Case Number: ITA 1045/DEL/2021
Appellant: Surender Kumar, Haryana
Respondent: ADIT, CPC, Bangalore
Assessment Year: 2018-19
Result: 2018-19
Case Filed on: 2021-09-02
Order Type: Final Tribunal Order
Date of Order: 2022-03-15
Pronounced on: 2022-03-15
The case of Surender Kumar, Haryana versus ADIT, CPC, Bangalore revolves around the disallowance under section 36(1)(va) of the Income Tax Act for the assessment year 2018-19. The appellant, Surender Kumar, challenged the addition made by the Assessing Officer (AO) and upheld by the CIT(A), regarding the disallowance of expenses incurred in relation to the delayed deposit of employee’s contributions to PF and ESI.
Surender Kumar, filed his return of income for the assessment year 2018-19. The intimation issued under section 143(1) by the Asst. DIT, CPC, Bangalore, included an addition of Rs.1,04,78,950/- on account of the delay in the deposit of employee’s contribution to PF and ESI. The appellant contended that these contributions were deposited before the due date for filing the return of income under section 139(1) of the Income Tax Act.
The grounds raised by the appellant were as follows:
1. The CIT(A)-NFAC, Delhi erred in confirming the addition of Rs.1,04,78,950/- made in the intimation issued under section 143(1) on account of the delay in the deposit of employee’s contribution to PF & ESI without appreciating that the contributions were deposited before the due date of filing the return under section 139(1).
2. The CIT(A)-NFAC, Delhi erred in confirming the addition under the head income from business in the intimation issued under section 143(1) due to the delay in the deposit of employee’s contribution to PF and ESI under the relevant Acts but deposited before the due date of filing the return under section 139(1) of the Income Tax Act.
3. The CIT(A)-NFAC, Delhi erred in discarding the binding judicial precedents of the jurisdictional Punjab & Haryana High Court in the case of CIT Vs. Mark Auto Industries Ltd. (2013) 40 taxmann.com 482 relied upon by the appellant.
4. The CIT(A)-NFAC, Delhi erred in relying on non-jurisdictional High Court orders without appreciating that these cannot supersede binding jurisdictional High Court orders.
5. The CIT(A)-NFAC, Delhi erred in applying the amendment brought by the Finance Act, 2021 in the provisions of section 36(1)(va) applicable w.e.f. 1st April 2021 relevant to F.Y. 2020-21, which does not apply retrospectively.
6. The CIT(A)-NFAC, Delhi grossly erred in confirming the disallowance under section 143(1)(a)(iv) for delayed deposits of employee’s contribution to PF and ESI without considering that no disallowance was indicated in the tax audit report.
7. Without prejudice to the grounds of appeal stated, it is submitted that the delayed deposit of employee’s contribution to PF and ESI disallowed under section 36(1)(va) should be allowed under the residuary section 37(1) of the Income Tax Act as legitimate expenditure.
The Tribunal reviewed the submissions and materials on record. It noted that the appellant had deposited the employee’s contributions before the due date for filing the return under section 139(1). The Tribunal referred to various judicial precedents supporting the allowance of such deductions if the contributions were deposited before the due date of filing the return.
The Tribunal referenced several key decisions, including:
– ITAT, Hyderabad in Crescent Roadways Pvt. Ltd. vs. DCIT
– ITAT, Delhi in DCIT vs. Dee Development Engineers Ltd.
– ITAT, Delhi in DCIT vs. Planman HR (P) Ltd.
– ITAT, Chennai in DCIT vs. Talenpro India HR Pvt. Ltd.
– ITAT, Agra in Mahadev Cold Storage vs. Jurisdictional Assessing Officer
The Tribunal allowed the appeal filed by Surender Kumar for the assessment year 2018-19. The disallowance under section 36(1)(va) was deleted, and the grounds raised by the appellant were upheld.
In conclusion, the ITAT, Delhi Bench, provided a fair judgment by allowing the appeal of Surender Kumar. The disallowance under section 36(1)(va) was deleted, ensuring adherence to the legislative intent and judicial precedents for the assessment year 2018-19.
Pronounced in the open court on 15th March 2022.
Signed:
(Saktijit Dey)
Judicial Member
Signed:
(Dr. B. R. R. Kumar)
Accountant Member
Dated: 15th March 2022
Copy forwarded to:
Asstt. Registrar, ITAT, New Delhi
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