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TMI Blog2023 (6) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Considering the said claim of the Assessee and in the facts and circumstances, we deem it fit to restore the issue involved in Ground No. 2 to the file of CIT(A) for de-novo adjudication. Accordingly, without expressing any opinion on the merit, the issue in Ground No. 2 of the Assessee is remanded to the file of Ld. CIT(A) with a direction to the assessee to substantiate the claim - Ground No. 2 is partly allowed for statistical purpose. Addition u/s 43(B) for delayed deposit of GST payable amount on service - It is the specific case of the assessee that the amount has been added u/s 43(B) of the Act was never a part of profit and loss account and the same has been declared in audit report Point No. 26(i)B(b) of the Chartered Accountant and such as Section 43(B) is not applicable. Considering the above ground raised by the assessee, since the CIT(A) has not considered the said issue and no specific finding given thereon, without expressing any opinion on the merit, we deem it fit to restore the issue to the file of the CIT(A) with a direction to the assessee to substantiate the said contention made in the Ground No. 1 and the Ld.CIT(A) is directed to dispose the same in accorda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Account and as such this section u/s 43(B) is not applicable on the said amount. So the appellate order u/s 250 and intimation order u/s 143(1) is void ab initio and liable to be quashed. I.T.A. No. 2983/DEL/2022 (A.Y. 2019-20) On the facts and in the circumstances of the case and also in law, the Ld. CIT(Appeals), NFAC, Delhi ignoring the facts in which confirmed the addition of Rs. 75,20,262/- u/s 43(B) of the IT Act for delayed deposit of GST payable amount on services for the FY 2018- 2019 basically this amount was paid in the FY 2019-2020 onwards and dismissed the appeal. This amount was never a part of Profit Loss account and declared in his audit report point no. 26(1)B(b) of Chartered Account and as such this section u/s 43(B) is not applicable on the said amount. So the appellate order u/s 250 and intimation order u/s 143(1) is void ab initio and liable to be quashed. 4. None appeared for the assessee and the notice issued by the registry to the registered address of the assessee returned with the acknowledgement no such person on this address . Considering the issue involved in the present appeal, we deem it fit to hear the Ld. DR and decide the above Appeals. ITA No. 298 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the various judgments cited on behalf of the assessee i.e., Commissioner of Income-Tax v. Aimil Ltd. 24; Commissioner of Income-Tax and another v. Sabari Enterprises 25; Commissioner of Income Tax v. Pamwi Tissues Ltd. 26; Commissioner of Income-Tax, Udaipur v. Udaipur Dugdh Utpadak Sahakari Sandh Ltd. 27 and Nipso Polyfabriks (supra) would reveal that in all these cases, the High Court s principally relied upon omission of second proviso to Section 43B (b). No doubt, many of these decisions also dealt with Section 36(va) with its explanation. However, the primary consideration in all the judgments, cited by the assessee, was that they adopted the approach indicated in the ruling in Alom Extrusions. As noticed previously, Alom Extrutions did not consider the fact of the introduction of Section 2(24)(x) or in fact the other provisions of the Act. 52. When Parliament introduced Section 43B, what was on the statute book, was only employer s contribution (Section 34(1)(iv)). At that point in time, there was no question of employee s contribution being considered as part of the employer s earning. On the application of the original principles of law it could have been treated only as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The distinction between an employer s contribution which is its primary liability under law in terms of Section 36(1)(iv), and its liability to deposit amounts received by it or deducted by it (Section 36(1)(va)) is, thus crucial. The former forms part of the employers income, and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) - unless the conditions spelt by Explanation to Section 36(1)(va) are satisfied i.e., depositing such 33 amount received or deducted from the employee on or before the due date. In other words, there is a marked distinction between the nature and character of the two amounts the employer s liability is to be paid out of its income whereas the second is deemed an income, by definition, since it is the deduction from the employees income and held in trust by the employer. This marked distinction has to be borne while interpreting the obligation of every assessee under Section 43B. 54. In the opinion of this Court, the reasoning in the impugned judgment that the non-obstante clause would not in any manner dilute or override the employer s obligation to deposit the amounts retained by it or deducted by it from the empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36 of the Act for delayed deposit of EPF ESIC. Accordingly, Ground No. 1 in the Assessee s Appeal is hereby dismissed. GROUND No. 2 12. In the Ground No. 2 assessee contended that the CIT(A) had ignored the fact in which confirmation of the addition of Rs. 5,14,395/- u/s 43(B )of the Act for delay deposit of EPF, ESIC and service tax, further, the amount of EPF of Rs. 4,59,799/-, ESIC of Rs.9,034/- was deposited within stipulated time and rest of Rs.45,562/- of service tax payable was deposited in the Financial Year 2017-18, the said amount of service tax payable was never a part of profit and loss account and as such the Section 43(B) of the Act is not applicable on the said amount. Therefore, the amount of Rs.5,14,395/- is liable to be quashed . 13. The Ld. DR vehemently argued that the CIT(A) has given a specific findings and made addition of Rs.5,14,395/-, therefore, the findings on the said issue requires no interference at the hands of the Tribunal. 14. We have heard the Ld. DR and perused the material available on record. It is the specific case of the assessee in Ground No. 2 that the amount of EPF of Rs. 4,59,799/-, ESIC of Rs.9,034/- was deposited within stipulated time a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tore the issue to the file of the CIT(A) with a direction to the assessee to substantiate the said contention made in the Ground No. 1 and the Ld.CIT(A) is directed to dispose the same in accordance with law, accordingly, we partly allow Ground No. 1 of the assessee for statistical purpose. 19. In the result, Appeal in ITA No. 2982/Del/2022 of the assessee is partly allowed for statistical purpose. ITA No. 2983/Del/2022 (A.Y 2019-20) 20. Even in the present Appeal, the assessee contended that the CIT(A) has erred in confirming the addition of Rs.75,20,262/- u/s 43(B) of the Act for delayed deposit of GST payable amount on service for Financial Year 2018-19 and contended that the said amount was never a part of profit and loss account and declared in the audit report Point No. 26(i)B(b) of Chartered Accountant and Section 43(B) is not applicable. 21. The Ld. DR vehemently argued that the Ground No. 1 urged by the assessee is devoid of merit which has been already considered and adjudicated by the CIT(A). Therefore, the same is liable to be dismissed. 22. We have heard the Ld. DR and perused the material available on record and gave our thoughtful consideration. It is the specific ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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