Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI ABY T VARKEY, JM & SHRI GAGAN GOYAL, AM
आदेश / O R D E R
Per Gagan Goyal, Accountant Member:
This appeal by the assessee was adjudicated on 10.08.2022 however same has been recalled by way of the order dated 26.06.2023 in Miscellaneous Application No. 251/Mum/2023 and therefore, both the parties were again heard on the ground raised in the appeal. The relevant grounds of appeal are reproduced as under:
M/s Kalyaniwalla & Mistry LLP 1. The Ld. CIT(A) erred in confirming the disallowance of the contribution to provident fund amounting to Rs.2,82,895/- under section 36(1)(va) of the Act solely based on the tax audit report uploaded by the Tax Auditor.
2. Both the lower authorities erred in deciding a debatable issue in proceedings under section 143(1) of the Act.
3. Without prejudice to the grounds 1 and 2, the Ld. CIT(A) erred in confirming the disallowance u/s 36(1)(va) of the Act, even though, as per the disclosure in Tax Audit report, the amount was credited to the fund before the end of the relevant financial year.
4. The Ld. CIT(A) erred in ignoring the fact that the amendment made to section 36(1)(va) is prospective and applies w.e.f. April 1, 2021.
The Ld. CIT(A) erred in confirming levy of interest. The appellant denies its liability to any interest under section 234B & 234C of the Act.
We have heard rival submission of the parties on the issue-in-dispute and perused the relevant material on record. The issue in dispute involved in the appeal is in respect of disallowance of employee’s contribution to PF/ESI paid after the due date under the relevant enactment. The Ld. Computerized Processing Centre (CPC) made adjustment for the said disallowance in the order u/s 143(1) of the Act on the basis of the reporting by the assessee in the tax audit report filed along with the return of income.
Before us, it was claimed by the assessee that since disallowance of employee’s contribution to PF/ESI was earlier being allowed by the Hon’ble Jurisdictional High Court and therefore, disallowance was a debatable nature and it should not be adjustment u/s 143(1) of the Act.
3.1 We find that the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra) has held that employees contribution to PF/ESI paid after the due date under the relevant enactment is not eligible for deduction u/s 36(1)(va) of the Act. This interpretation of the provision of the law by the M/s Kalyaniwalla & Mistry LLP Hon’ble Supreme Court is effective, since its inception; therefore, issue is no longer debatable. In terms of section 143(1) (a) (ii) of the Act, any incorrect claim which is apparent from any information the return of income, is liable to be adjusted u/s 143(1) of the Act. Since in the case, the claim of employee’s contribution paid to PF/ESI after due date under the relevant Act is apparent from the information in tax audit report filed alongwith the return of income and thus, the claim is incorrect. The Ld. CIT (A) is correct in upholding the order of the Ld. CPC in making the said adjustment u/s 143(1) of the Act. Accordingly, we uphold the same. The grounds of appeal of the assessee are accordingly dismissed.
3.3 On merits, we dismiss the appeal of the assessee with a rider that jurisdictional AO is to verify the contention of the assessee as mentioned in para 3.2 above and allow the relevant claim of the assessee considering the Circular of EPFO (supra).
In the result, the appeal filed by the assessee is dismissed in above terms.
Order pronounced in the open court on 26.06.2023.