STEELWEDGE TECHNOLOGIES PRIVATE LIMTIED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(2), HYDERABAD

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ITA 660/HYD/2020Status: DisposedITAT Hyderabad29 November 2021AY 2018-194 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that if the employee's contribution to PF is paid before the due date of filing the return of income under Section 139(1), no disallowance is warranted. Following a coordinate bench decision, the disallowance was set aside.

What were the facts?

The assessee, engaged in software development, claimed a deduction for employee provident fund contributions. The AO disallowed Rs. 8,58,072/- for delayed payment of these contributions. The CIT(A) confirmed the AO's order.

What were the issues?

Whether disallowance of employee's PF contribution is justified when paid before the due date of filing the return of income.

Which sections of the Income-tax Act were involved?

Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”: HYDERABAD

For Appellant: Shri S. Phanindra for Shri AV Raghuram
For Respondent: Shri Rohit Mujumdar
Hearing: 11/10/2021Pronounced: 29/11/2021

A.Y.: 2018-19 Steelwedge Technologies Vs. Dy. Commissioner of Pvt. Ltd., Hyderabad. Income-tax, Circle – 3(2), PAN – AACCV 4015B Hyderabad. (Appellant) (Respondent) Assessee by: Shri S. Phanindra for Shri AV Raghuram Revenue by: Shri Rohit Mujumdar Date of hearing: 11/10/2021 Date of pronouncement: 29/11/2021 O R D E R PER BENCH: This appeal filed by the assessee is directed against CIT(A) - 3, Hyderabad’s order dated 15/09/2020 for AY 2018-19 involving proceedings u/s 154 of the Income Tax Act, 1961.

2.

In this appeal, the assessee has raised a substantial ground that the revenue authorities erred in making disallowance of deduction claimed of Rs. 8,58,072/- towards employees provident fund.

:- 2 -: M/s Steelwedge Technologies Pvt. Ltd., Hyd.

3.

Briefly the facts of the case are that the assessee being a private ltd. company, engaged in the business of software development and services, filed its return of income for the impugned AY 2018-19 on 23/11/2018 admitting a total income of Rs. 7,41,20,200/-. The AO completed the assessment determining the total income of the assessee at Rs. 7,49,78,280/- by making an addition of Rs. 8,58,072/- towards delayed payment of employees contribution.

4.

Against the order of AO, the assessee preferred an appeal before the CIT(A) and filed written submissions before the CIT(A), which were extracted by the CIT(A) in his order at pages 3 to 9. After considering the submissions of the assessee, the CIT(A) confirmed the order of AO.

5.

Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT and submitted that though it paid the employee’s contribution of PF belatedly, the entire amount was paid before the due date of filing the return of income u/s 139(1) of the Act and accordingly, contended that the revenue authorities were not justified in assessing the employee’s contribution to PF as income by ignoring the decisions of various Courts on this issue.

:- 3 -: M/s Steelwedge Technologies Pvt. Ltd., Hyd.

6.

On the other hand, the ld. DR relied on the orders of revenue authorities.

7.

We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. The law is settled on this issue if the assessee has paid the PF and ESI payments before the due date of filing of return income u/s 139(1) of the Act, no disallowance is warranted as held by the coordinate bench of this Tribunal in the case of Vijaya Electricals Ltd., Hyderabad in & 1534/Hyd/2017 for AYs 2013-14 & 2014-15 vide order dated 27/05/2021. Respectfully, following the above decision of the coordinate bench, we set aside the order of the CIT(A) and direct the AO to delete the disallowance of 1,68,212/- made towards employee’s contribution to PF. Accordingly, the grounds raised

by the assessee on this issue are allowed.

8. In the result, appeal of the assessee is allowed in above terms. Pronounced under Rule 34(4) of the ITAT Rules, 1963 on 29/11/2021 Sd/- Sd/- (CHANDRA MOHAN GARG) (L. P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 29th November, 2021. kv

:- 4 -: M/s Steelwedge Technologies Pvt. Ltd., Hyd.

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