Sircar Securities & Allies Services Pvt. Ltd. Vs ACIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) Delhi Bench delivered a significant judgment in the case of Sircar Securities & Allied Services Pvt. Ltd concerning Assessment Years (AY) 2017-18 and 2019-20. The case dealt with critical issues such as the applicability of Section 43B on unpaid service tax, disallowance of employees’ contributions to Provident Fund/ESI, and late fees under Section 234F of the Income Tax Act, 1961. Shri Deep Agarwal, Advocate from Kolkata represented the assessee in the instant case.
Key Issue and Findings
1. Applicability of Section 43B on Unpaid Service Tax (AY 2017-18)
The primary contention was the addition of ₹79,95,528 under Section 43B on account of unpaid service tax. The tribunal noted:
- The service tax component was not claimed as a deduction by the assessee in the profit and loss account.
- It was merely shown as a liability in the balance sheet, as confirmed by the Tax Audit Report in Form 3CD.
- The Hon’ble Delhi High Court in CIT vs. Noble & Hewitt (I) (P) Ltd and the Bombay High Court in PCIT vs. Tops Security Ltd had ruled similarly, emphasizing that Section 43B applies only when such liabilities are routed through the profit and loss account.
Decision: The tribunal allowed this ground in favor of the assessee, stating that the provisions of Section 43B were inapplicable.
