MACK SPRINGS PVT. LTD,MUMBAI vs. ADIT CPC, BANGALLURU

This is an appeal preferred by the assessee company against the order of the Ld. Commissioner of Income Tax (Appeals)/(NFAC), Delhi dated 28.07.2021 for assessment year 2019-20.

It is noted that this appeal was initially disposed off by this Tribunal on 09.05.2022 by allowing the appeal of the assessee. However, the same have been recalled by this Tribunal on 13.04.2023 in the light of the decision of the Hon’ble Supreme Court in the case of M/s. Checkmate Services Pvt. Ltd. (448 ITR 518) (SC). 3. Brief facts are that the assessee had filed the return of income for AY 2019-20 which was processed u/s 143(1) of the Act raising a demand of Rs.2,35,771/- by making an addition/disallowance of Rs.8,58,426/- u/s 36(1)(va) of the Income Tax Act, 1961 (hereinafter “the Act”) on the ground that the Employee’s Contributions to Provident Fund was remitted by assessee after the due dates prescribed 2 A.Y. 2019-20 Mack Spirings Pvt. Ltd. in the respective Act i.e. PF/ESIC Acts. On appeal, the Ld. CIT(A) confirmed the order of the AO. Aggrieved, the assessee is before us. 3. At the outset, the limited prayer of the Ld. AR of the assessee is that the CPC ought to have disallowed only Rs.7,07,735/- in place of Rs.8,58,426/-. The break-up of the remittance are given as under: - Nature of Fund Sum received Due Date for The actual The actual date from Employees payment amount paid of payment to the concerned authorities PF 81,143/- 15.06.2018 1,70,069 22.06.2018 PF 84,810 15.07.2028 1,77,755 21.07.2018 PF 86,526 15.09.2018 1,81,345 24.09.2017 PF 85,712 15.12.2018 1,78,566 26.12.2018 Total 3,38,191 7,07,735 4. Drawing our attention to page no. 3 and 4 of the impugned order wherein the details of PF/ESIC paid as per the Form-3CA/3CD have been reproduced, the Ld. AR submitted that out of the aforesaid remittance only Rs.7,07,735/- could have been disallowed and not Rs.8,58,426/-. Therefore, she prayed that the aforesaid factual aspects may be verified by the AO and if it is correct, the disallowance may be restricted to Rs.7,07,735/-. 5. Per contra, the Ld. DR, could not raise any objection. 6. After hearing both the parties, first of all we uphold the impugned action of Ld CIT(A) in the light of the decision of the Hon’ble Supreme Court in the case of M/s. Checkmate Services Pvt. Ltd. (448 ITR 518) (SC). However, we note that the limited prayer of the Ld. AR of the assessee is that the CPC ought to have disallowed only Rs.7,07,735/- in place of Rs.8,58,426/- u/s 36(1)(va) of the Act. According to Ld. AR, from a perusal of the amounts remitted (i.e. Employee’s contribution to PF/ESIC Act) it can be seen that assessee had deposited Employee’s contribution towards PF/ESIC on or before 3 A.Y. 2019-20 Mack Spirings Pvt. Ltd. due dates warranting disallowance only to tune of Rs 7,07,735/- and not Rs 8,58,426/-. So according to her, the CPC erred in disallowing Rs.8,58,426/- in place of Rs.7,07,735/-. Since this issue need verification on the part of AO, we set aside the impugned order of the Ld. CIT(A) and remand the issue back to the file of the AO for the limited purpose of verifying as to whether the disallowance as per law should be restricted to Rs.7,07,735/- as against Rs.8,58,426/- made by the CPC. The AO may verify the same and assessee be given opportunity to explain the aforesaid contention and thereafter AO to pass order in accordance to law.