SRI ANNAPYRNA ROLLER FLOUR MILL,HYDERABAD vs. INCOME TAX OFFICER, HYDERABAD

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ITA 693/HYD/2020Status: DisposedITAT Hyderabad25 March 2021AY 2018-192 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 the disallowance was wrongly made under Section 154 proceedings as the issue of deductibility of such payments is debatable and has differing High Court opinions. Therefore, the assessee's ground was accepted.

What were the facts?

The assessee claimed deductions for ESI and PF contributions that were deposited after the statutory due date but before the due date for filing the income tax return. The Assessing Officer invoked Section 154 proceedings to disallow these deductions.

What were the issues?

Whether disallowance of ESI/PF contributions deposited after the statutory due date but before the return filing due date is a rectifiable mistake under Section 154.

Which sections of the Income-tax Act were involved?

Section 154,Section 139(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, HYDERABAD ‘ SMC’ BENCH : Hyderabad

Before: SHRI S.S. GODARA

Hearing: 24/03/2021Pronounced: 30/03/2021

Date of Hearing : 24/03/2021 Date of Pronouncement : 30/03/2021 O R D E R This assessee’s appeal for A.Y. 2018-19 arises against the Commissioner of Income Tax (Appeals)-3 “[CIT(A)]” Hyderabad’s order dated 10.09.2020 passed in case no.11126/2019-20 in proceedings u/s 154 of the Income Tax Act, 1961 [in short ‘the Act’].

Heard both the parties. Case file perused.

2.

Coming to the sole issue raised in the instant lis in respect of ESI PF deduction of Rs. 3,62,535/- involving Rs. 3,48,811 and Rs 13,724/-; respectively, not deposited within due date as contemplated under EPF and Misc. Provisions Act, 1952 and ESI Act, 1948; respectively, but before the due date of filing return u/s 139(1) of the Act, I notice that the learned lower authorities have invoked sec.154 jurisdiction. Learned departmental

Sri Annapurna Roller Flour Mill , Hyd. representative fails to dispute that hon’ble high courts have adopted varying opinions regarding correctness of the impugned claim. Take for instance the case law against the assessee i.e. CIT vs Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Guj.) and in favour of assessee CIT vs. AIMIL Ltd. 229 CTR 118 (2010) (Del) Bihar State Warehousing Corpn vs CIT 38 ITR 140 (Pat). It is thus clear that the impugned disallowance issue has been wrongly raised by the Assessing Officer in sec.154 proceedings on a debatable issue as per TS Balram vs. Volkart Brothers (1971) 82 ITR 50 (SC). I therefore accept assessee’s sole substantive ground for this reason alone. Delay of 1 day in filing of the instant appeal is condoned.

This assessee’s appeal is allowed.

Order pronounced in Open Court on 30/03/2021.

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