SHRINIWAS MISHRA,MUMBAI vs. DY.CIT CPC, BANGALORE

The Hon’ble Tribunal in the Miscellaneous application filed by the Revenue in MA No. 8/Mum/2023 dated 17.03.2023 has recalled the Hon’ble Tribunal order dated 26.05.2022 considering the decision of the Hon’ble Supreme Court in the case Shriniwas Mishra, Mumbai. of Checkmate Services Pvt Ltd vide civil application No. 2833 of 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.

The assessee has raised the following grounds of appeal:

It is submitted that the juri ictional High Court has clearly held that the payment of employees contribution towards Provident Fund and SIC are allowable as per the provisions of section 43B of Income Tax Act, 1961 and thus not to follow the decision of Hon'ble Juri ictional high court is clearly a contempt court. In view of this, respectfully following decisions of Hon'ble Bombay High Court, the addition made of Rs.22 95.056/- be deleted.

The ld. CIT(A) has erred in confirming the addition of Rs.22,95,056/- being payment of Employees contribution towards Provident Fund and ESIC by incorrectly interpreting the amended provisions of Sections 36(va) as well as 43B of Income tax Act vide Finance Act, 2021. It is submitted that Memorandum and Finance Bill clearly suggest that these Shriniwas Mishra, Mumbai. amendments will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2 021-22 and subsequent assessment years. In view of this, the amended provisions of Sections 36(va) as well as 43B vide Finance Act, 2021 will apply prospectively and not retrospectively to the year under consideration. i.e. AY 2018-19 and thus the addition made and confirmed of R 22,95,056/- by incorrect interpretation be strongly deserves to be deleted.

The brief facts of the case are that the assessee is an individual and has filed the return of income for the A.Y 2018-19 on 29.10.2018 disclosing a total income of Rs. 27,33280/- and the return of income was processed u/s 143(1) of the Act. Where the employees contribution (PF&ESI) aggregating to Rs.22,95,056/- was disallowed u/s 36(1)(iva) of the Act due to delay of deposit of PF & ESI under respective Acts and the total income was determined at Rs. 50,28,340/- vide order dated 17.05.2019. Shriniwas Mishra, Mumbai.

Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the AO but has confirmed the action of the A.O. Aggrieved by the CIT(A)order. the assessee has filed an appeal before the Hon’ble Tribunal.

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 of PF& ESIC payments. 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 ESI and PF contribution due dates and actual contribution. The Ld. AR contentions are that the important facts of accrual of salary and actual deposits are to be verified and there is disallowance as per the intimation U/sec 143(1) of the Act. The assessee has made deposits/payments within the due date and the grace Shriniwas Mishra, Mumbai. period allowed under the respective Acts and pleaded for one more opportunity before the lower authorities to substantiate with the material evidences and prayed for allowing the appeal. Contra, the Ld. DR supported the order of the CIT(A).

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) and ESIC made by the AO u/s 143(1) of the Act. The contentions of the Ld.AR that the assessee has deposited the employees contributions of PF & ESIC within the grace period allowed under respective acts and in some cases, were the due date of deposit of PF&ESIC falls on public holiday and in such cases, the contribution was deposited on the next working day and theses details were not dealt by the A.O. and prayed for one more opportunity of hearing before the lower authorities. Whereas the return of income was processed under 143(1) of the Act and the Ld.AR contentions appears reasonable. Accordingly, considering the facts, circumstances and the submissions and to meet the ends of justice, shall provide one more opportunity of hearing to the Shriniwas Mishra, Mumbai. assessee to substantiate the claims before the assessing officer and therefore for limited purpose, restore the disputed issues along with evidences to the file of the Assessing officer to examine and verify the claim and decide on the merits. And the assessee should be provided adequate opportunity of hearing and the assessee should cooperate in submitting the information. Accordingly, the grounds of appeal of the assessee are allowed for statistical purposes.

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

""यथ" / The Respondent. संबं"धत आयकर आयु"त / The CIT(A) 3. 4. आयकर आयु"त(अपील) / Concerned CIT "वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, अहमदाबाद / DR, ITAT, Mumbai 5. 6. गाड" फाईल / Guard file. Shriniwas Mishra, Mumbai. आदेशानुसार/ BY ORDER, स"या"पत ""त ////()