TMI Blog2023 (9) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... t on due dates in the form of challans, bank statements, correspondence with PF authorities were not furnished by the assessee before the lower authorities and therefore there is no finding of the lower authorities on the aforesaid contentions by the AO. AO had on the basis of the final date of payment as reported in the Tax Audit Report proceeded to disallow the payment and made the additions. We further find that CBDT vide Circular No.261 dated 8th Aug 1979 has held that if a cheque or draft tendered in payment of Government dues and accepted under the provisions of rule is honoured on presentation, the payment is deemed to have been made on the date on which it was handed over to the Government bankers. We restore the issue back to the file of AO to decide the issue afresh after considering the submissions of the assessee. If after examination of the additional evidences and the assessee s submissions, the assessee s contentions of the initial deposits being made before the due date prescribed by PF authorities and contention of the payment being reversed on account of the glitches at the end of the EPFO is found correct, then the AO shall delete such additions. Denial of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal purposes. - Sh. Anil Chaturvedi, Accountant Member And Sh. Chandra Mohan Garg, Judicial Member For the Assessee : Shri K. M. Gupta, Adv., Shri Rishabh Malhotra, A.R. And Shri Bhavya Gupta, C.A. For the Revenue : Shri Amaresh Singh, CIT-D.R. ORDER PER ANIL CHATURVEDI, AM : This appeal filed by the Assessee is directed against the order of the Ld. Assistant Commissioner of Income Tax, Delhi, dated 29.04.2022 in DIN And Order No. ITBA/AST/S/143(3)/2022-23/1042911888(1), relating to the A.Y. 2018-19 passed under section 143(3) read with Section 144C(13) of the I.T. Act, 1961. 2. Briefly stated facts of the case are that the assessee is a company stated to be engaged in provision of Software Development, ITES and Research development services to its AEs, wherein it acts as captive service provider. Assessee electronically filed its original return of income for A.Y. 2018-19 on 29.04.2022 declaring total income at Rs. 94,69,38,530/-. The case was selected for scrutiny and accordingly notices u/s 143(2) 142(1) were issued and served on the assessee. AO noticed that assessee had entered into International Transactions with its Associates Enterprises ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... August 2017-and the Appellant had to make that payment again. 2.2 The Ld. AO/ Ld. DRP erred in not appreciating the fact that the Appellant had made genuine attempts to deposit the contributions to PF within the due date specified under the PF regulations and the delay was only due to reasons beyond the Appellant s control. 2.3 The Ld. AO/ Ld. DRP erred in concluding that the decisions relied upon by the Appellant in respect of the technical glitches are with regards to the delay in filing withholding tax returns without considering the principles drawn from the case laws. 2.4 The Ld. AO/ Ld. DRP erred in not appreciating the principle laid down by the Hon'ble jurisdictional High Court of Delhi in the case of Commissioner of Income-tax v. AIMIL Limited (321 ITR 508) and various other judicial precedents wherein it has been held that employees' contribution to PF can be claimed as an expense in the year in which it is incurred if the actual payment is made before the due date of filing the ROI under section 139 of the Act, and thereby ignoring the principle of judicial discipline. 2.5 The Ld. AO/ Ld. DRP erred in incorrectly interpreting the clarification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,84,695/- received from Employees towards PF and any other welfare fund was deposited by the assessee beyond the prescribed due dates. The assessee was asked to explain as to why the employees contribution paid beyond the due dates not be disallowed. Before AO assessee inter alia submitted that due to technical glitches on the Employees Provident Fund Organizations (EPFO) online portal, the assessee could not deposit the employees contribution towards PF on the due dates and to support its contentions, assessee also filed copies of the letter addressed to the Commissioner, Employees Provident Fund Organization. The submissions of the assessee was not found acceptable to AO. AO thereafter, by invoking the provisions of Section 36(1)(va) r.w.s 2(24)(x) held that the delayed contribution of employees share of PF and other funds is not an allowable deduction. AO after placing reliance on the amendments made by Finance Bill, 2021, made the additions. When the matter was carried before the DRP, DRP upheld the action of AO. Consequent to the direction of DRP, AO made the addition. Aggrieved by the order of AO, assessee is now before us. 5. Before us, Learned AR reiterated the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amounts were deposited before the filing of return of income, no disallowance was warranted in the light of the decision rendered in the case of AIMIL Ltd. (321 ITR 508). He submitted that due to change in circumstances on account of the decision of Hon ble Apex Court, the additional evidences are submitted, which may be taken on record. He therefore, submitted that the addition on account of PF delayed be deleted. Learned AR thereafter fairly conceded that out of the total disallowance made by AO, with respect to the amount of Rs. 1,71,351/- there was a delay on the part of the assessee in depositing the aforesaid employees contribution and therefore in view of the decision of Hon ble Apex Court in the case of Checkmate Services Pvt. Ltd. and others vs. CIT others (2022) 448 ITR 518 (SC) the amount of Rs. 1,71,351/- be disallowed and the balance addition be deleted. 6. Learned DR on the other hand supported the order of lower authorities and objected to the additional evidences filed but however stated that if the additional evidences are admitted, the same be sent back to lower authorities for necessary verification. 7. We have heard the rival submissions and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective authorities, the amounts were reversed by the bank, then the assessee cannot be penalized with the addition on account of delayed deposits. We however find that the documents evidencing the payment on due dates in the form of challans, bank statements, correspondence with PF authorities were not furnished by the assessee before the lower authorities and therefore there is no finding of the lower authorities on the aforesaid contentions by the AO. AO had on the basis of the final date of payment as reported in the Tax Audit Report proceeded to disallow the payment and made the additions. We further find that CBDT vide Circular No.261 dated 8th Aug 1979 has held that if a cheque or draft tendered in payment of Government dues and accepted under the provisions of rule is honoured on presentation, the payment is deemed to have been made on the date on which it was handed over to the Government bankers. We note that though the aforesaid circular is with respect to date of receipt of cheque tendered for payment of direct taxes but however are of the view that the principle stated in the aforesaid circular will be applicable to the present facts also. Considering the totality of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not yet been resolved by the AO. Considering the aforesaid factual position, we direct the AO to process the aforesaid application on the issue at the earliest and decide the issue in accordance with law. The assessee is also directed to promptly furnish the necessary details called for by the AO to process the application. Thus the ground of assessee is allowed for statistical purposes. 13. Ground No.4 is with respect to the addition made on account of interest of refund of income tax amounting to Rs. 2,42,29,899/-. 14. Before us, Learned AR submitted that during the year under consideration, assessee had accrued interest amounting to Rs. 2,42,47,824/- on income tax refund on estimate basis. Since the amount was not received by the assessee during the year under consideration, the assessee had reduced the said amount from the income under the head income from other sources . He submitted that CBDT has issued certain Income Computation and Disclosure Standards ( ICDS ), in exercise of the powers conferred by Section 145(2) of the Act which provides a framework for computation of taxable income of all assesses in relation to the income under heads Profits and Gains under B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in that year and taxed in that year. We, therefore, direct the AO to delete the addition of interest on refund being taxed twice. Thus the ground of assessee is allowed. 17. Ground No.5 is with respect to not granting credit of self assessment tax amounting to Rs. 8,22,00,957/-. 18. Before us, it is the contention of the assessee that assessee had deposited Rs. 8,22,00,957/- as self-assessment tax but its credit has not been granted to the assessee and for which assessee has also filed rectification application on 13.05.2022 but the same is yet to be disposed of by the AO. It is the prayer of the assessee that AO be directed to grant the credit of TDS. The aforesaid contentions of Learned AR has not been controverted by Learned DR. 19. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to not granting credit of self-assessment tax. It is the contention of the assessee that assessee had paid self assessment tax but its credit has not been granted while computing the tax payable and for which assessee has also made necessary application before AO which is yet to be disposed of by AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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