What did the Tribunal hold?

The Tribunal noted the assessee's contention of a mistake in the amount mentioned before the CIT(A) and that this requires verification. Therefore, the case was set aside and restored to the Assessing Officer for verification and decision.

The assessee's appeal concerns the disallowance of ESI and EPF expenses. The assessee claims a mistake was made in the appeal filed before the CIT(A) regarding the amount of income, and the disallowance pertains to a different assessment year.

What were the issues?

Whether the disallowance of ESI/EPF expenses was justified, considering the assessee's claim of a clerical error in the appeal filed before the CIT(A).

Kuchhal Udyog, South Delhi vs ACIT | ITAT Delhi 2023

Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI

Before: SHRI KUL BHARAT

For Appellant: Shri Sanjay Mehra, CA

For Respondent: Shri Om parkash, Sr. DR

Hearing: 16.01.2023Pronounced: 16.01.2023

O R D E R PER KUL BHARAT, JM:

This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 28.06,2022, pertaining to the assessment year 2019-20. The assessee has raised following grounds of appeal:

“1. Adhoc disallowance of expenss of Rs. 145375/- (ESI and EPF expenses)

The ld. CIT(A) erred in law, in facts and circumstances of the case and erred in disallowing amount of Rs. 145375/- for AY 2019-20 because such amount does not belong to expenses for ESI and EPF for AY 2019- 2020.

Erred in filing form 35. The appellant (Uchhal Udyog) fortuitously mentioned wrong amount in form 35 at the time of filing of appeal. The amount mentioned belongs to AY 2018-19.

5. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”

2. At the time of hearing the learned Authorized Representative, appearing on behalf of the assessee, submitted that the issue involved in this appeal is relating to disallowance of ESI/EPF expenses. He contend that the Assessing Officer had made addition by making adjustment u/s 143(1) of the Income-tax Act, 1961 (in short “the Act”) of Rs. 31,.437/- and had raised a demand of Rs. 4,260/-. He contended that the assessee by mistake, while filing the appeal before the learned CIT(Appeals) had wrongly mentioned income at Rs. 6,74,480/- instead of Rs. 5,29,105/- and the addition/ income thus arose to Rs. 1,08,890/-.

3. On the other hand, learned DR contended that so disallowance of ESI & EPF expenditure is concerned the same is now stands decided by the Hon’ble Supreme Court and has been followed by the various Division Benches of the deserves to be upheld.

4. I have heard the rival submissions. It is the contention of the assessee that before the learned CIT(Appeals) there was wrongly mention of sum of Rs. 6,74,480/- in place of Rs. 5,29,105/-. This fact requires verification at the end of the Assessing Officer. I, therefore, set aside the impugned order and restore the issue to the Assessing Officer to verify the correct amount and decide in accordance with law. Grounds raised by the assessee are allowed for statistical purposes.

Appeal of the assessee is allowed for statistical purposes.

Order pronounced in open court on 16.01.2023.

KUCHHAL UDYOG,SOUTH DELHI vs. ACIT, CIRCLE-42(1), NEW DELHI

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