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TMI Blog2022 (8) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... Anadee Nath Misshra, Accountant Member For the Appellant : Sh. Narendra Kumar Rustogi, Authorized Representative, Sh. Ashok Khandelwal, Authorized Representative, Shri Aman Garg, Advocate, Shri Hemant Jain, Advocate, Ms. Timsy Sharma, Authorized Representative For the Respondent : Sh. H.K. Choudhary, Commissioner of Income Tax, Departmental Representative ("CIT-DR" for short) ORDER PER BENCH: (A) The captioned appeals filed by the respective assessees/Revenue are hereby disposed off through this consolidated order, for the sake of convenience, as the issue involved in these appeals is common. The grounds of appeal are as under: ITA No.1700/Del/2022 for AY 2018-19 "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeal) [CIT(A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in passing the order without providing reasonable opportunity of being heard to the assessee in clear violation of principle of natural justice. 3. (i) On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) had failed to distinguish the submission of Assessee and is merely relying on the order of Assessing officer. Department or AO should have act wisely to support the assessee. Each and every assessee should not be looked at as a tax evader. Appellant prays that the order of the Learned CIT (Appeals) is against the principles of natural justice and equity and thus deserves to be quashed. 4. The Learned CIT (Appeals) erred in law and on facts of the case in sustaining the order of Assessing officer. The business nature of the assessee should also be kept in mind and appellate authority should look at the case not from the perspective of department rather they should act as a judge to give required justice to the parties. 5. That the total income assessed and the Income-tax demand created thereon are arbitrary unjust and illegal. At any rate, without prejudice, the same is very excessive It is, therefore, prayed that the impugned addition of Rs. 47,37,046/- be deleted and the appeal be allowed. 6. That the appellant reserves its right to add, amend/modify the grounds of appeal." ITA No.1653/Del/2022 for AY 2018-19 "1. On the facts and circumstances of the case and in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the National Faceless Appeal Centre (NFAC) is bad both in the eye of law and on facts. 2. (i) On the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the disallowance of Rs.27,79,194/- made by the AO(CPC) on account of late deposit of employees' contribution towards provident fund and employees state insurance Fund. (ii) That the above disallowance has been confirmed ignoring the contention of the assesse that employees' contribution towards provident fund and ESI Fund would qualify for deduction even if paid after due date prescribed under Provident Fund Act and ESI Act but before due date of filing of return of income in view of section 43B of the Income Tax Act. 3. On the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the addition ignoring the various judicial pronouncements brought on record by the assessee in this regard. 4. On the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the addition ignoring the fact that the amendment made by the Finance Act, 2021 will be applicable prospectively and therefore not applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in law in charging interest under Section 234B and 234C of the Act. 7. That the appellant craves leave to add, amend or alter any of the grounds of appeal." ITA No.1767/Del/2022 for AY 2018-19 "1. That the CIT(A) has erred in law in sustaining the order passed by the AO, CPC Bengaluru in which he has made the addition of Rs.15,66,558/- pertaining to late deposit of ESI & EPF, even when the same was deposited before the due date of filing the income tax return. 2. That the CIT(A) while confirming the order/intimation passed U/s 143(1), has failed to appreciate that amendment in section 36 (1)(va) is being effective from the A.Y.2021-22 and is thus not applicable to the present assessment year viz. 2018-19" ITA No.1779/Del/2022 for AY 2020-21 "1. That on the facts and in the circumstances of the appellant's case, the learned National Faceless Appeal Centre erred both in facts and in law in out rightly dismissing the appeal without passing a speaking order that disallowance of Rs.39,04,415/- debited in P&L account on account of crediting employees contribution of PF and ESI in their account after due date as per the said fund under the relevant Act by invoking provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld apply to pending proceedings. It was not appreciated that the amendment to sections 36(1)(va) and 43B by the Finance Act, 2021 was prospective. 1.2 Without prejudice, that on the facts and circumstances of the case and in law, the reasons recorded by the CIT(A)- NFAC have been considered and not accepted in Pr. CIT v. Rajasthan State Beverages Corpn Ltd [2017] 250 Taxman 16 (SC), CIT v. AIMIL Ltd. (2010) 321 ITR 508 (Del), CIT v. M. L. Outsourcing P. Ltd. [ITA No.10/2016 dated 13.1.2016], Pr. CIT v. Pro Interactive Service (India) Pvt. Ltd. [ITA 983/2018 dated 10.9.2018] and Raj Kumar v. ITD, CPC Bengaluru [2022] 136 taxmann.com 244 (Delhi - Trib.). In any case, since there existed two views, the view in favour of the assessee was required to be adopted. That the Appellant craves leave to add, alter, amend or vary any of the ground either at or before the hearing of the appeal." ITA No.1725/Del/2022 for AY 2020-21 by Revenue "1. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition/disallowance of Rs.2,50,49,705/- u/s 36(1)(va) of the Act, being delayed payment to PF and ESI. 2. That the appellant craves le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective in nature. It was his contention that these amendments being retrospective in nature; the aforesaid additions made u/s 143(1) were justified. Accordingly, he defended these additions. (C.1) The Learned Authorized Representatives ("Ld. ARs") for the respective assessees contended that the aforesaid amendments to section 36(1)(va) and section 43B were prospective in nature applicable with effect from AY 2021-22; and had no application for the relevant Assessment Years, to which these appeals before us pertain. They also contended that, in any case, the issue was beyond the scope of addition by way of adjustment/intimation u/s 143(1) of IT Act. They submitted that the additions, therefore, deserved to be deleted. (C.1.1) We have heard both sides. We have perused the materials on record. Relevant facts are not in dispute. In all these appeals before us, the employees' contribution to ESI/Provident Fund, were deposited by the respective assessees after the specified date prescribed under laws governing ESI/Provident Fund. However, these payments were deposited by the respective assessees well before the date of filing of return of Income Tax prescribed under section 139(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Restaurant and Café Co. vs. ITO (supra), Nikhil Mohine vs. DCIT (Supra), Shand Pipe Industry Pvt. Ltd. vs. DCIT (supra); Digiqal Solution Services Pvt. Ltd. vs. Assistant Director of Income Tax (supra) and Gopalakrishna v/s ADIT (supra), the different Benches of Income Tax Appellate Tribunal have, in fact, specifically considered the aforesaid amendments brought to Income Tax Act by Finance Act, 2021; and have taken the view that the amendments are prospective in nature (i.e. applicable from AY 2021-12 onwards) having no application for the period prior to 01.04.2021 i.e. for assessment years prior to AY 2021-22. Even if Revenue does not accept the view, that the aforesaid amendments are prospective in nature having no application for Assessment Years prior to Assessment Year 2021- 22; it is clearly established in the light of aforesaid decisions of Income Tax Appellate Tribunal (ITAT); referred to in this paragraph earlier, that the issue whether the aforesaid amendments are prospective or retrospective, is at least debatable and controversial, on which a view in faour of the assessee (that the aforesaid amendments are prospective) can legitimately exist, even if such a vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 305 ITR 0103 (Supreme Court). In these present appeals before us, the additions have been made by way of adjustments, vide intimations issued under section 143(1) of Income Tax Act. In view of the foregoing precedents, we are of the view that the aforesaid adjustments made by Revenue u/s 143(1) of IT Act were unfair, unjust, and bad in law. For this view, we also respectfully take support from the order of Agra Bench of ITAT, in the case of Mahadev Cold Storage vs. Jurisdictional Assessing Officer (supra). At the very least, Revenue should have given due consideration to the fact that the issue was highly debatable and controversial. As already discussed earlier, adjustments u/s 143(1) of Income Tax Act by way of intimation u/s 143(1) of Income Tax Act, on debatable and controversial issues, is beyond the scope of section 143(1) of Income Tax Act. Revenue was clearly in error, in making the aforesaid adjustments u/s 143(1) of Income Tax Act on a debatable and controversial issue. We would also like to make respectful mention of order of Jabalpur Bench of ITAT in the case of Nikhil Mohine vs. DCIT (supra), in which similar view has been taken. (C.1.4) Further, it is also well settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors and Facilitators Private Limited, M/s Samarpit Surksha Private Limited, Ritu Mukherji, Manmohan Raizada, Girdhari Yadav, Dharamjit Singh, Virender Pratap Singh and Ansal API Infrastructure Limited respectively and direct the Assessing Officer to delete the additions made by way of adjustments/intimation u/s 143(1) of IT Act. For the same reasons, we uphold the impugned appellate order of Ld. CIT(A) in the case of M/s Jagatjit Industries Ltd. (D) By way of abundant caution, we hereby clarify that we have not expressed any view in this order, on whether the aforesaid amendments brought in by Finance Act, 2021 [whereby Explanation-2 was inserted in Section 36(1)(va) of Income Tax Act and Explanation-5 was inserted in Section 43B of Income Tax Act] are prospective or retrospective. In the light of our decision in foregoing paragraph (C.2.1) of this order; this issue is merely academic in nature; hence not decided. (E) In the result, all these appeals are treated as partly allowed for statistical purposes. This order was already pronounced orally on 22nd August, 2022 in Open Court, in the presence of Ld. CIT(DR) for Revenue, and the representatives of the respective assessees. No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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