Income Tax Appellate Tribunal Case Analysis: Ritu Mukherji vs ACIT for AY 2018-19

Ritu Mukherji vs ACIT, Circle-5(3)(1), G B Nagar for AY 2018-19

Case Number: ITA 1666/DEL/2022

Appellant: Ritu Mukherji, Noida

Respondent: ACIT, Circle-5(3)(1), G B Nagar

Assessment Year: 2018-19

Result: Partly Allowed

Introduction

The case between Ritu Mukherji and the Assistant Commissioner of Income Tax (ACIT) pertained to disputes over tax assessments for the financial year 2017-18, corresponding to the assessment year 2018-19. The case was scrutinized in the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘G’, with Judicial Member Shri Kul Bharat and Accountant Member Shri Anadee Nath Misshra presiding.

Background

Ritu Mukherji, the appellant, disputed the income tax assessment made by the ACIT, Circle-5(3)(1), G B Nagar, resulting in the filing of case ITA 1666/DEL/2022. The primary issue revolved around the disallowance of Rs.27,79,194/- attributed to the late deposit of employees’ contribution towards Provident Fund and Employees’ State Insurance Fund.

Arguments and Proceedings

The appellant, represented by Shri Aman Garg, Advocate, contested the adjustments made under section 143(1) of the Income Tax Act. The respondent, represented by Shri H.K. Choudhary, Commissioner of Income Tax (Departmental Representative), defended the adjustments citing the retrospective application of amendments to sections 36(1)(va) and 43B of the Income Tax Act brought in by Finance Act, 2021.

The Tribunal’s Decision

The ITAT, after thorough examination, concluded that the amendments brought in by the Finance Act, 2021, are prospective, not retrospective. Thus, any adjustments made by the Revenue under section 143(1) on the basis of these amendments for AY 2018-19 were deemed beyond the scope of the section. The Tribunal directed the Assessing Officer to delete the additions made by way of adjustments/intimation under section 143(1).

Conclusion

This landmark decision sheds light on the applicability of amendments to the Income Tax Act, emphasizing the need for careful consideration of the nature and timing of such amendments. It reiterates the principle that adjustments under section 143(1) for debatable issues, especially those involving retrospective application of amendments, are beyond the prescribed scope. This case signifies a crucial precedent for similar disputes pertaining to the contributions towards Provident Fund and Employees’ State Insurance Fund.

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Income Tax Appellate Tribunal Case Analysis: Ritu Mukherji vs ACIT for AY 2018-19