TaxTMI 
TaxTMI 
2021 (11) TMI 213
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....eal had not filed the appeal and thereafter left the organization during which time the Nation was going through the pandemic. 3. The Ld AO erred in summarily dismissing the appeal without providing an effective opportunity of hearing to the Appellant. 4. The Ld CIT (A) has while disposing the condonation application filed by the Appellant erred in dismissing the appeal without appreciating the facts of the case. 5. The Ld CIT (A) erred in not appreciating that a lenient view ought to have been taken when major part of the delay was attributable to the Covid-19 pandemic. GROUND ON MERITS: 6. The Ld CIT(A) and the Ld AO erred in determining the total income of the Appellant for AY 2018-19 at Rs. 66,68,662/- against the returned income of Rs. 54,95,175/-. 7. The Ld CIT(A) while dismissing the appeal on technical grounds, erred in upholding the addition of Rs, 11,73,481/- made by the Ld AO towards disallowance of PF and ESI contribution of employees paid beyond the due date under section 36(1)(va) read with section 43B of the Act. 8. The Ld CIT (A) and the Ld AO have erred in making the addition despite the fact that the A....
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.... filing the appeal before the CIT(Appeals), NFAC. Therefore, we have to consider whether the Accountant/Auditor /Counsel's failure is sufficient cause for condoning the delay. 6. The Madras High Court considered an identical issue in the case of Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357) and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression "sufficient cause" should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. 7. On merits, the issue is in favour of the assessee. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation. The assessee filed an affidavit before the CIT(A) saying that the appeal was not filed because of the Accountant's inability to file the appeal. The Revenue has not filed any counter-affidavit to deny the allegation made by the assessee. While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) lai....
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....Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay of 508 days has to be condoned. 10. The next question may arise whether 508 days was excessive or inordinate. There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not filing the appeal. We have to see the cause for the delay. When there was a reasonable cause, the period of delay may not be relevant factor. 11. In fact, the Madras High Court in the case of CIT v. K.S.P. Shanmugavel Nadai and Ors. (153 ITR 596) considered the delay of condonation and held th....
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....kar vs. Smt. Sudha Rani Debi (AIR 1978 SC 537) held that non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause for condonation of delay. In this case, the Revenue has not filed any counter-affidavit opposing the application of the assessee, therefore, as held by the Apex Court, there is sufficient cause for condonation of delay. The Supreme Court observed that when the delay was of short duration, a liberal view should be taken. It does not mean that when the delay was for longer period, the delay should not be condoned even though there was sufficient cause. The Apex Court did not say that longer period of delay should not be condoned. Condonation of delay is the discretion of the Court/Tribunal. 16. Therefore, it would depend upon the facts of each case. In our opinion, when there is sufficient cause for not filing the appeal within the period of limitation, the delay has to be condoned irrespective of the duration/period. In this case, the non-filing of an affidavit by the Revenue for opposing the condonation of delay itself is sufficient for condoning the delay of 508 days. 17. In case the delay is not condoned, it woul....
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....espect of the previous year in which the liability to pay such sum was incurred and the evidence of such payment is furnished by the assessee along with such return. In short, this provision states, notwithstanding anything contained in any other provision contained in this Act, a deduction otherwise allowable in this Act in respect of any sum payable by the assessee as an employer by way of contribution to any fund such as provident fund shall be allowed if it is paid on or before the due date as contemplated under Section 139(1) of the IT Act. This provision has nothing to do with the consequences, provided for under the PF Act/PF Scheme/ESI Act, for not depositing the "contribution" on or before the due dates therein. 16. In the present case, admittedly, though the employer did not deposit the contribution, within the stipulated time, as contemplated by paragraph-30 of the PF Scheme or before the due date under the provisions of the PF scheme/Act, he deposited the contribution to the PF/ESI fund before the due date contemplated under Section 139(1) of the Act. 17. Section 6 of the PF Act provides for contributions and matters which may be provided for in Scheme....
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....meaning of Section 2(24)(x) of the IT Act and in which case, the assessee is liable to pay tax on the said amount treating that as his income, deserves to be rejected. 22. With respect, we find it difficult to endorse the view taken by the Gujarat High Court. We agree with the view taken by this Court in W.A.No.407712013. 23. In the result, the appeal is allowed and the substantial question of law framed by us is answered in favour of the appellant-assessee and against the respondent-revenue. There shall be no order as to costs." 8. Further, he relied on the judgment of Hon'ble Karnataka High Court in the case of CIT v. Sabari Enterprises [2008] 298 ITR 141 (Kar.) has held as under: "This clause is inserted by the Finance Act with effect from April 1, 1988. The Explanation to this clause is read very carefully. "Due date" has been explained stating that: means the date by which the assessee is required as an employer to credit contribution to the employees' account in the relevant fund under any Act, rule or order or notification issued thereunder or under any standing order, award, contract of service or otherwise." Prior to the above clause....
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.... ) or (e) or (B referred to above occurred in the first proviso to section 43B, supports the case of the assessees and also relevant paragraphs extracted from Allied Motor's case [1997] 224 ITR 677 and paragraph 59 referred to supra in this judgment from the Finance Bill with all fours supports the case of the assessee/ respondents. Therefore, we have to answer the substantial question of law No. 1 framed by this court in these appeals at the instance of the Revenue against them, viz., in the negative. Accordingly, we answer the substantial question No. 1 framed in these appeals in the negative. 10. Further he relied on the following judgments:- 1. In Re-Cognizance for Extension of Limitation - Supreme Court of India in M.P No.665/2021 in SMW(C) No.3/2020 dt.19/7/2021. 2. Salzgitter Hydraulics Pvt Ltd vs ITO [2021] 128 taxman.com 192 [Hyderabad Tribunal] 3. M/s Crescent Roadways Pvt Ltd vs DyCIT - ITA.No. 1952 Hyderabad/20 18 4. M/s Mahadev Cold Storage vs Jurisdictional AO - ITA.No.41 & 42/Agra/ 2021 5. M/s Essae Teraoka (P.) Ltd vs DCIT - [2014] 43 taxmann.com 33 (Karnataka) 6. Anand Kumar Jain vs ITO - ITA NO 419....
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....the above order of the Tribunal, we allow this ground taken by the assessee and there cannot be any disallowance by invoking the provisions of section 36(1)(va) r.w.s. 43B of the Act. 21. In the result, the appeal by the assessee is allowed. Pronounced in the open court on this 21st day of October, 2021. ============= Document 1 20 b Details of contributions received from employees for various funds as referred to in section 36(1)(va): S.No. Nature of fund Sum received from employees Due date for The actual The actual date payment amount paid of payment to the concerned authorities Provident Fund 255156 15/05/2016 2 Provident Fund 321103 15/06/2016 537842 12/05/2016 667500 13/06/2016 3 Provident Fund 353043 15/07/2016 740110 12/07/2016 4 Provident Fund 388675 15/08/2016 787248 10/08/2016 5 Provident Fund 394788 15/09/2016 860409 10/09/2016 6 Provident Fund 421393 15/10/2016 870294 13/10/2016 Provident Fund Provident Fund Provident Fund 10 Provident Fand 415294 15/11/2016 447926 15/12/2016 439242 15/01/2017 489661 15/02/2017 Provident Fund ....