ERNST & YOUG MERCHANT BANKING SERVICES LLP,MUMBAI vs. ASST. COMM OF INCOME TAX, CPC, KARNATAKA

The facts relating to the issue are stated in brief. The assessee herein is engaged in the business of providing corporate advisory services and merchant banking services. It filed its return of income on 30.10.2019 declaring a total income of Rs. 16.34 crores, which was later revised to Rs. 16.33 crores by way of filing a revised return of income. The said return of income was processed by the CPC under section 143(1) of the Act, wherein the CPC proposed to make certain adjustments. In response to the notice issued by CPC, the assessee filed its replies. Subsequently the CPC issued

It is the submission of the assessee that the tax auditor has committed an error in reporting the date of payment of the provident funds collected from the employees in respect of four payments, out of 11 payments mentioned in the Tax audit report. He submitted that the above said four payments have been made within the due dates and hence no disallowance of the same is called for. In this regard, the learned AR submitted that the tax auditor has issued a revised certificate mentioning the correct dates of payment and the same is being furnished as additional evidence. He submitted that, as per the revised certificate issued by the tax auditor the addition will fall down by Rs. 21,99,338/-. The Learned AR further submitted that the assessee has also furnished copies of challans and relevant bank account copies in support of the revised certificate issued by the tax auditor. Accordingly, the learned AR prayed that the above said additional evidences may be admitted and relief may be granted to the assessee.

The Learned DR, however, submitted that the additional evidences furnished by the assessee would require examination at the end of the Assessing Officer. Accordingly, he submitted that the matter may be restored to the file of the Assessing Officer for examining it afresh by duly considering the additional evidences furnished by the assessee.

We have heard the rival contentions and perused the record. In the tax audit report, the tax auditor has listed out the dates of payment of employees’ provident fund by the assessee, wherein the assessee seems to 3 Ernst & Young Merchant Banking Services LLP have paid the employees contribution to PF beyond the due date prescribed under provident fund Act in eleven instances. The aggregate amount of the above said payments was Rs. 22,37,042/-. Accordingly in terms of section 36(1)(va) of the Act, the CPC disallowed the above said amount while processing the return of income of the assessee under section 143(1) of the Act. It the submission of the assessee us that in the following four cases, the date of payments has been wrongly mentioned by the tax auditor.

The assessee has raised certain more grounds regarding charging of interest under section 234A, 234B & 234C of the Act. These are consequential in nature and hence do not require adjudication.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.