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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI NARENDER KUMAR CHOUDHRY
These three appeals by the assessee are directed against three separate orders passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre [in short ‘the Ld. CIT(A)’] for assessment years 2017-18 to 2019-2020 respectively. The grounds of appeal raised in these appeals are common/identical and therefore same were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts.
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The grounds raised for assessment year 2017 The grounds raised for assessment year 2017 The grounds raised for assessment year 2017-18 are reproduced as under: reproduced as under:
“1. Ld. CIT (Appeals) erred in confirming the adjustment 1. Ld. CIT (Appeals) erred in confirming the adjustment 1. Ld. CIT (Appeals) erred in confirming the adjustment made to Total Income of the Appellant Company u/s made to Total Income of the Appellant Company u/s made to Total Income of the Appellant Company u/s 143(1)(a)(iv) of the Act in the In 143(1)(a)(iv) of the Act in the Intimation passed u/s 143(1) of timation passed u/s 143(1) of the Act by Ld. Centralized Processing Centre (CPC), Income the Act by Ld. Centralized Processing Centre (CPC), Income the Act by Ld. Centralized Processing Centre (CPC), Income Tax Department to the tune of Rs. 9,84,475/ Tax Department to the tune of Rs. 9,84,475/- being alleged being alleged belated payment of Employees contribution to PF & ESIC as belated payment of Employees contribution to PF & ESIC as belated payment of Employees contribution to PF & ESIC as the payments were made beyond the due date as spec the payments were made beyond the due date as spec the payments were made beyond the due date as specified in the respective PF & ESIC Act. in the respective PF & ESIC Act. Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and circumstances of the case as well as in law, the said circumstances of the case as well as in law, the said circumstances of the case as well as in law, the said adjustment to Total Income of the Appellant Company to the adjustment to Total Income of the Appellant Company to the adjustment to Total Income of the Appellant Company to the tune of Rs. 9,84,475/ tune of Rs. 9,84,475/-u/s 36(1) (va) of the Act is bad in law is bad in law and ought to be allowed in full while passing Intimation u/s and ought to be allowed in full while passing Intimation u/s and ought to be allowed in full while passing Intimation u/s 143(1) of the Act. 143(1) of the Act. Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and circumstances of the case as well as in law, the said circumstances of the case as well as in law, the said circumstances of the case as well as in law, the said adjustment made to Total Income of the Appellant Com adjustment made to Total Income of the Appellant Com adjustment made to Total Income of the Appellant Company u/s 143(1)(a)(iv) of the Act which are confirmed by u/s 143(1)(a)(iv) of the Act which are confirmed by u/s 143(1)(a)(iv) of the Act which are confirmed by CIT(Appeals) ought to be deleted. CIT(Appeals) ought to be deleted.
2. Ld. CIT (Appeals) erred in confirming the adjustment made 2. Ld. CIT (Appeals) erred in confirming the adjustment made 2. Ld. CIT (Appeals) erred in confirming the adjustment made to Total Income of the Appellant Company u/s 143(1)(a)(iv) of to Total Income of the Appellant Company u/s 143(1)(a)(iv) of to Total Income of the Appellant Company u/s 143(1)(a)(iv) of the Act in the Intimation passed u/s 143(1 the Act in the Intimation passed u/s 143(1) of the Act by Ld. ) of the Act by Ld. CPC, Income Tax Department to the tune of Rs. 9,84,475/ CPC, Income Tax Department to the tune of Rs. 9,84,475/ CPC, Income Tax Department to the tune of Rs. 9,84,475/- without considering objections/ replies filed by the Appellant without considering objections/ replies filed by the Appellant without considering objections/ replies filed by the Appellant Company Company about about non-applicability non applicability of of provisions provisions of of section143(1)(a)(iv) of the Act & without recording any section143(1)(a)(iv) of the Act & without recording any section143(1)(a)(iv) of the Act & without recording any reasons for its rejection. its rejection. Appellant Company submits that relevant clause 20(b) of Appellant Company submits that relevant clause 20(b) of Appellant Company submits that relevant clause 20(b) of Audit Report in Form 3CD, nowhere, requires Auditor to Audit Report in Form 3CD, nowhere, requires Auditor to Audit Report in Form 3CD, nowhere, requires Auditor to report disallowance in clause 20(b) of Form 3CD (Tax Audit report disallowance in clause 20(b) of Form 3CD (Tax Audit report disallowance in clause 20(b) of Form 3CD (Tax Audit Report). In other words, it is only information about due date Report). In other words, it is only information about due date Report). In other words, it is only information about due date of Payment and actual date of payment of ESIC and PF dues ent and actual date of payment of ESIC and PF dues ent and actual date of payment of ESIC and PF dues which is required to be reported by the Tax Auditor. which is required to be reported by the Tax Auditor. which is required to be reported by the Tax Auditor. Appellant Company submits passing Order u/s 250 of the Appellant Company submits passing Order u/s 250 of the Appellant Company submits passing Order u/s 250 of the Act without considering objections/replies filed by the Act without considering objections/replies filed by the Act without considering objections/replies filed by the Shreeji Translogistics Ltd.. Shreeji Translogistics Ltd. 3 to 390/M/2023 Appellant Company about non Appellant Company about non-applicability of provisions of of provisions of section 143(1)(a)(iv) of the Act & without recording any section 143(1)(a)(iv) of the Act & without recording any section 143(1)(a)(iv) of the Act & without recording any reasons for its rejection is bad in law & deserves to be reasons for its rejection is bad in law & deserves to be reasons for its rejection is bad in law & deserves to be quashed. Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and circumstances of the case as well as in law, the said circumstances of the case as well as in law, the said circumstances of the case as well as in law, the said adjustment made to Total Income of the Appellant Company tment made to Total Income of the Appellant Company tment made to Total Income of the Appellant Company u/s 143(1)(a)(iv) of the Act which are confirmed by u/s 143(1)(a)(iv) of the Act which are confirmed by u/s 143(1)(a)(iv) of the Act which are confirmed by CIT(Appeals) ought to be deleted. CIT(Appeals) ought to be deleted.
3. Ld. CIT (Appeals) erred in confirming the adjustment made 3. Ld. CIT (Appeals) erred in confirming the adjustment made 3. Ld. CIT (Appeals) erred in confirming the adjustment made to Total Income of the Appellant Company u/s 143(1)(a)(iv to Total Income of the Appellant Company u/s 143(1)(a)(iv to Total Income of the Appellant Company u/s 143(1)(a)(iv) of the Act in the Intimation passed u/s 143(1) of the Act by Ld. the Act in the Intimation passed u/s 143(1) of the Act by Ld. the Act in the Intimation passed u/s 143(1) of the Act by Ld. Centralized Processing Centre (CPC, Income Tax Department Centralized Processing Centre (CPC, Income Tax Department Centralized Processing Centre (CPC, Income Tax Department to the tune of Rs. 9,84,475/ to the tune of Rs. 9,84,475/- which are not prima facie in which are not prima facie in nature. Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and circumstances of the case as well as in law, only prima face ances of the case as well as in law, only prima face ances of the case as well as in law, only prima face adjustments can be made in the Intimation us 143(1) of the adjustments can be made in the Intimation us 143(1) of the adjustments can be made in the Intimation us 143(1) of the Act and not the issues which need discussion and Act and not the issues which need discussion and Act and not the issues which need discussion and deliberation, including verification of documents. deliberation, including verification of documents. Appellant Company submits that in view of th Appellant Company submits that in view of the facts and e facts and circumstances of the case as well as in law, the said circumstances of the case as well as in law, the said circumstances of the case as well as in law, the said adjustment made to Total Income of the Appellant Company adjustment made to Total Income of the Appellant Company adjustment made to Total Income of the Appellant Company u/s 143(1)(a)(iv) of the Act which are confirmed by u/s 143(1)(a)(iv) of the Act which are confirmed by u/s 143(1)(a)(iv) of the Act which are confirmed by CIT(Appeals) ought to be deleted. CIT(Appeals) ought to be deleted.
4. Ld. CIT (Appeals) erred in confirming the ad 4. Ld. CIT (Appeals) erred in confirming the adjustment made justment made to Total Income of the AppellantCompany u/s 143(1) (a) (iv) of to Total Income of the AppellantCompany u/s 143(1) (a) (iv) of to Total Income of the AppellantCompany u/s 143(1) (a) (iv) of the Act in the Intimation passed us 143(1) of the Act to the the Act in the Intimation passed us 143(1) of the Act to the the Act in the Intimation passed us 143(1) of the Act to the tune of Rs. 9, 84,475/ tune of Rs. 9, 84,475/- presuming recent judgement of the presuming recent judgement of the Hon'ble Supreme Court in the case of M/s Checkmate Hon'ble Supreme Court in the case of M/s Checkmate Hon'ble Supreme Court in the case of M/s Checkmate Services Pvt Ltd vs CIT is applicable to the facts of the Pvt Ltd vs CIT is applicable to the facts of the Pvt Ltd vs CIT is applicable to the facts of the present case. present case. Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and Appellant Company submits that in view of the facts and circumstances of the case as well as in law, the Hon'ble circumstances of the case as well as in law, the Hon'ble circumstances of the case as well as in law, the Hon'ble Supreme Court judgement was rendered in the context where Supreme Court judgement was rendered in the context where Supreme Court judgement was rendered in the context where assessment was framed assessment was framed under section 143(3) of the Act and under section 143(3) of the Act and not under section 143(1)(a)(iv) of the Act. In other words, the not under section 143(1)(a)(iv) of the Act. In other words, the not under section 143(1)(a)(iv) of the Act. In other words, the Shreeji Translogistics Ltd.. Shreeji Translogistics Ltd. 4 to 390/M/2023 said Hon'ble Supreme Court judgement does not apply to the said Hon'ble Supreme Court judgement does not apply to the said Hon'ble Supreme Court judgement does not apply to the Intimation issued u/s 143(1) of the Act. Intimation issued u/s 143(1) of the Act.
At the outset, we find that despite notifying for the At the outset, we find that despite notifying for the At the outset, we find that despite notifying for the date of the hearing, neither anyone attended on behalf of the assessee nor any neither anyone attended on behalf of the assessee nor any neither anyone attended on behalf of the assessee nor any adjournment was filed and therefore we adjournment was filed and therefore we were of the opinion that the of the opinion that the assessee was not interested in prosecuting th not interested in prosecuting these appeals. not interested in prosecuting th Accordingly, the appeal Accordingly, the appeals were heard ex-parte qua the assessee and he assessee and after hearing the Ld. Departmental Representative (DR). after hearing the Ld. Departmental Representative (DR). after hearing the Ld. Departmental Representative (DR).
We find that in the We find that in the case, the assessee is aggrieved with the assessee is aggrieved with the adjustment to the returned income made by the Central Processing adjustment to the returned income made by the Central Processing adjustment to the returned income made by the Central Processing Centre (CPC), Bangalore in respect of amount of employee’s Centre (CPC), Bangalore in respect of amount of employ Centre (CPC), Bangalore in respect of amount of employ contribution to PF/ESI of Rs.9,84,475/ PF/ESI of Rs.9,84,475/-, which has been upheld by , which has been upheld by the Ld. CIT(A), in view of the finding of the Hon’ble Supreme Court n view of the finding of the Hon’ble Supreme Court n view of the finding of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd Checkmate Services Pvt. Ltd (supra) (supra). The relevant finding of the Ld. CIT(A) is reproduced as finding of the Ld. CIT(A) is reproduced as under:
“4.21 Reference is also made to the judgement dated 4.21 Reference is also made to the judgement dated 4.21 Reference is also made to the judgement dated 12.10.2022 of the Hon'ble Supreme Court in CIVIL APPEAL 12.10.2022 of the Hon'ble Supreme Court in CIVIL APPEAL 12.10.2022 of the Hon'ble Supreme Court in CIVIL APPEAL NO. 2833 OF 2016 in CHECKMATE SERVICES P. LTD. NO. 2833 OF 2016 in CHECKMATE SERVICES P. LTD. NO. 2833 OF 2016 in CHECKMATE SERVICES P. LTD.- CIT- 1[2022] 143 taxmann.com 178 (SC). After an elaborate 1[2022] 143 taxmann.com 178 (SC). After an elaborate 1[2022] 143 taxmann.com 178 (SC). After an elaborate discussion, it has decided the issue in favo discussion, it has decided the issue in favour of revenue by ur of revenue by upholding the decision of the Hon'ble Gujarat High Court and upholding the decision of the Hon'ble Gujarat High Court and upholding the decision of the Hon'ble Gujarat High Court and finally set the dispute at rest. The A.Y. involved was 2009 finally set the dispute at rest. The A.Y. involved was 2009 finally set the dispute at rest. The A.Y. involved was 2009- 10. It was held in Para 10. It was held in Para-54 & 55 of the judgement as under 54 & 55 of the judgement as under : "54. In the opinion of this Court, the reasoning in the "54. In the opinion of this Court, the reasoning in the "54. In the opinion of this Court, the reasoning in the impugned judgment that the non pugned judgment that the non-obstante clause would not obstante clause would not in any manner dilute or override the employer's obligation to in any manner dilute or override the employer's obligation to in any manner dilute or override the employer's obligation to deposit the amounts retained by it or deducted by it from the deposit the amounts retained by it or deducted by it from the deposit the amounts retained by it or deducted by it from the employee's income, unless the condition that it is deposited employee's income, unless the condition that it is deposited employee's income, unless the condition that it is deposited on or before the on or before the due date, is correct and justified. The non due date, is correct and justified. The non- obstante clause has to be understood in the context of the obstante clause has to be understood in the context of the obstante clause has to be understood in the context of the Shreeji Translogistics Ltd.. Shreeji Translogistics Ltd. 5 to 390/M/2023 entire provision of Section 43B which is to ensure timely entire provision of Section 43B which is to ensure timely entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities payment before the returns are filed, of certain liabilities payment before the returns are filed, of certain liabilities which are to be borne by the asse which are to be borne by the assessee in the form of tax, ssee in the form of tax, interest payment and other statutory liability. interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date In the case of these liabilities, what constitutes the due date In the case of these liabilities, what constitutes the due date is defined by the statute. nevertheless, the assesses are is defined by the statute. nevertheless, the assesses are is defined by the statute. nevertheless, the assesses are given some leeway in that as long as deposits aremade given some leeway in that as long as deposits aremade given some leeway in that as long as deposits aremade beyond the due date, but before the date of filing the return, the due date, but before the date of filing the return, the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the the deduction is allowed. That, however, cannot apply in the the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of case of amounts which are held in trust, as it is in the case of case of amounts which are held in trust, as it is in the case of employees' contributions employees' contributions- which are deducted from their which are deducted from their income. They are n income. They are not part of the assessee employer's income, ot part of the assessee employer's income, nor are they heads of deduction per se in the form of nor are they heads of deduction per se in the form of nor are they heads of deduction per se in the form of statutory pay out. They are others' income, monies, only statutory pay out. They are others' income, monies, only statutory pay out. They are others' income, monies, only deemed to be income, with the object of ensuring that they deemed to be income, with the object of ensuring that they deemed to be income, with the object of ensuring that they are paid within the due date specified in t are paid within the due date specified in the particular law. he particular law. They have to be deposited in terms of such welfare They have to be deposited in terms of such welfare They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments enactments. It is upon deposit, in terms of those enactments enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned and on or before the due dates mandated by such concerned and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and law, that the amount which is otherwise retained, and law, that the amount which is otherwise retained, and deemed an inc deemed an income, is treated as a deduction. Thus, it is an ome, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are essential condition for the deduction that such amounts are essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation deposited on or before the due date. If such interpretation deposited on or before the due date. If such interpretation were to be adopted, the non were to be adopted, the non-obstante clause under Section obstante clause under Section 43B or anything contained in th 43B or anything contained in that provision would not at provision would not absolve the assessee from its liability to deposit the absolve the assessee from its liability to deposit the absolve the assessee from its liability to deposit the employee's contribution on or before the due date as a employee's contribution on or before the due date as a employee's contribution on or before the due date as a condition for deduction. condition for deduction.
In the light of the above reasoning, this court is of the 55. In the light of the above reasoning, this court is of the 55. In the light of the above reasoning, this court is of the opinion that there is no infirmity i opinion that there is no infirmity in the approach of the n the approach of the impugned judgment. The decisions of the other High Courts, impugned judgment. The decisions of the other High Courts, impugned judgment. The decisions of the other High Courts, holding to the contrary, do not lay down the correct law. For holding to the contrary, do not lay down the correct law. For holding to the contrary, do not lay down the correct law. For these reasons, this court does not find any reason to these reasons, this court does not find any reason to these reasons, this court does not find any reason to interfere with the impugned judgment.The appeals are interfere with the impugned judgment.The appeals are interfere with the impugned judgment.The appeals are accordingly dismissed." ingly dismissed." 4.1 In the grounds raised, the assessee has challenged the In the grounds raised, the assessee has challenged the In the grounds raised, the assessee has challenged the addition that the issue was being of debatable nature so the addition that the issue was being of debatable nature addition that the issue was being of debatable nature amount could not be adjusted u/s 143(1)(a)(iv) of the Act. However, could not be adjusted u/s 143(1)(a)(iv) of the Act. However, could not be adjusted u/s 143(1)(a)(iv) of the Act. However,
Shreeji Translogistics Ltd.. Shreeji Translogistics Ltd. 6 to 390/M/2023 we find that in view of the decision of the Hon’bl we find that in view of the decision of the Hon’ble Supreme Court, e Supreme Court, the claim of the assessee regarding employee the claim of the assessee regarding employee’s contribution to ESI s contribution to ESI and PF paid after due date prescribed under the relevant Act is an and PF paid after due date prescribed under the relevant Act is an and PF paid after due date prescribed under the relevant Act is an incorrect claim, which claim, which is liable for adjustment under is liable for adjustment under the provisions of section 143(1)(a)(ii) of the Act. of section 143(1)(a)(ii) of the Act. Before us no submission has been Before us no submission has been filed on behalf of the assessee contesting the finding of ld CIT(A). filed on behalf of the assessee contesting the finding of ld CIT(A). filed on behalf of the assessee contesting the finding of ld CIT(A). Therefore, in our opinion there is no error in the order of the Ld. Therefore, in our opinion there is no error in the order of the Ld. Therefore, in our opinion there is no error in the order of the Ld. CIT(A) on the issue CIT(A) on the issue-in-dispute and accordingly, we accordingly, we uphold the same. In the result, th same. In the result, the grounds raised by the assessee are e grounds raised by the assessee are accordingly dismissed. accordingly dismissed.
The issues raised in other two appeals are identical to issues 5. The issues raised in other two appeals are identical to issues 5. The issues raised in other two appeals are identical to issues raised in appeal for AY 2017 raised in appeal for AY 2017-18 and therefore following our finding 18 and therefore following our finding in AY 2017-18, the grounds raised in appeals for AY 2018 18, the grounds raised in appeals for AY 2018 18, the grounds raised in appeals for AY 2018-19 and 2019-20 are dismissed 20 are dismissed mutatis mutandis.
In the result, In the result, all three appeals filed by the assessee are three appeals filed by the assessee are dismissed. Order pronounced in the open Court on Order pronounced in the open Court on 26/04/2023. 04/2023. Sd/- Sd/- Sd/ (NARENDER KUMAR CHOUDHRY NARENDER KUMAR CHOUDHRY) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT Mumbai; Dated: 26/04/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent.
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