ARIHANT AUTOMOBILE,JABALPUR vs. INCOME TAX OFFICER, WARD 1(2), JABALPUR

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ITA 28/JAB/2023Status: DisposedITAT Jabalpur21 September 2023AY 2018-195 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal upheld the disallowance of employee PF contribution, citing the Supreme Court judgment. However, it remanded the issue of bonus and leave encashment disallowance to the Assessing Officer for verification of payment dates.

What were the facts?

The assessee's return for AY 2018-19 was processed with disallowances for delayed employee PF contribution and payments for bonus and leave encashment. The CIT(A) upheld these disallowances, relying on the Supreme Court's decision in Checkmate Service Pvt Ltd.

What were the issues?

Whether delayed payment of employee's contribution to PF is disallowable as per Supreme Court ruling, and whether bonus and leave encashment payments made before the return filing due date are deductible.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, JABALPUR

Hearing: 20.09.2023

O R D E R

PER PAVAN KUMAR GADALE JM:

1.

The assessee has filed the appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi / CIT(A) passed u/s 143(1)and 250 of the Act. The assessee has raised the following grounds of appeal:

1. The Learned CIT erred in relating disallowance of employees contribution of Rs. 26545/- by the ITO though the matter referred to the period before the judgement of supreme court.

Arihant Automobiles., Jabalpur. - 2 - 2.The learned CIT erred in retaining disallowance of Rs. 70,000/- relating to payment of bonus Rs. 30,000/- & leave encashment of Rs. 40,000/- although that was deposited before filling of Income Tax return. (3) The appellate craves leave to amend, alter or delete any of the above ground of appeal 2. The brief facts of the case are that, the assessee is engaged in the business of automobiles. The assessee has filed the return of income for the A.Y 2018-19 disclosing a a total income of Rs.2,29,400/- and the return of income was processed with disallowance u/s 36(1)(va) of the Act of Rs.26,545/- being employees contribution towards PF not paid within the due date of respective Act and Rs disallowance of leave encashment and bonus of Rs.70,000/- and the total income was determined at Rs 3,25,958/- U/sec 143(1) of the Act.

3.

Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) considered the submissions of the assessee, grounds of appeal, findings of the AO and relied on the decision of the Hon’ble Supreme Court in the case of Checkmate Service Pvt Ltd Vs CIT-1 in Civil Appeal No. 2833 of 2016 dated 12 -10- 2022 and sustained the disallowance of PF and similarly confirmed the action of the A.O.in disallowance of leave encashment

Arihant Automobiles., Jabalpur. - 3 - and bonus of Rs.70,000/- as no evidence of payment was filed and has dismissed the assessee appeal, Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Honble Tribunal.

4.

At the time of hearing, none appeared on behalf of the assessee and the Ld. DR supported the order of the CIT(A).

5.

We heard the Ld. DR submissions and perused the material on record. The disputed issues challenged by the assessee that the CIT(A) has erred in confirming the addition u/s 36(1)(va) of the Act in respect of delayed payment of employees contribution towards PF. We found the CIT(A) has considered the decision of Hon’ble Supreme Court in the case of Checkmate Service Pvt Ltd and CIT, in Civil Appeal No. 2833 of 2016 dated 12 Oct 2022 and has dealt on the facts at Para 4 of the order and confirmed the disallowance and we do not find infirmity in the order of the CIT(A) on this disputed issue and uphold the same and dismiss the ground of appeal. On the second disputed issue of disallowance of leave encashment and bonus of Rs.70,000/-.The assessee has submitted the copy of the cash book, in particular the date of payment of the said amount on 25-09-2018 before due date of filling of return

Arihant Automobiles., Jabalpur. - 4 - of income with the appellate authorities on 13-04-2022 in reply to notice dated 5-04-2022.But these facts are not referred in the CIT(A).Hence, for limited purpose we restore the disputed issue along with the evidences to the file of the Assessing Officer to verify and examine the facts and decide on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. Accordingly, we allow this ground of appeal of the assessee for statistical purposes.

6.

In the result, the appeal filed by the assessee is partly allowed for statistical purpose.

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