. Before us, the Revenue has not placed any material on record to demonstrate that the aforesaid order cited hereinabove has been overruled/stayed/set aside by higher judicial forum. In view of the aforesaid facts, we are of the view that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, albeit before filing the return of income. Admittedly, in all the above-stated matters, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income.
11
10. We have proceeded to conclude the issue of allowability of expenses attributable to employee provident fund and employee state insurance scheme on the assurance that the employee's contributions towards PF & ESI have been deposited before the due date of filing of return of income. However, the Revenue shall be at liberty to seek restoration of the appeal where it is found as a matter of fact that the assessee has failed to deposit the employee's contribution before the due date of filing of return of income stipulated u/s 139(1) of the Act in accordance with law. In view of the above and respectfully following the decision of the Hon'ble Jurisdictional High Court of Delhi cited hereinabove, we allow the appeals filed by the captioned assessees.
11. Apropos to ITA No.1233/Del/2021 concerning Assessment Year 2018-19 in the case of Chatru Mal Garg appearing at Serial No.33 captioned above, it was pointed out that the AO has attempted to make adjustment in respect of disallowance of expenditure towards belated payment of employee's contribution towards PF & ESI in the proceedings initiated u/s 154 of the Act. We express our agreement with the plea delved on behalf of the assessee that such disallowance being highly debatable in nature in the light of the decision of Hon'ble High Court, is not susceptible 12 to rectification u/s 154 of the Act at the threshold. Thus, the additions on accounts of belated employee's contribution is neither permissible under the normal provisions nor under section 154 of the Act insofar as this appeal is concerned.
12. In the result, all captioned appeals of the respective assessees are allowed.
Order pronounced in the open court on 17.05.2022.
Sd/- Sd/-
(PRADIP KUMAR KEDIA) (KUL BHARAT)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date:-17.05.2022
*Amit Kumar*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI