Case Number: ITA 1785/DEL/2021
Appellant: Samadhiya Infratech Pvt. Ltd., Shakarpur
Respondent: AO Ward 24(1), ITO, New Delhi
Assessment Year: 2019-20
Case Filed On: November 29, 2021
Order Type: Final Tribunal Order
Date of Order: September 14, 2022
Pronounced On: September 14, 2022
The case was heard by the Delhi Bench “H” of the Income Tax Appellate Tribunal, which included:
The appellant, Samadhiya Infratech Pvt. Ltd., filed an appeal against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated September 27, 2021. The appeal concerned the disallowance of employees’ contribution to ESI and PF under Section 143(1) of the Income Tax Act, 1961.
Assessee By: Shri Sanjeev Saxena, C.A.
Revenue By: Ms. Rajeshwari R., JCIT – Sr. DR
The hearing took place on September 14, 2022, and the order was pronounced on the same day.
The assessee raised the following grounds of appeal:
The CPC, Bangalore disallowed the employees’ contribution to ESI and PF, and the CIT (Appeals) sustained the disallowance, referring to the amendment brought in by the Finance Act, 2021, in Sections 36(1)(va) and 43B of the Income Tax Act. The CIT (Appeals) argued that the amendments are clarificatory in nature and have retrospective applicability.
The tribunal noted that the issue is highly debatable and no disallowance towards contribution to employees’ PF and ESI is warranted while processing the return under Section 143(1) of the Act. The tribunal found that the issue is covered by the decision of the jurisdictional High Court in the case of CIT Vs. AIMIL Ltd. 321 ITR 508, and the contributions were remitted before the due date for filing of the return of income.
The tribunal held that the assessment order was legally invalid and allowed the appeal of the assessee. The disallowance of employees’ contribution to ESI and PF was deleted.
The official order was signed and dated on September 14, 2022, by the tribunal members:
Challa Nagendra Prasad
Judicial Member
Dr. B.R.R. Kumar
Accountant Member
Order Date: September 14, 2022
The order was distributed to:
The case was initially filed by Samadhiya Infratech Pvt. Ltd. challenging the disallowance of employees’ contribution to ESI and PF made during the assessment year 2019-20. The appellant sought relief from the disallowance made by the CPC and sustained by the CIT (Appeals), arguing that the contributions were legitimate and remitted before the due date for filing the return of income.
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