TaxTMI 
TaxTMI 
2022 (4) TMI 738
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....d in confirming the action of Assessing Officer (AO) in treating employee's contribution to provident fund and ESI amounting to Rs. 13,93,789/- as income of the appellant under section 2(24)(x) read with section 36(1) of the Act. 4. The learned AO has erred in not appreciating the fact that employees' contribution to provident fund and ESI remitted before due date for filing return of income under section 139(1) of the Act is allowable under section 43B of the Act and as per judicial decisions. The appellant submits that each of the above grounds / subgrounds are independent and without prejudice to one another. The appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at the time of hearing, of the appeal, so as to enable the Incometax Appellate Tribunal to decide the appeal according to law." The appellant prays, accordingly." 3. Brief facts of the case are as follows: The assessee is engaged in the business of computer software and hardware consultancy. For the assessment year 2018-2019, the return of income was filed on 31.10.2018, declaring a loss of Rs. 2,25,23,363. Th....
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....part of the assessee in filing the appeal and the delay is due to reasonable cause which may be condoned. 7. The Ld DR on the other hand supported the actions of the CIT(A) in not condoning the delay 8. We have heard the rival submissions and perused the materials on record. Out of the delay of 242 days in filing the appeal before the CIT(A), the actual delay to be condoned is 92 days as for the balance 150 days from 20.03.2020 to 17.08.2020 there is no delay considering the provisions of section 3(1)(b) of the Taxation and Other Laws (Relaxation and Amendments of Certain Provisions) Act 2020. We will therefore consider whether the bona fide belief of the assessee, that the employee contribution of PF and ESI was accepted in the intimation 143(1) since the refund was accepted, is a sufficient cause for the delay. 9. 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 basis the bona fide belief of the assessee that there is no issue under dispute in the intimation u/s.143(1). We no....
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.... A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 8. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay. In the case on our hand, the issue on merits regarding allowability of deduction u/s. 36(1)(va) r.w.s. 43B of the Act was covered in favour of the assessee by the order of the Tribunal. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the appeal was not filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Trib....
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....use" should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal construction. 14. In this case, the issue on merit regarding granting of deduction u/s. 36(1)(va) r.w.s. 43B of the Act is covered in favour of the assessee by the Judgment of the Madras High Court. Therefore, for the purpose of advancing substantial justice which is of prime importance in the administration of justice, the expression "sufficient cause" should receive a liberal construction. In our opinion, the above Judgment is also squarely applicable to the facts of this case. A similar view was taken by the Madras High Court in the case of Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad). 15. The Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) (277 ITR 1) has condoned the delay of 180 days when the appeal was filed after the pronouncement of the Judgment of the Apex Court. Furthermore, the Revenue has not filed any counter-affidavit opposing the ....
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....e the refund amount claimed is accepted there is no issue under dispute in the intimation is a sufficient cause for the delay in filing the appeal before the CIT(A). We therefore condone the delay of 139 days in filing the appeal and admit the appeal for further adjudication on merits. The assessee's ground on this issue is allowed 12. On merits of the case, it was stated that the assessee had paid the employees' contribution to PF and ESI prior to the due date of filing of the return u/s 139(1) of the I.T.Act. Therefore, it was submitted that the assessee is entitled to deduction of employees' contribution to PF and ESI having regard to the provisions of section 43B of the I.T.Act. In this context, the assessee relied on the judgment of the Hon'ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT, reported in 366 ITR 408 (Kar.). The CIT(A), however, rejected the appeal of the assessee. The CIT(A) did not go into the merits of the case and dismissed as there was a delay in filing the appeal which the CIT(A) did not condone. 6. Aggrieved, assessee has filed this appeal before the Tribunal. The learned AR submitted that an identical issue was decided in ....
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.... payment of contributions. As provided in sub para (1), the employer shall, before paying the member, his wages, deduct his contribution from his wages and deposit the same together with his own contribution and other charges as stipulated therein with the provident fund or the fund under the ESI Act within fifteen days of the closure of every month pay. It is clear that the word "contribution" used in Clause (b) of Section 43B of the IT Act means the contribution of the employer and the employee. That being so, if the contribution is made on or before the due date for furnishing the return of income under sub-section (1) of Section 139 of the IT Act is made, the employer is entitled for deduction. 21. The submission of Mr.Aravind, learned counsel for the revenue that if the employer fails to deduct the employees' contribution on or before the due date, contemplated under the provisions of the PF Act and the PF Scheme, that would have to be treated as income within the 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 ....