2022 (3) TMI 1389

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....n on law, the Education Cess and the Secondary and Higher Education Cess amounting to Rs.1,27,329/- is a disallowable expenditure u/s 40(a)(ii) of the Income-tax Act, 1961. (Tax Effect: Rs.44,565/-) The above ground is an additional ground. 3. The appellant craves leave to add, delete, modify/amend the above grounds of appeal with the permission of the Hon'ble appellate authority. (B) The first issue in dispute in this appeal is regarding the additions totaling Rs.21,63,304/- made by the Assessing Officer u/s 36(1)(va) of Income Tax Act. These payments by way of employees' contribution to ESI/EPF were deposited by the assessee after the specified date prescribed under the relevant laws governing ESI and EPF. However, payments were deposited by the assessee well before due date of filing of return of income under Section 139(1) of Income Tax Act. The aforesaid additions totaling Rs.21,16,043/- were made by way of adjustments u/s 143(1) of Income Tax Act; vide intimation dated 16.10.2019. The assessee filed appeal before Ld. CIT(A) on 15.11.2019, which was disposed of by the Ld. CIT(A) vide impugned appellate order dated 09.09.2020; wherein the Ld. CIT(A) directed the Assessing ....

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....18-19; which is before 01.04.2021. We are aware of some reported orders of ITAT, passed after the aforesaid amendments were brought in by Finance Act, 2021; in which the issue in dispute for Assessment Years prior to Assessment Year 2021-22 (i.e. for periods before 01.04.2021) has 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....

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....good for Assessment Year 2018-19, to which this appeal pertains. In such a scenario, the aforesaid additions of Rs.21,63,304/- have no legs to stand; and the same deserves to be deleted. If, however, the contrary view in favour of 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. (D.1.2) 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 Jurisdictional 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 D....

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....r. Vs. DCIT & Ors.[1995] 212 ITR 0496 (Calcutta) was approved. Same view was taken by the Hon'ble Madhya Pradesh High Court in the case of CIT vs. Satish Traders [2001] 247 ITR 0119 (Madhya Pradesh). (D.2.1) In view of foregoing discussion, we come to the following conclusions: (a) The fact that payments amounting to aforesaid Rs.21,63,304/- by way of employees contribution to provident fund and ESI were made by the assessee 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. (b) Whether the aforesaid amendments to Income Tax Act by way of Finance Act, 2021 are retrospective or prospective, is debatable and controversial. (c) Adjustments made by Revenue u/s 143(1) of Income Tax Act, whereby aforesaid additions of Rs.21,63,304/- were made, 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) Ad....