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Income Tax Appellate Tribunal, MUMBAI BENCH “A” BENCH
Before: SHRI VIKAS AWASTHY & SHRI S RIFAUR RAHMANvk-vk-la- 110eaqcbZ@2022 ¼fu-oa- 2019&20½
vihykFkhZ }kjk@Appellant by : Shri Gaurav Potdar izfroknh }kjk@Respondent by : Shri Manoj Kumar Sinha, Sr. AR lquokbZ dh frfFk@Date of hearing : 15/03/2023 ?kks”k.kk dh frfFk@Date of pronouncement : 23/05/2023 vkns’k/ ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax Appeals, National Faceless Appeal Centre, Delhi (hereinafter referred to as “the CIT(A)”) dated 22.11.2021, for the assessment year 2019-20.
P a g e | (A.Y.2019-20) A G ENVIRO INFRA PROJECTS PVT. LTD 2. The short issue in appeal by the assessee is disallowance of employees contribution to PF and ESIC u/s 36(1)(va) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
Shri Gaurav Potdar appearing on behalf of the assessee submitted that the ratio laid down by the Hon’ble Supreme Court of India in the case of Checkmate Services Private Limited vs. CIT, 143 taxmann.com 178 would not apply in the present case as the disallowance u/s 36(1)(va) of the Act has been made in the case of assessee in proceedings u/s 143(1) of the Act. Whereas, in the case of Checkmate Services Private Limited, the assessment was made u/s 143(1) of the Act. The Ld. Authorised Representative (AR) in support of his submissions placed reliance on the decision of Tribunal in the case of Kalpesh Synthetics Private Limited vs. DCIT, 137 taxmann.com 475.
Per contra, Shri Manoj Kumar Sinha representing the Department vehemently placing reliance on the decision of Checkmate Services Private Limited (supra) prayed for dismissing appeal of the assessee. The Ld. Departmental Representative (DR) further submitted that the Tribunal in the case of Nissan Enterprises Limited vs. DCIT in decided on 17.02.2023 has held that the judgment rendered in the case of Checkmate Services Private Limited (supra) would also apply wherein, assessment is completed u/s 143(1) of the Act. To further buttress his argument, he placed reliance on another decision of the Tribunal in the case of Deutsche India Private Limited in ITA No.2842/Mum/2022 decided on 22.02.2023.
Both sides heard. The issue of disallowance u/s 36(1)(va) of the Act in respect of deposit of employees contribution under Provident Fund Act and Employees State Insurance Act beyond due date has now been laid to rest by the Hon’ble Apex Court in the case of Checkmate Services Private Limited (supra). The distinction
P a g e | (A.Y.2019-20) A G ENVIRO INFRA PROJECTS PVT. LTD now being created from escaping the liability that the decision in the case of Checkmate Services Private Limited was rendered in respect of assessment made u/s 143(3) of the Act, hence, the said ratio would not apply to assessment u/s 143(1) of the Act is without merit. Once, it is evident from the records that payments in respect of employees contribution to PF and ESIC has been made beyond the due date as specified under the respective Acts, the same has to be disallowed u/s 36(1)(va) of the Act. A perusal of section 143(1)(a)(ii) of the Act makes it clear that adjustment can be made in respect of an incorrect claim made that is apparent from the information in the return. The mandatory requirement before making adjustment is that intimation has to be given to the assessee. After response from the assessee, if any, adjustment shall be made. In the instant case, we find notice/information was sent to the assessee on 14.01.2020. The assessee responded to said notice on 14.01.2020 itself. Thus, disallowance was made after following due procedure under the Act. We find no merit in the argument raised by the Ld. AR of the assessee. Ergo, appeal of the assessee is dismissed.
Order pronounced in the open court on Tuesday the 23rd day of May 2023.