TMI Blog2022 (3) TMI 1389X X X X Extracts X X X X X X X X Extracts X X X X ..... rospective 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 (3) TMI 2 - SUPREME COURT] in which the view of Hon ble Kolkata High Court in the case of Modern Fibotex India Ltd. Anr.[ 1994 (3) TMI 17 - CALCUTTA HIGH COURT] was approved. Same view was taken by the Hon ble Madhya Pradesh High Court in the case of CIT vs. Satish Traders [ 2000 (9) TMI 51 - MADHYA PRADESH HIGH COURT] We are of the view that the aforesaid additions by way of adjustment and intimation u/s 143(1) of Income Tax Act, were beyond the scope of Section 143(1) of Income Tax Act; and further, that the Ld. CIT(A) erred in law in confirming the aforesaid addition on a debatable and controversial issue - Decided in favour of assessee. - ITA No. 1772/Del/2021 - - - Dated:- 22-3-2022 - Shri Challa Nagendra Prasad, Judicial Member And Shri Anadee Nath Misshra, Accountant Member For the Appellant : Sh. Suresh K. Gupta, CA. For the Respondent : Sh. Jagdish Singh, Sr. DR. ORDER PER ANADEE NATH MISSHRA, AM: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Co-ordinate Bench of ITAT, Delhi ordered Early Hearing of this appeal; accepting the assessee s application for grant of Early Hearing. At the time of hearing before us, the Ld. Authorized Representative ( AR for short) for the assessee submitted that the Ld. CIT(A) should have deleted the additions, instead of directing the Assessing Officer to work out correct quantification of the amount of addition. The Ld. Sr. DR relied upon the impugned appellate order dated 09.09.2020 of the Ld. CIT(A). (D) We have heard both sides. We have perused the materials on record. Relevant facts are not in dispute. Employees contribution to ESI/EPF, totaling the aforesaid amount of Rs.21,63,304/- was deposited by the assessee after the specified date prescribed under laws providing ESI/EPF. However, these payments were deposited by the assessee well before due date of filing of return of Income Tax prescribed u/s 149(1) of Income Tax Act. The aforesaid addition of Rs.21,63,304/- has been made by way of adjustment and intimation u/s 143(1) of Income Tax Act. The present appeal pertains to Assessment Year 2018-19. (D.1) The issue before us is whether, the additions amounting to afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. DCIT (supra); Digiqal Solution Services Pvt. Ltd. vs. Assistant Director of Income Tax (supra) and Gopalakrishna v/s ADIT (supra), the different Benches of Income Tax Appellate Tribunal have, in fact, specifically considered the aforesaid amendments brought to Income Tax Act by Finance Act, 2021; and have taken the view that the amendments are prospective in nature, having no application for the period prior to 01.04.2021. 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 2021-22; 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. (D.1.1) Let us consider the two alternate views, one in favour of the assessee and the other in favour of Revenue; more closely. If th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the aforesaid 16.10.2019, the aforesaid amendments to Section 36(1)(va) and Section 43B of Income Tax Act had not been enacted; but orders of Hon ble Delhi High Court (the jurisdictional High Court) in favour of assessee and against Revenue on this issue in aforesaid cases of CIT vs. AIMIL Ltd. (supra); and CIT vs. P.M. Electronics Ltd. (supra) were available. Accordingly, the aforesaid amount of Rs.21,63,304/- could not have been added to assessee s income as on 16.10.2019 in the light of these binding precedents of the Hon ble Delhi Court in favour of the assessee. Therefore, we are of the view that the aforesaid adjustments made by Revenue on 16.10.2019, whereby the aforesaid amount of Rs.21,63,304/- were unfair, unjust, and bad in law. For this view, we 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) did err in law, in not deleting this addition. (E) In the light of the foregoing conclusions in paragraph (D.2.1) of this order, we are of the view that the aforesaid additions of Rs.21,63,304/- by way of adjustment and intimation u/s 143(1) of Income Tax Act were beyond the scope of Section 143(1) of Income Tax Act; and further, that the Ld. CIT(A) erred in law in confirming the aforesaid addition on a debatable and controversial issue. Accordingly, we set aside the impugned appellate order dated 09.09.2020 of the Ld. CIT(A), and direct the Assessing Officer to delete the aforesaid addition of Rs.21,63,304/- (E.1) By way of abundant caution, we hereby clarify that we have not expressed any view in this order, on whether the aforesaid amendments brought in by Finance Act, 2021 [whereby Explanation-2 was inserted in Section 36(1)(va) of Income Tax Act and Explanation-5 was inserted in Section 43B of Income Tax Act] are prospective or retrospective. In the light of our decision in foregoing paragraph (E) of this order; this issue is merely academic in nature; hence not decided. (F) The second issue in this appeal is regarding the addition of Rs.1,27,329/-. On p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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