PCIT Vs Tv Today Network Ltd. (Delhi High Court)
Held that disallowance u/s 36(1)(va) unsustainable as the amount of employees’ contribution to the provident fund deposited before filing of return.
Facts-
AO made disallowance under the head ‘consumption debtors’; disallowance on account of late deposits of employees contribution to provident fund u/s 36(1)(va) of the Act and disallowance under the head of section 14A read with rule 8D.
CIT(A) deleted the disallowances. Being aggrieved, the revenue preferred the appeal before Tribunal. Tribunal also dismissed the appeal.
Conclusion-
With regard to expenses under the head ‘consumption debtors’; it is held that such expenses are consistently allowed by the AO since AY 2004-2005. Hence, the disallowance is deleted on the basis of ‘consistency’ rule.
With regard to disallowance u/s 36(1)(va), that the amendment to Section 36(1)(va), which is ‘for removal of doubts’, cannot be presumed to be retrospective even where such language is used, if it alters or changes the law as it earlier stood. Also held that that in the facts of the case, the due date for depositing the Employees’ contribution to the Provident Fund was 20th April, 2012 and the assessee had deposited the same on 25th April, 2012. There is no dispute that the amount stands deposited before the filing of the return. We, therefore, find that there is no ground for taking a view different from the view consistently held by this court since AIMIL Ltd.
With regard to disallowance u/s 14A, it is held that AO has failed to record satisfaction before invoking provisions of section 14A, which is the condition precedent for making the addition. Accordingly, disallowance deleted.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The present income tax appeal filed by Revenue impugns order dated 29th July, 2021 passed by the Income Tax Appellate Tribunal (‘ITAT’) for the Assessment Year (‘AY’) 2012-13 in ITA No. 5204/Del/2017.
The facts giving rise to the present appeal are as follows:
2. The assessee i.e. the respondent herein, was incorporated on 28th December, 1999 and is engaged in the business of broadcasting, telecasting, relaying, transmitting or distributing audio, video or other programmes and software for television, radio and other media.
3. The assessee filed its Income Tax Return (‘ITR’) for the relevant AY 2012-13 on 29th September, 2012 declaring an income of Rs.25,54,27,410/-.
4. The ITR of the assessee was selected for scrutiny under CASS. Accordingly, a notice under Section 143 (2) of the Income Tax Act, 1961 (‘the Act’) was issued on 16th August, 2013. Further, a notice under Section 142 (1) of the Act along with a questionnaire was issued on 16th April, 2014 and 7th November, 2014 and served upon the assessee to furnish the requisite details. The assessee complied with the aforesaid notice and furnished the requisite details and placed on record the documents sought by the Assessing Officer (‘AO’).
5. Vide the assessment order dated 16th March, 2015, the AO made additions to the extent of Rs.5,45,40,731/- and thus, determined the total income of the assessee at Rs.30,99,68,140/-. The break-up of the disallowances, leading to the additions as, made by the AO is as under :-
