IN THE INCOME TAX APPELLATE TRIBUNAL DELHI
BENCH ‘SMC’, NEW DELHI

BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER

(THROUGH VIDEO CONFERENCING)

ITA No.850/Del/2021
(Assessment Year : 2018-19)

Chatru Mal Garg Vs. ACIT
Plot No.98, Sector – 25, Circle – 1
Faridabad, Faridabad
Haryana - 121005

PAN : ABZPG 7929 C (RESPONDENT)
(APPELLANT)

Assessee by Shri Alok Kumar Gupta, C.A.
Revenue by Shri R. K. Gupta, Sr. D.R.

Date of hearing: 07.10.2021
Date of Pronouncement: 29.10.2021

ORDER

PER ANIL CHATURVEDI, AM:

This appeal filed by the assessee is directed against the
order dated 18.05.2021 of the Commissioner of Income Tax
(Appeals)-NFAC, Delhi relating to Assessment Year 2018-19.

2. The relevant facts as culled from the material on records are
as under :
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3. Assessee is an individual who runs a factory. Assessee filed

his return of income for A.Y. 2018-19 on 30.09.2018 declaring

total income at Rs.47,17,380/-. CPC Bangalore vide intimation

issued u/s 143(1) of the Act dated 29.04.2019 determined the

total income at Rs.49,55,210/- by making disallowance of

Rs.2,37,823/- u/s 36(1)(va) of the Act on account of non-deposit

of the employees’ contribution towards PF/ESIC before the

prescribed due dates. Aggrieved by the order of AO, assessee

carried the matter before the CIT(A) who by considering the

amendment made by finance bill 2021 upheld the order of AO.

Aggrieved by the order of CIT(A), assessee is now in appeal and

has raised the following grounds:

1. The Ld CIT(A) erred in confirming the addition of Rs 25263
made by the Id Assessing Officer representing delay in
remittance of employee contribution towards ESI u/s 143(1)
of the Income Tax Act 1961,ignoring the fact that such
addition was not attracted under the said section.

2. The Ld CIT(A) erred in confirming the addition of Rs 212560
made by the Id Assessing Officer representing delay in
remittance of employee contribution towards PF u/s 143(1)
of the Income Tax Act 1961,ignoring the fact that such
addition was not attracted under the said section.

3. The Ld CIT(A) erred in confirming the addition of Rs 25263
made by the Id Assessing Officer representing delay in
remittance of employee contribution towards ESI in
contravention to the applicable law and the decisions of the
jurisdictional courts.

4. The Ld CIT(A) erred in confirming the addition of Rs 212560
made by the Ld Assessing Officer representing delay in
remittance of employee contribution towards PF in
contravention to the applicable law and the decisions of the
jurisdictional courts.
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5. The Ld CIT(A) erred in confirming the addition of Rs 25263
made by the Ld Assessing Officer representing delay in
remittance of employee contribution towards ESI relying on
the amendment in section 43B and 36(1)(va) of the Income
Tax Act 1961 brought in vide Finance Act 2021.

6. The Ld CIT(A) erred in confirming the addition of Rs 212560
made by the Id Assessing Officer representing delay in
remittance of employee contribution towards PF relying on
the amendment in section 43 B and 36(1)(va) of the Income
Tax Act 1961 brought in vide Finance Act 2021.

7. The Ld Assessing Officer erred in rejecting the principle if
two views are possible, one in favour of the assessee should
be adopted keeping in view the facts and circumstances of
the case and he ought to have deleted the addition of Rs
25263 and Rs 212560 respectively for late deposit of
employees contribution to ESI &PF.

8. The appellant craves leave to add, amend, delete and modify
any grounds of appeal before/during the hearing of the
appeal and all the above grounds are without prejudice to
each other.

4. At the outset, Learned AR submitted that though the

assessee has various grounds but the sole controversy is with
respect to disallowance of delayed deposit of PF/ESIC

contribution.

5. Before me, Learned AR reiterated the submissions made
before the CIT(A) and pointed to the chart of payment reproduced
by the CIT(A) under para 4.15 of the order and from that table he

pointed out that though there has been slight delay in deposit of
the employees’ contribution of PF/ESIC but the fact remains that

the entire contributions received by the assessee have been
deposited with the appropriate authorities by the assessee before
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the filing of return of income. He therefore submitted that in such
a situation no disallowance under section 36(1)(va) of the Act is
called for and for this preposition, he placed reliance on the
decision in the case of CIT vs. AIMIL Ltd. [2010] 188 Taxman
265 (Delhi). He also placed reliance on the decision rendered by
the Hon’ble Punjab and Haryana Court in the case of CIT vs.
Mark Auto Industires Ltd. reported in 358 ITR 43 (P and H)
and the decision in the case of CIT vs. Hemla Embroidery Mills
(P) Ltd., 2014) 366 ITR 167 (P&H). He further submitted that
CIT(A) has erred in relying on the amendment made by Finance
Bill 2021. He submitted that the memorandum to the Finance Bill
clearly states that the amendment made is applicable from A.Y.
2021-2022. He submitted that the Delhi Tribunal in the case of
Indian Geotechnical Services in ITA No.622/DEL/2018 order
dated 27.08.2021 after considering the amendment made by
Finance Bill 2021 has decided the issue in assessee’s favour. He
pointed to para 13 & 14 of the aforesaid order. He also placed
reliance on the decision rendered by Delhi Tribunal in the case of
Azamgarh Steel & Power Pvt. Ltd. in ITA No.1626/Del/2020
dated 31.05.2021. He therefore submitted that no disallowance
is called for in view of the various decisions rendered by the Co-
ordinate Benches of Tribunal and Hon’ble Punjab and Haryana
High Court.

6. Learned DR on the other hand supported the order of lower
authorities and further submitted that Explanation 2 inserted in
Finance Act 2021 was for removal of doubts. He also placed
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reliance on the decision of Delhi ITAT in the case of Vedvan
Consultants Pvt. Ltd. in ITA No.1312/Del/2020 order dated
26.08.2021.

7. I have heard the rival submissions and perused the
materials on record. The issue in the present ground is with
respect to disallowance under section 36(1)(va) of the Act. It is an
undisputed fact that there has been slight delay in the deposit of
employees’ contribution of PF and ESI by the assessee and the
contribution have been deposited beyond the due date prescribed
by the relevant authorities but at the same time it is also a fact
that the amounts have been deposited with the appropriate
authorities by the assessee before filing the return of income for
the relevant assessment year. I find that Hon’ble Delhi High Court
in the case of CIT vs. AIMIL Ltd. (supra) has held that no
disallowance under section 36(1)(va) of the Act is called for when
the amounts are deposited before filing the return of income.
Similar view has also been taken by the Hon’ble Punjab &
Haryana High Court in the case of CIT vs. Hemla Embroidery
Mills (P) Ltd (supra) and Indian Geotechnical Services (supra).
As far as the applicability of amendment made by Finance Act
2021 is concerned, I find that the Co-ordinate Bench of Tribunal
in the case of Indian Geotechnical Services (supra) has held
that amendment made by Finance Bill 2021 shall take effect from
1st April 2021 and will accordingly apply to A.Y. 2021-11 and
subsequent years. In the present case assessment year involved
is 2018-19 and therefore following the aforesaid decision in the
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case of Indian Geotechnical Services (supra), I am of the view
that the amended provisions would have no application to the
case under consideration. Before me, Learned DR has relied on
the decision of Co-ordinate Bench of Tribunal in the case of
Vedvan Consultants Pvt. Ltd. (supra). It is settled law that when
two judgments are available giving different views then the
judgment which is in favour of the assessee shall apply as held in
case of Vegetable Products Ltd. 82 ITR 192 by the Hon’ble
Supreme Court. I therefore following the decision of High Courts
cited hereinabove and the decision of the Co-ordinate Bench of
Tribunal, I am of the view that no addition u/s 36(1)(va) of the Act
is called for in the present case. Therefore I direct the AO to delete
the addition. Thus the ground of assessee is allowed.

8. In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 29.10.2021

Date:- 29.10.2021 Sd/-
(ANIL CHATURVEDI)
PY* ACCOUNTANT MEMBER

Copy forwarded to: ASSISTANT REGISTRAR
ITAT NEW DELHI
1. Appellant

2. Respondent

3. CIT

4. CIT(Appeals)

5. DR: ITAT