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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE JM:
The assessee has filed the appeal against the National Faceless Appeal Centre (NFAC), Delhi/CIT(A) passed U/sec 250 of the Act.
The Hon’ble Tribunal in the Miscellaneous application filed by the Revenue in MA No.368 /Mum/2022 dated 31.03.2023 has recalled the Hon’ble Tribunal order dated 13.05.2022 considering the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd vide civil application No. 2833 of Mr. Narayana Nippanin Rao, Mumbai. - 2 - 2016 dated 12.10.2022 where in employers have to deposit employees contribution towards ESIC and PF on or before the due date as prescribed in the respective Act. Now the appeal is posted for hearing before us.
The assessee has filed the appeal against the order of National Faceless Appeal Centre (NFAC), Delhi / CIT(A) passed u/s 250 of the Act. The assessee has raised the following grounds of appeal:
1. The Ld. Commissioner, Appeals ("CIT-A") was not justified in confirming the addition of Rs 9,29,886 made under section 36(1)(va) read with section 2(24)(x) in the intimation issued under section 143(1)/154 by the Ld. Deputy Commissioner of Income Tax, CPC, Bangalore ("AO") on account of delay in depositing employees' contribution towards EPF/ESIC, ignoring the fact that the appellant had deposited the same before the due date for filing the return of his income under section 139(1) and the deduction was, therefore, allowable under the provisions of section 43B of the Income Tax Act, 1961. 2 The Ld. CIT-A was not justified in rejecting the appeal of the appellant and confirming the order of the Ld. AO making the said addition, ignoring the judicial precedents as laid down by the Hon'ble jurisdictional Tribunal, High Court and the Supreme Court in this regard. 3. The Ld. CIT-A was not justified in confirming the action of the Ld. AO by holding that the amendments Mr. Narayana Nippanin Rao, Mumbai. - 3 - made to the sections 2(24)(x), 36(1)(va) and 43B of the Act by the Finance. Act, 2021 were clarificatory and, therefore, retrospective in nature, ignoring the Explaining the Provisions provision of the Memorandum in the Finance Bill, 2021 making it applicable w.e.f. 01/04/2021 i.e. A.Y. 2021-22 and subsequent assessment years. 4 The appellant craves leave to add, amend, modify, delete any ground(s) of appeal.
The brief facts of the case that, the assessee is an individual and is engaged in the business of Manpower security supply contractor and proprietor of M/s. Nippani Narayana Rao Security Agency. The assessee has filed the return of income for the A.Y 2018-19 on 26.09.2018 disclosing a total income of Rs.25,64,220/-Subsequently the return of income was processed u/s 143(1) of the Act with disallowance of employees contribution towards Provident Fund(PF) of Rs.9,29,886/- u/s 36(1)(va) of the Act and total income was determined at Rs.36,74,436/- vide order dated 29.04.2019.
Aggrieved by the order, the assessee has filed the rectification petition u/s 154 of the Act and was rejected vide order dated 30-06-2019 by the AO. Aggrieved by the order u/s 154 of the Act, the Mr. Narayana Nippanin Rao, Mumbai. - 4 - assessee has filed an appeal before the CIT(A). Whereas, the CIT(A) considered the grounds of appeal, submissions of the assessee and finding of the AO and was not satisfied with the claim and has confirmed the addition of the A.O and dismissed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon’ble Tribunal.
5. At the time of hearing, the Ld. AR of the assessee submitted that that the assessment was completed u/s 143(1) of the Act with the disallowance employees contribution towards Provident Fund(PF). Earlier the Hon’ble Tribunal has allowed the assessee appeal and on the MA of the Revenue, the ITAT order was recalled. The Ld.AR emphasized that there was never an opportunity to the assessee to submit the details of payments/deposits before the AO. Further the Ld. AR has filed the statement of PF contribution chart with the actual date of payment of salary and P.F deduction from salary. The Ld.AR contentions are that the important facts with respect to date of deduction of PF and actual date of deposit of PF by the employer never verified and most of the time
Mr. Narayana Nippanin Rao, Mumbai. - 5 - consolidated salary including arrears were paid at a time which could not be examined and prayed for an opportunity before the lower authorities to substantiate with the material evidences. Per Contra, the Ld. DR supported the order of the CIT(A)..
We heard the rival submissions and perused the material on record. The sole matrix of the disputed issue is with respect to the disallowance of provident fund (PF) made by the AO u/s 143(1) of the Act and the rectification petition U/sec154 of the Act was also rejected. Whereas, the Ld.AR emphasized on the facts with respect to date of deduction of PF and actual date of deposit of PF by the employer were never verified and most of the time consolidated salary including arrears were paid at a time. Further the assessee has deposited the employees contribution of PF within the grace period allowed under respective acts and these details were not dealt by the A.O. and prayed for one more opportunity of hearing before the lower authorities. We find the return of income was processed under 143(1) of the Act and the Ld.AR has demonstrated the facts, dates of deduction and actual payment of PF and percentage
Mr. Narayana Nippanin Rao, Mumbai. - 6 - of consolidated salary including the arrears paid on the particular date in the chart in the course of hearing. Accordingly, considering the facts, circumstances and the submissions and to meet the ends of justice, shall provide one more opportunity of hearing to the assessee to substantiate the claims before the assessing officer and we restore the disputed issues to the file of the Assessing officer to examine the claims and decide on the merits. And the assessee should be provided adequate opportunity of hearing and the assessee should cooperate in submitting the information and we allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24.05.2023.