SHRI SUBA SINGH PROP DSP PIPE FITING WORKS , JALANDHAR v. INCOME TAX OFFICER WARD-2(4), JALANDHAR

ITA 85/ASR/2021 | 2019-2020
Pronouncement Date: 09-11-2021 | Result: PartlyAllowed

Appeal Details

RSA Number 8520914 RSA 2021
Assessee PAN AACFB9414B
Bench Amritsar
Appeal Number ITA 85/ASR/2021
Duration Of Justice 1 month(s) 17 day(s)
Appellant SHRI SUBA SINGH PROP DSP PIPE FITING WORKS , JALANDHAR
Respondent INCOME TAX OFFICER WARD-2(4), JALANDHAR
Appeal Type Income Tax Appeal
Pronouncement Date 09-11-2021
Appeal Filed By Assessee
Order Result PartlyAllowed
Bench Allotted DB
Assessment Year 2019-2020
Appeal Filed On 22-09-2021
Judgment Text
आयकर अपीलीय अधिकरण अमृतसर न्यायपीठ अमृतसर IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH AMRITSAR (THROUGH VIDEO CONFERENCING AT CHANDIGARH) श्री एन.के.सैनी उपाध्यक्ष एवं श्री एन.के.चौिरी न्याधयक सदस्य के समक्ष । BEFORE SHRI N. K. SAINI VICE PRESIDENT & SHRI N. K. CHOUDHRY JUDICIAL MEMBER आयकर अपील सं./ITA No.85/ASR/2021 ( धनिाारण वर्ा / Assessment Year : 2019-2020) Suba Singh 35 D.S.P. Pipe Fitting Works Industrial Estate Extension Jalandhar-144004 Punjab Vs ITO Ward-2(4) Jalandhar PAN No. : AACFB 9414 B (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) धनिााररती की ओर से /Assessee by : Shri Rakesh Chopra Adv. राजस्व की ओर से /Revenue by : Shri S.M.Surendranath Sr.DR सुनवाई की तारीख / Date of Hearing : 10/11/2021 घोर्णा की तारीख/Date of Pronouncement : 10/11/2021 आदेश / O R D E R Per N. K. Choudhry JM The assessee has preferred this appeal against the order dated 27.07.2021 impugned herein passed by the CIT(A) National Faceless Appeal Centre (NFAC) Delhi for the assessment year 2019-2020 u/s.250 of the Income Tax Act 1961 (hereinafter referred to as ‘the Act’). ITA No.85/Asr/2021 2 2. There are two issues raised by the assessee in the present appeal i.e. grounds No.1 to 3 are relating to the deposit of employees’ contributions qua ESI & PF after the due date as prescribed in the relevant Acts however before the due date of filing of return of income u/s.139(1) of the Act resulting into making disallowance of Rs.3 30 067/- for the assessment year under consideration. And ground No.4 is with regard to disallowance of claim of the assessee u/s.80C of the Act of Rs.1 10 710/-. 3. Against the above order of AO the assessee preferred first appeal before the CIT(A) however the CIT(A) sustained the addition made by the AO while dismissing the appeal of the assessee. 4. Further feeling aggrieved the assessee is in appeal before us. 5. Having heard the parties and perused the material available on record. The assessee raised the arguments against the impugned order whereas the Ld. DR vehemently supported the same. ITA No.85/Asr/2021 3 5.1 First we shall decide the grounds No.1 to 3 which pertains to addition made on account of employees’ contribution to PF & ESI. We may observe that the issue related to the employees’ contributions qua ESI & PF involved in the present appeal is squarely covered by the decision of coordinate bench of the Tribunal delivered in the case of Vinko Auto Industries Limited Versus DCIT CPC Bangalore (ITA Nos.63 & 64/ASR/2021 decided on 08/11/2021) wherein the Tribunal has deleted the disallowances made by the AO on account of delay in depositing the employees’ contribution towards ESI & PF as the same were deposited later than the prescribed time in the relevant acts but prior to the filling of the Return u/s.139(1) of the Act . The concluding part of thep Tribunal’s order is as under: - The CIT(A) while upholding the disallowance/addition qua employees contributions towards PF & ESI mainly focused on two aspects/determinations- (i) non-applicability of the provisions of Section 43B of the Act to the employee’s share qua PF & ESI and (ii) applicability of the amended provisions of Section 36(1)(va) and 43B of the Act wherein Explanations have been inserted by Finance Act 2021. For better clarification and ready reference the Explanations 2 and 5 inserted in sections 36(1)(va) and Section 43B of the Act respectively are reproduced herein which reads as under :- Section 36(1)(va)-“Explanation 2.—For the removal of doubts it is hereby clarified that the provisions of section ITA No.85/Asr/2021 4 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the “due date” under this clause.” Section 43B- “Explanation 5.—For the removal of doubts it is hereby clarified that the provisions of this section shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 applies.” 5.1 We may observe that the ld. CIT(A) in its order at para no. 7.15 itself has observed that the issue has been highly contentious and different High Courts have taken divergent views on the same issue out of which some are in favour of the assessee and some are against the assessee. The ld. CIT(A) further observed that the judgments and orders relied upon by the assessee have been rendered before the clarificatory amendments made in the Finance Act 2021 and the Finance Act 2021 has put an end to this controversy. 5.2 Admittedly there is plethora of judgments in favour of the Assessee’s contention and of the Revenue. The controversy with regard to divergent views of different High Courts has been settled by the Hon'ble Apex Court in the case of CIT Vs. M/s. Vegetables Products Ltd. (88 ITR 192) by laying the dictum that if two reasonable constructions of a taxing provision are possible that construction which favours the Assessee must be adopted. The Hon’ble jurisdictional High Court in the case of CIT Vs. M/s Hemla Embroidery Mills (P) Ltd. (366 ITR 167) (P&H HC) and in the case of CIT Vs. M/s Mark Auto Industries Ltd. (358 ITR 43) (P&H HC) clearly held that the assessee is entitled to claim deduction of ITA No.85/Asr/2021 5 employee’s share of ESI & PF u/s.43B of the Act if the same has been deposited prior to the filing of return of income u/s.139(1) of the Act. From the above judgments of the Hon’ble jurisdictional High Court it is clear that the Hon’ble Court has not drawn any distinction between the employee’s and employer’s share qua PF & ESI contributions. Admittedly there are no contrary judgements of the jurisdictional High Court against the assessee on the aspect under consideration hence first determination of the Ld. CIT(A) qua non-applicability of the provisions of Section 43B of the Act to the employee’s share qua PF & ESI is unsustainable. 5.3 Now coming to the second aspect/determination made by the CIT(A) to the effect that the amendment made in Section 36(1)(va) and 43B of the Act by Finance Act 2021 has to be considered as clarificatory in nature and having retrospective effects therefore would be applicable to the previous assessment years as well. We may observe that various benches of the ITAT including Hyderabad Bench in the case of Value Momentum Software Services Pvt. Ltd. (ITA No.2197/Hyd/2017 decided on 19.05.2021) have taken into consideration the identical issue qua applicability of the amendment to Section 36(1)(va) and Section 43B of the Act by inserting Explanations by the Finance Act 2021 and clearly held that the amendment shall be applicable from 1 st April 2021 ITA No.85/Asr/2021 6 onwards . It is also relevant to note that the CBDT has also issued Memorandum of Explanation qua applicability of the amended provisions of Section 36(1)(va) & 43B of the Act w.e.f. 1 st April 2021 and Assessment Year 2021-21 onwards hence there is no doubt qua applicability of the amended provisions referred above prospectively. On the aforesaid discussion the second aspect as considered/determined by the ld. CIT(A) qua retrospective application of the amended provisions of Section 36(1)(va) and 43B of the Act wherein Explanations have been inserted by Finance Act 2021 qua employees’ share in respect of PF & ESI Act is also unsustainable . 5.4 In view of the above discussions the disallowances of Rs.5 88 203/- for A.Y.2018-2019 and Rs.60 540/- for A.Y.2019-2020 made by the A.O. and confirmed by the CIT(A) are not sustainable and hence the same stands deleted. 6. In the result both the appeals of the assessee are allowed. 5.2. Since the facts involved in the present case are identical to the facts involved in the case stated above therefore respectfully following the aforesaid order of the Coordinate Bench of the Tribunal the disallowance of Rs.3 30 067/- qua ITA No.85/Asr/2021 7 employees’ contribution towards PF and ESI sustained by the Ld. CIT(A) stands deleted. Thus grounds No.1 to 3 are allowed. 6. Now coming to the ground No.4 which pertains to affirmation of disallowance of claim u/s.80C of the Act. The assessee has submitted that though the assessee has filed relevant documents as appears in Paper Book at Pages No.49 & 50 in support of its claim u/s.80C of the Act however the ld. CIT(A) did not consider the same and wrongly or inadvertently observed in the impugned order that the appellant has not given any submissions and evidences regarding the disallowance of deduction u/s.80C of the Act therefore the decision of ADIT CPC to confirm the disallowance of Rs.1 10 710/- u/s.80C of the Act is not disturbed. The ld. DR did not refute the claim of the assessee. 6.1 Considering the peculiar facts and circumstances of the case to the effect that though the assessee has filed relevant documents in support of its claim u/s.80C of the Act in CPC however the same remained un-considered by the AO as well as by the ld. CIT(A) therefore without going into controversy in the interest of justice and for the just decision ITA No.85/Asr/2021 8 of the case this issue is remanded back to the file of AO to decide afresh the claim of the assessee while considering the documents already filed by the assessee. Needless to say sufficient opportunity of hearing shall be provided to the assessee. Thus ground No.4 raised by the assessee stands allowed for statistical purposes. 7. In the result the appeal of the assessee is partly allowed and remaining allowed for statistical purposes. Order pronounced in the open court on 10/11/2021. Sd/- Sd/- (एन. के. सैनी) ( N. K. SAINI) (एन.के.चौिरी) (N.K.CHOUDHRY) उपाध्यक्ष / VICE PRESIDENT न्याधयक सदस्य / JUDICIAL MEMBER ददनांक Dated /11/2021 Prakash Kumar Mishra Sr.PS(on tour) आदेश की प्रधतधलधप अग्रेधर्त/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER (Assistant Registrar) आयकर अपीलीय अधिकरण अमृतसर / Income Tax Appellate Tribunal Amritsar 1. अपीलार्थी / The Appellant- Suba Singh 35 D.S.P. Pipe Fitting Works Industrial Estate Extension Jalandhar-144004 Punjab 2. प्रत्यर्थी / The Respondent- ITO Ward-2(4) Jalandhar 3. आयकर आयुक्त(अपील) / The CIT(A) 4. आयकर आयुक्त / CIT 5. धवभागीय प्रधतधनधि आयकर अपीलीय अधिकरण अमृतसर / DR ITAT Amritsar 6. गार्ा फाईल / Guard file. सत्याधपत प्रधत //True Copy//