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TMI Blog2022 (8) TMI 1505X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of employees contribution to provident fund and ESI were made by the respective assessees after stipulated date prescribed under the relevant laws governing provident fund and ESI, but before the due date of filing of return of income prescribed u/s 139(1) of Income Tax Act; is not in dispute. Whether the aforesaid amendments to Income Tax Act by way of Finance Act, 2021 are retrospective or prospective, is debatable and controversial.Adjustments made by Revenue u/s 143(1) of Income Tax Act, whereby aforesaid additions were made to the income of the respective assessee, were unfair, unjust and bad in law.Addition by way of adjustment and 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. Addition by way of adjustment and intimation u/s 143(1) of Income Tax Act, on the basis of retrospective amendment to Income Tax Act is beyond the scope of Section 143(1) of Income Tax Act. In the present appeals before us, additions of aforesaid amount have been made by way of adjustments and intimation u/s 143(1) of Income Tax Act, on a debat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds of appeal at the time of hearing or before the hearing of Appeal. ITA No. 1739/Del/2022 for AY 2020-21 Action of the CIT(A) in confirming the action of A.O. in making an addition of Rs. 8,67,387/- u/s 36(1)(va) of the I. T. Act 1961 for delayed deposit of employees contribution of EPF and ESI but paid before the due date of filing of return is unjust, illegal, arbitrary and against the facts and circumstances of the case and against the decisions of ITAT in ITA No. 1000/Del/2021 dated 25.11.2021 in the appellant s own case in the immediately preceding assessment year A.Y.2019-20. ITA No. 1642/Del/2022 for AY 2019-20 1. That the learned CIT (Appeals) has grossly erred both on facts and in law in computing the net income of the appellant in an assessment order for AY; 2019-20 dated 04/05/2022 U/s 250 of the Income Tax Act of Rs. 62,63,219/- against the returned income of Rs. 15,26,173/-. 2. That the AO (CPC) has erred in making the disallowance of Rs. 47,37,046/- received from employees as contribution to any provident fund or any fund set up under ESI PF Act to the extent not credit to the employees account on or before the due date and has wrongly applied provision of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the appellant and passed the order by not considering adjournment request made by the assesse and without giving the proper opportunity of heard, which is violation of constitutionally guaranteed Principle of Natural Justice. 4. On the facts and circumstances of the case and in law, the assessing officer has erred in making addition of Rs. 14,98,971/- on account of late deposit of employee s contribution. 5. On the facts and circumstances of the case and in law, the addition of Rs. 14,98,971/- made by the assessing officer and correspondingly confirming the same by CIT(A) is beyond the scope of provisions of section 36(1)(va) read with section 43B of the Income Tax Act, 1961. 6. The Ld. CIT(A) has ignored the judgments passed by honorable Delhi High Court, quoted by assessee in its submission and passed the order against the assessee. 7. The Ld. CIT(A) erred and took the retrospective effect of amendment made in section 36 (1) (va) and section 43B by Finance Act 2021 and passed the order against the assessee. The aforesaid grounds of appeal are without prejudice to each other. The appellant craves leave to add, alter, modify or delete one or more ground of appeal before or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of the case, the learned A.O. (CPC) has erred both on facts and in law in passing the order under section 143(1) of the Act without providing reasonable opportunity of being heard to the assessee. 3. On the facts and circumstances of the case, the learned A.O.(CPC) has erred both on facts and in law in making the disallowance by exercising its powers beyond the scope of section 143(1) of the Income Tax Act. 4. On the facts and circumstances of the case, the learned AO(CPC) has erred both on facts and in law in assessing the income at Rs. 81,62,920/- as against returned income of Rs. 68,65,830/- as claimed by the assessee. 5. (i) On the facts and circumstances of the case, the learned A.O.(CPC) has erred both on facts and in law in making the disallowance of Rs. 12,97,093/-on account of employees contribution towards recognized provident fund invoking the provision of section 36(1 )(va) of the Act. (ii) That the disallowance has been made ignoring the various judicial pronouncement that employees contribution towards provident fund and ESI would qualify for deduction even if paid after due date prescribed under Provident Fund Act / ESI Act but before due date of filing of retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intimation issued u/s 143(1) 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 through deposited before the due date of filing ITR under section 139 of the Income Tax Act by invoking amendment provisions of section 36(1)(va) and 43B of the Income tax Act, 1961 retrospectively, which are applicable prospectively from the AY 2021-22 without appreciating the explanation furnished by the appellant. 4. That the appellant craves leave to add, amend or alter any of the grounds of appeal. ITA No. 1781/Del/2022 for AY 2018-19 1. That on the facts and circumstances of the case and in law, the Commissioner of Income tax (Appeals) - National Faceless Appeal Centre, Delhi [ the CIT(A) -NFAC ] has erred in upholding the disallowance of Rs. 16,07,092/- made under section 36(l)(va) read with section 2(24)(x) of the Income tax Act, 1961 ( the Act ) for the reason that the employee's contribution to ESI and PF were deposited late. 1.1 That on the facts and circumstances of the case and in law, the CIT(A)-NFAC has erred in holding that Explanation 2 to section 36(1)(va) and Explanation 5 to section 43B inserte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to PF/ESI. These amounts were deposited by the respective assessees after the specified date prescribed under the relevant laws governing PF/ESI; but before the due date of filing of return of income prescribed u/s 139(1) of IT Act. The aforesaid amounts were added to the respective assessees income by Revenue, u/s 143(1) of IT Act, by invoking section 36(1)(va)/section 43B of IT Act. The assessees filed appeal before Ld. Commissioner of Income Tax (Appeals) [ Ld. CIT(A) for short]. In the respective impugned appellate orders of Ld. CIT(A); the appeal filed by assessee was allowed in the case of M/s Jagatjit Industries Ltd. (ITA No. 1725/Del/2022) and in the case of other assessees, the Ld. CIT(A) dismissed the assessee s appeals. The present appeals before us in the case of M/s Jajatjit Industries Ltd. (ITA No. 1725/Del/2022) has been filed by Revenue and the other present appeals before us have been filed by the respective assessees; against the respective impugned appellate orders of Ld. CIT(A). (C) At the time of hearing before us, the Ld. CIT(DR) submitted that the amendments brought to section 36(1)(va) of IT Act (by way of insertion of Explanation-2) and to section 43B o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been decided in favour of the assessee and against Revenue. Some such decisions are: Digiqal Solution Services Pvt. Ltd. vs. Assistant Director of Income Tax [2021] 92 ITR (Tribunal) 404 (Chandigarh) for Assessment Year 2019-20 (order dated 4th October, 2021); Shand Pipe Industry Pvt. Ltd. vs. DCIT (CPC), [2022] 93 ITR (Trib.) 54 (Bangalore) for Assessment Year 2018-19 (order dated 27th Dec., 2021); Mahadev Cold Storage vs. Jurisdictional Assessing Officer [2021] 190 ITD 273 for Assessment Year 2018-19 and 2019-20 in ITA Nos. 41 42/Agr/2021 (order date 14.06.2021); Nikhil Mohine vs. DCIT [2022] 93 ITR (Trib.) 658 (Jabalpur) for Assessment Year 2018-19 (order dated 18th Nov., 2021 of SMC Bench, Jabalpur); Gopalkrishna Aswini Kumar vs. Assistant Director of Income Tax [2022] 192 ITD 562 (Bangalore-Trib.) for Assessment Year 2019-20 (order dated 13.10.2021 in ITA No. 359/Bang./2021); Continental Restaurant and Caf Co. vs. Income Tax Officer [2021] 91 ITR (Trib.) (S.N.) 60 (Bangalore) for Assessment Year 2019-20 (order dated 11th October, 2021 of SMC Bench of Bangalore); and TML Business Services Ltd. [2022] 93 ITR (Trib.) (S.N.) 35 (Mumbai) for Assessment Year 2017-18 (order dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y view advanced by Revenue is taken, that the aforesaid amendments are retrospective; then the question that will arise is whether such a debatable and controversial view can be invoked for making adjustments u/s 143(1) of Income Tax as per the intimation issued to the assessee u/s 143(1) of Income Tax Act. (C.1.3.1) It is well settled that any 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. In this regard, we respectfully mention the order of Hon ble Delhi High Court in the case of ACIT vs. Haryana Telecom Pvt. Ltd. 14 taxman.com 122 (Delhi). Similar view was taken by Hon ble Courts in the cases of George Williamson (Assam) Ltd. vs. CIT Anr. [2006] 286 ITR 0533 (Gauhati); Tata Yadogawa Ltd. vs. CIT [2011[] 335 ITR 0053 (Jharkhand); God Granites vs. Central Board of Direct Taxes Ors. [1996] 218 ITR 0298 (Karnataka); Swamy Distributors vs. ACIT Ors. [2003] 180 CTR 0290; 139 Taxman 0310 (Karnatka), CIT vs. Eicher Goodearth Ltd. [2008] 296 ITR 0125 (Delhi); Smt. Shanta Chopra vs. ITO [2004] 271 ITR 0132 (Delhi); Kvaverner John Brown Engg. (India) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby aforesaid additions were made to the income of the respective assessee, were unfair, unjust and bad in law. (d) Addition by way of adjustment and 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. (e) Addition by way of adjustment and intimation u/s 143(1) of Income Tax Act, on the basis of retrospective amendment to Income Tax Act is beyond the scope of Section 143(1) of Income Tax Act. (f) In the present appeals before us, additions of aforesaid amount have been made by way of adjustments and intimation u/s 143(1) of Income Tax Act, on a debatable and controversial issue. (C.2.1) In the light of the foregoing conclusions in paragraph (C. 2) of this order and the preceding discussion, we are of the view that the aforesaid additions by way of adjustment and intimation u/s 143(1) of Income Tax Act, were beyond the scope of Section 143(1) of Income Tax Act. Accordingly, we set aside the impugned appellate orders of Ld. CIT(A) in the cases of Garg Heart Centre Nursing Home Private Limited, Global Groupware Solutions Limited, Publix R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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