TMI Blog2022 (4) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Sri.Shehnawaz ul Rahaman, Addl.CIT-DR ORDER PER PADMAVATHY S, AM : This appeal at the instance of the assessee is directed against the CIT(A) s order dated 29.12.2021. The relevant assessment year is 2018- 2019. 2. The grounds raised read as follows:- 1. The Honourable Commissioner of Income Tax (Appeals) (hereinafter referred as `CIT(A) for brevity) has erred in passing the order without giving an opportunity of hearing to the appellant and therefore the order is bad in law. 2. The CIT(A) has erred in dismissing the appeal filed by the appellant on the ground that reason for condonation is not acceptable without appreciating the fact that the appellant has bonafide and reasonable cause for the delay in filing appeal. 3. The CIT(A) has erred in confirming the action of Assessing Officer (AO) in treating employee s contribution to provident fund and ESI amounting to ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. 4. However, the CIT(A) rejected the delay condonation petition filed by the assessee relying on various decisions held that there is no sufficient cause for inaction on the part of the assessee. The CIT(A) went ahead and dismissed the appeal of the assessee, without going into the merits of the issue raised in the appeal. 5. Aggrieved by the order of the CIT(A) the assessee is in appeal before the Tribunal. 6. The Ld AR submitted reiterated the submissions made before the CIT(A). The Ld AR also submitted that the normal operations of the assessee were affected by Covid-19 situation and the assessee was functioning with minimum staff which also caused delay in taking timely action in this regard. The Ld AR submitted there is no intentional delay on the 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) Every day s delay must be explained does not mean that a pedantic approach should be made. Why not every hour s delay, every second s delay? The doctrine must be applied in a rational, common sense and pragmatic manner. (4) 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 in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM ) condoned more than six hundred days delay. It is pertinent to mention herein that the view taken by the present author in that case was overruled by the Third Member. 13. The Madras High Court in the case of Sreenivas Charitable Trust (supra) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression sufficient cause the principle of advancing substantial justice is of prime importance and the expression sufficient cause 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 purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, when this Tribunal is empowered and capable of removing injustice, in our opinion, the delay of 508 days has to be condoned and the appeal of the assessee has to be admitted and disposed of on merits. In view of the above, we condone the delay of 508 days in filing the appeal and admit the appeal for adjudication . 11. We respectfully follow the principles laid down by the decision of the coordinate bench that in construing the expression sufficient cause the principle of advancing substantial justice is of prime importance and the expression sufficient cause should receive a liberal construction. Therefore in our considered view assessee s bona fide belief based on the fact that since 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/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arat High Court in the case of CIT v. Gujarat State Road Transport Corporation reported in 366 ITR 170 (Guj.). The Hon'ble High Court was considering following substantial question of law:- Whether in law, the Tribunal was justified in affirming the finding of Assessing Officer in denying the appellant's claim of deductions of the employees contribution to PF/ESI alleging that the payment was not made by the appellant in accordance with the provisions u/s 36[1][va] of the I.T.Act? 7.1 In deciding the above substantial question of law, the Hon'ble High Court rendered the following findings:- 20. Paragraph-38 of the PF Scheme provides for Mode of 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re and not retrospective. (i) Dhabriya Polywood Limited v. ACIT reported in (2021) 63 CCH 0030 Jaipur Trib. (ii) NCC Limited v. ACIT reported in (2021) 63 CCH 0060 Hyd Tribunal. (iii) Indian Geotechnical Services v. ACIT in ITA No.622/Del/ 2018 (order dated 27.08.2021). (iv) M/s.Jana Urban Services for Transformation Private Limited v. DCIT in ITA No.307/Bang/2021 (order dated 11th October, 2021) 7.3 In view of the aforesaid reasoning and the judicial pronouncements cited supra, the amendment by Finance Act, 2021 to Sec.36[1][va] and 43B of the Act will not have application to relevant assessment year, namely A.Y. 2019- 2020. Accordingly, we direct the A.O. to grant deduction in respect of employees' contribution to ESI since the assessee has made payment before the due date of filing of the return of income u/s 139(1) of the I.T.Act, It is ordered accordingly. 8.1 Therefore, the amended provisions of section 43B as well as 36(1)(va) of the I.T.Act are not applicable for the assessment years under consideration. By following the binding decision of the Hon ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT (supra), the emp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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