TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 1505
X X X X Extracts X X X X
X X X X Extracts X X X X
....NCH: (A) The captioned appeals filed by the respective assessees/Revenue are hereby disposed off through this consolidated order, for the sake of convenience, as the issue involved in these appeals is common. The grounds of appeal are as under: ITA No. 1700/Del/2022 for AY 2018-19 "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeal) [CIT(A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in passing the order without providing reasonable opportunity of being heard to the assessee in clear violation of principle of natural justice. 3. (i) On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 3,54,880/- made by the AO(CPC) on account of late deposit of employees' contribution towards provident fund and ESI Fund (ii) That the above disallowance has been confirmed ignoring the contention of the assessee that employees' contribution towards provident fund and ESI Fund would qualify for deduction even if paid after due date prescribed under Prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be quashed. 4. The Learned CIT (Appeals) erred in law and on facts of the case in sustaining the order of Assessing officer. The business nature of the assessee should also be kept in mind and appellate authority should look at the case not from the perspective of department rather they should act as a judge to give required justice to the parties. 5. That the total income assessed and the Income-tax demand created thereon are arbitrary unjust and illegal. At any rate, without prejudice, the same is very excessive It is, therefore, prayed that the impugned addition of Rs. 47,37,046/- be deleted and the appeal be allowed. 6. That the appellant reserves its right to add, amend/modify the grounds of appeal." ITA No. 1653/Del/2022 for AY 2018-19 "1. On the facts and circumstances of the case and in law. The communication of proposed adjustment u/s 143(1 )(a) issued in this case is bad-in-law, illegal, without jurisdiction and, therefore, the said communication u/s 143( 1 )(a) alongwith intimation order passed on the foundation of such communication are liable to be quashed. 2. On the facts and circumstances of the case and in law, the assessment proceedings initiated are c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd. (ii) That the above disallowance has been confirmed ignoring the contention of the assesse that employees' contribution towards provident fund and ESI Fund would qualify for deduction even if paid after due date prescribed under Provident Fund Act and ESI Act but before due date of filing of return of income in view of section 43B of the Income Tax Act. 3. On the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the addition ignoring the various judicial pronouncements brought on record by the assessee in this regard. 4. On the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the addition ignoring the fact that the amendment made by the Finance Act, 2021 will be applicable prospectively and therefore not applicable in the year under consideration. 5. That the appellant craves leave to add, amend or alter any of the grounds of appeal" ITA No. 1629/Del/2022 for AY 2019-20 "1. The Ld. CIT(A) grossly erred both on facts and in law in confirming the intimation u/s 143(1) sent by CPC whereby it processed the return of income of appellant for AY 2019-20 at Rs. 29,13,349/-. 2. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....deposit of ESI & EPF, even when the same was deposited before the due date of filing the income tax return. 2. That the CIT(A) while confirming the order/intimation passed U/s 143(1), has failed to appreciate that amendment in section 36 (1)(va) is being effective from the A.Y.2021-22 and is thus not applicable to the present assessment year viz. 2018-19" ITA No. 1779/Del/2022 for AY 2020-21 "1. That on the facts and in the circumstances of the appellant's case, the learned National Faceless Appeal Centre erred both in facts and in law in out rightly dismissing the appeal without passing a speaking order that disallowance of Rs. 39,04,415/- debited in P&L account on account of crediting employees contribution of PF and ESI in their account after due date as per the said fund under the relevant Act by invoking provisions of section 36(1)(va) of the Income tax Act, 1961 in the intimation issued u/s 143(1) even through such disallowance does not constitute prima facie adjustment under section 143(1)(a). 2. That on the facts and in the circumstances of the appellant's case, the learned National Faceless Appeal Centre (NFAC) erred both in facts and in law in out rightly dismiss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....[2017] 250 Taxman 16 (SC), CIT v. AIMIL Ltd. (2010) 321 ITR 508 (Del), CIT v. M. L. Outsourcing P. Ltd. [ITA No. 10/2016 dated 13.1.2016], Pr. CIT v. Pro Interactive Service (India) Pvt. Ltd. [ITA 983/2018 dated 10.9.2018] and Raj Kumar v. ITD, CPC Bengaluru [2022] 136 taxmann.com 244 (Delhi - Trib.). In any case, since there existed two views, the view in favour of the assessee was required to be adopted. That the Appellant craves leave to add, alter, amend or vary any of the ground either at or before the hearing of the appeal." ITA No. 1725/Del/2022 for AY 2020-21 by Revenue "1. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition/disallowance of Rs. 2,50,49,705/- u/s 36(1)(va) of the Act, being delayed payment to PF and ESI. 2. That the appellant craves leave to add, alter, amend or forego any ground(s) of appeal raised above at the time of hearing." (B) In these appeals, the issue in dispute is regarding addition made by way of adjustment made u/s 143(1) of Income Tax Act ("IT Act" for short); amounting to Rs. 3,54,880/- in the case of Garg Heart Centre & Nursing Home Pvt. Ltd., Rs. 8,67,387/- in the cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... section 43B were prospective in nature applicable with effect from AY 2021-22; and had no application for the relevant Assessment Years, to which these appeals before us pertain. They also contended that, in any case, the issue was beyond the scope of addition by way of adjustment/intimation u/s 143(1) of IT Act. They submitted that the additions, therefore, deserved to be deleted. (C.1.1) We have heard both sides. We have perused the materials on record. Relevant facts are not in dispute. In all these appeals before us, the employees' contribution to ESI/Provident Fund, were deposited by the respective assessees after the specified date prescribed under laws governing ESI/Provident Fund. However, these payments were deposited by the respective assessees well before the date of filing of return of Income Tax prescribed under section 139(1) of Income Tax Act. The aforesaid additions have been made to the income of the respective assessees by way of adjustment and intimation u/s 143(1) of Income Tax Act. (C.1.2) The issue before us is whether, the aforesaid additions by way of adjustments and intimation u/s 143(1) of Income Tax Act in respect of payments of Employee's contribution....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... aforesaid amendments brought to Income Tax Act by Finance Act, 2021; and have taken the view that the amendments are prospective in nature (i.e. applicable from AY 2021-12 onwards) having no application for the period prior to 01.04.2021 i.e. for assessment years prior to AY 2021-22. Even if Revenue does not accept the view, that the aforesaid amendments are prospective in nature having no application for Assessment Years prior to Assessment Year 202122; it is clearly established in the light of aforesaid decisions of Income Tax Appellate Tribunal (ITAT); referred to in this paragraph earlier, that the issue whether the aforesaid amendments are prospective or retrospective, is at least debatable and controversial, on which a view in faour of the assessee (that the aforesaid amendments are prospective) can legitimately exist, even if such a view favorable to the assessee is contested by Revenue. (C.1.3) Let us consider the two alternate views, one in favour of the assessee and the other in favour of Revenue; more closely. If the view in favour of the assessee, that the aforesaid amendments are prospective, is accepted; then the decisions of Hon'ble Delhi High Court, in the cases o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or this view, we also respectfully take support from the order of Agra Bench of ITAT, in the case of Mahadev Cold Storage vs. Jurisdictional Assessing Officer (supra). At the very least, Revenue should have given due consideration to the fact that the issue was highly debatable and controversial. As already discussed earlier, 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. Revenue was clearly in error, in making the aforesaid adjustments u/s 143(1) of Income Tax Act on a debatable and controversial issue. We would also like to make respectful mention of order of Jabalpur Bench of ITAT in the case of Nikhil Mohine vs. DCIT (supra), in which similar view has been taken. (C.1.4) Further, it is also well settled that retrospective amendment cannot be invoked to make addition by way of adjustment and intimation u/s 143(1) of Income Tax Act. This view was taken by the Hon'ble Supreme Court in the case of CIT vs. Hindustan Electro Graphites Ltd. [2000] 243 ITR 0048 (SC), in which the view of Hon'ble Kolkata High Court in the case of Modern Fibotex In....