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TMI Blog2022 (2) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal Centre, (NFAC) Delhi as per the following details:- Sr. No. ITA No. & party A.Y. Date or order 1 108 & 109/Jodh/2021 - Akbar Mohammand, Nagaur 2018-19 & 2019-20 29.09.2021 2. Since the issue involved is common in these appeals, which were heard together, therefore, these are being disposed off by this common order for the sake of convenience and brevity. 3. The brief facts of the case are that the assessee is a labour contractor. The return of income for assessment year 2018-19 was filed declaring income of ₹ 4,54,500/-. This return of income was processed by CPC, Banglore and the income was assessed at ₹ 8,63,200/- by making an adjustment in respect of EPF/ESIC due, which were paid beyond the due date but before the filing of the return of income. The assessee filed rectification application u/s 154 of the Act against the intimation u/s 143(1) of the Act but the 154 application was rejected. Subsequently, the assessee filed an appeal before the NFAC against the rejection of the 154 application and the assessee's appeal was also rejected. Similarly, in assessment year 2019-20, the return of income was filed declaring income of ₹ 7,31,450/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is also a settled law that the assessee cannot be taxed on an amount on which tax is not legally imposable. Although, the assessee might have chosen a wrong channel for redressal of his grievance, all the same, it is incumbent upon the Tax authorities to burden the assessee only with correct amount of tax and not to unjustly benefit at the cost of tax payer. Therefore, in the interest of substantial justice, we deem it expedient to restore the issue to the file of the Assessing officer with a direction to pass appropriate orders deleting the addition / disallowance after duly considering the settled judicial position in this regard, which have been decided in the three cases as enumerated above in Para 5. For a ready reference, we also reproduce relevant observations of the various Benches as under:- 6.2 In the case of Harendra Nath Biswas vs DCIT Koltaka, ITA No. 186/Kol/2021 for the A.Y. 2019-20, similar issue has been decided vide order dated 16.7.2021 by the ITAT 'B' Bench, Kolkata. The Relevant findings have been given in para 4 of the said order, which read as under;- "4. We have heard both the parties and perused the record. First of all we do not countenance this act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities." In the light of the aforesaid discussion we do not accept the Ld. CIT(A)'s stand denying the claim of assessee since assessee delayed the employees contribtion of EPF & ESI fund and as per the binding decision of the Hon'ble High Court in Vijayshree Ltd. (supra) u/s 36(1)(va) of the Act since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds and we allow the appeal of the assessee." 6.3 Similar view has been taken by the ITAT Hyderabad 'SMC" Bench in ITA No. 644/Hyd./2020 for the AY 2019-20 in the case of Salzgitter Hydraulics Private Ltd, Hyderabad vs ITO vide order dt 15.6.2021. The relevant findings given in para 2 of the said order read as under:- "2. Coming to the sole substantive issue of ESI/PF disallowance of ₹ 1,09,343/- and ₹ 3,52,622/-, the assessee's and revenue's stand is that the same has been paid before the due date of filing sec. 139(1) return and after the due date prescribed in the corresponding statutes; respectively. I notice in this factual back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Rajasthan High Court in case of CIT vs. State Bank of Bikaner & Jaipur wherein the Hon'ble High Court after extensively examining the matter and considering the various decisions of the Hon'ble Supreme Court and various other High Courts has decided the matter in favour of the assessee. In the said decision, the Hon'ble High Court was pleased to held as under: "20. On perusal of Sec.36(1)(va) and Sec.43(B)(b) and analyzing the judgments rendered, in our view as well, it is clear that the legislature brought in the statute Section 43(B)(b) to curb the activities of such tax payers who did not discharge their statutory liability of payment of dues, as aforesaid; and rightly so as on the one hand claim was being made under Section 36 for allowing the deduction of GPF, CPF, ESI etc. as per the system followed by the assessees in claiming the deduction i.e. accrual basis and the same was being allowed, as the liability did exist but the said amount though claimed as a deduction was not being deposited even after lapse of several years. Therefore, to put a check on the said claims/deductions having been made, the said provision was brought in to curb the said activities and which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1), cannot be disallowed under Section 43B or under Section 36(1)(va) of the IT Act." 16. The said decision has subsequently been followed in CIT vs. Jaipur Vidyut Vitran Nigam Ltd. (supra), CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (supra), and CIT vs Rajasthan State Beverages Corportation Limited (supra). In all these decisions, it has been consistently held that where the PF and ESI dues are paid after the due date under the respective statues but before filing of the return of income under section 139(1), the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act. 17. We further note that though the ld. CIT(A) has not disputed the various decisions of Hon'ble Rajasthan High Court but has decided to follow the decisions rendered by the Hon'ble Delhi, Madras, Gujarat and Kerala High Courts. Given the divergent views taken by the various High Courts and in the instant case, the fact that the jurisdiction over the Assessing officer lies with the Hon'ble Rajasthan High Court, in our considered view, the ld CIT(A) ought to have considered and followed the decision of the jurisdictional Rajasthan High Court, as evident from series of decisions r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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