In this case, Chintoo Creations, Delhi, filed an appeal against the order of the Circle-50(1), New Delhi, for the assessment year 2018-19. The appeal was filed on 29th November 2021, and the final tribunal order was pronounced on 22nd March 2022.
The primary issues in this appeal were:
Chintoo Creations argued that the disallowance under Section 36(1)(va) was incorrect because the payments were made before the due date of filing the return under Section 139(1) of the Income Tax Act. They relied on decisions from the jurisdictional Delhi High Court supporting their claim. The Revenue, represented by the Dy. Commissioner of Income Tax, CPC, Bangalore, contended that the additions were justified as the payments were made after the specified date prescribed under the relevant laws governing ESI and EPF.
The Tribunal, comprising Shri Challa Nagendra Prasad, Judicial Member, and Shri Anadee Nath Misshra, Accountant Member, considered the facts and arguments presented by both sides. They noted the following key points:
Based on these observations, the Tribunal concluded that the disallowance of Rs. 21,63,304 was not justified and directed the Assessing Officer to delete this addition.
Regarding the additional ground of appeal concerning the disallowance of Rs. 1,27,329 under Section 40(a)(ii), the appellant withdrew this ground during the hearing. Consequently, this issue was dismissed.
The appeal was partly allowed, with the Tribunal directing the deletion of the addition of Rs. 21,63,304 under Section 36(1)(va). The Tribunal did not express an opinion on the retrospective or prospective nature of the amendments brought by the Finance Act, 2021, as the issue was deemed academic for this appeal.
The detailed order, signed on 22nd March 2022, reflects the Tribunal’s decision and reasoning, providing a comprehensive overview of the case and its outcome.
This case highlights the significance of adhering to statutory due dates and the implications of legislative amendments on ongoing and past assessments. It underscores the importance of understanding the scope and limitations of adjustments under Section 143(1) of the Income Tax Act.
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