Case Number: ITA 1049/DEL/2021
Appellant: Flying Fabrication, New Delhi
Respondent: Deputy Commissioner of Income Tax, Centralized Processing Centre (CPC), Bengaluru
Assessment Year: 2018-19
Result: 2018-19
Case Filed on: 2021-09-03
Order Type: Final Tribunal Order
Date of Order: 2021-11-17
Pronounced on: 2021-11-17
The case of Flying Fabrication, New Delhi versus Deputy Commissioner of Income Tax, Centralized Processing Centre (CPC), Bengaluru revolves around the disallowance of delayed contributions to the Provident Fund (PF) and Employee State Insurance (ESI) under Section 36(1)(va) of the Income Tax Act for the assessment year 2018-19. The appellant, Flying Fabrication, challenged this disallowance, arguing that all contributions were made before the due date of filing the return of income under Section 139(1).
Flying Fabrication filed its return of income for the assessment year 2018-19 on 22.10.2018, declaring an income of Rs. 1,18,35,513/-. The Deputy Commissioner of Income Tax (CPC), Bengaluru, passed an intimation order under Section 143(1), disallowing Rs. 88,58,042/- on account of delayed deposit of employee’s contribution towards PF and ESI. The disallowance was confirmed by the National Faceless Appeal Centre (NFAC) on 12.08.2021, which led to the appeal filed by Flying Fabrication.
The grounds raised by the appellant were as follows:
1. The order passed by the CIT(A), NFAC, dated 27.07.2021 is erroneous and bad in law.
2. The CIT(A) erred in law and on facts by confirming the assessment made by DCIT, CPC, Bengaluru at Rs. 2,06,89,560/- against the returned income of Rs. 1,18,31,513/-.
3. The CIT(A) erred in confirming the disallowance under Section 36(1)(va) of Rs. 88,58,042/- for delayed deposit of employee’s contribution towards PF/ESI.
4. The CIT(A) erred in applying the amended provisions of Section 36(1)(va) and Section 43B, which were introduced by the Finance Act, 2021, retrospectively.
5. The CIT(A) failed to observe the principles of natural justice and did not appreciate the facts and circumstances of the case.
6. The CIT(A) should have quashed the intimation order under Section 143(1) as the jurisdiction was not validly assumed as per law.
7. The disallowance under Section 36(1)(va) does not constitute a prima facie adjustment under Section 143(1)(a) and was therefore made without proper jurisdiction.
8. The disallowance was confirmed without considering that the contributions were deposited on or before the due date of filing the return under Section 139(1).
9. The appellant prays for interest under Section 244A related to refunds claimed in the return of income.
10. The appellant denies liability towards interest charged under Sections 234A, 234B, and 234C and prays for appropriate relief.
The Tribunal reviewed the submissions and noted the following key points:
The Tribunal referenced several key decisions, including:
The Tribunal allowed the appeal filed by Flying Fabrication for the assessment year 2018-19, concluding that:
In conclusion, the ITAT, Delhi Bench, provided a fair judgment by allowing the appeal of Flying Fabrication. The case was remanded to the CIT(A) for a fresh order after considering the appellant’s submissions and ensuring proper procedural fairness for the assessment year 2018-19.
Pronounced in the open court on 17th November 2021.
Signed:
(Amit Shukla)
Judicial Member
Signed:
(Prashant Maharishi)
Accountant Member
Dated: 17th November 2021
Copy forwarded to:
Asstt. Registrar, ITAT, New Delhi
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