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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI AMIT SHUKLA, JM & SHRI S RIFAUR RAHMAN, AM
O R D E R
Per Amit Shukla, Judicial Member:
The aforesaid appeal has been filed by the assessee against the impugned order dated 17.11.2022, passed by National Faceless Appeal Centre (NFAC), Delhi for AY 2020-2, in relation to the Hindustan Facilities P.Ltd adjustment made u/s 143(1). In the grounds of appeal, the Assessee had challenging the disallowance 36(1)(va) amounting to Rs.21,29,025/- pertaining to the payment of employee contribution to the Provident Fund act 1952 for the month of April 2019.
2. The relevant grounds are as under:
1. Learned NATIONAL FACELESS APPEAL CENTRE (NFAC) erred in law and facts in not granting proper opportunity for making the written submission before him thus depriving the appellant of the principle of natural justice. The learned NFAC vide notice dated 2- Nov-2022 granted a time for making the submission till 17th Nov 2022. However, the NFAC passed the ex parte order on 17th Nov 2022 (time 12.56 PM) i.e. before the expiry of the granted date.
2. The CPC Bangalore (i.e. the learned AO) erred in law and on facts and the learned 'NFAC' erred in law and in facts in sustaining, disallowance u/s 36(1)(va) of Income Tax Act 1961, amounting to Rs. 21,29,025 pertaining to the payment of employee contribution to the Provident Fund Act 1952 for the Month of April 2019. In arriving at the above conclusion the lower authorities AO failed to appreciate that -the due date mentioned in the Tax Audit report (i.e. 15th April 2019) for the payment pertaining to the month of April 2019 is erroneous, the correct due date is 15th May 2019. This anomaly of Hindustan Facilities P.Ltd erroneous disclosure in the Tax Audit report resulted in an incorrect disallowance. -Actual payment is made on 15th May 2019, which is on or before the due date for the month of April 2019, and hence no disallowance u/s 36(1)(va) is called for.
3. The briefs facts are that, Appellant had filed its original return of income on 15-02-2021 by declaring total Income of Rs. 2,56,960/-. The return was processed by CPC vide intimation dated 24/12/2021 issued u/s 143(1) of the Act received by appellant on the same day. On perusal of the said intimation, it was observed that CPC has disallowed an amount of Rs. 25,26,246/- for the variances as mentioned in the table below-
Sr No. Particulars Amount Amount Disallowance mentioned in mentioned in ITR 3CD 1 Disallowance with 25,26,246 25,26,246 respect to provident fund and any fund set up under the - provisions of ESI, Act, 1948. (Sec 36(1)(va) Total 25,26,246 25,26,246
The Ld. CIT(A), has noted that there was delay in the payment of employees contribution of PF and contribution for ESI for various months, but same was deposited before the due
Hindustan Facilities P.Ltd date filing of return of income u/s 139(1). The CPC has made a adjustment in the intimation passed u/s 143(1) by making an addition of Rs. 25,26,246/-.
The Ld.CIT(A), has relied upon the decision of Hon’ble Supreme Court in the case of “Checkmate Services Private Limited vs. CIT” 2022, 448 ITR 518, order dated 12.10.2022 and has confirmed the addition.
On the perusal of the grounds of appeal, it is seen that Assessee has stated that the payment of employee contribution to the provident fund for the month of April 2019, was made before the due date prescribed under respective Act which was 15th May 2019 and therefore, no disallowance u/s. 36(1)(va) can be made. Since, this is a factual issue therefore, matter is limited back to file Assessing Officer to examine whether the payment of employee contribution to the provident fund of Rs.21,29,025/- has been made on the correct due date of 15th May 2019; and if the same has been paid on or before this date, then no disallowance should be made.
Hindustan Facilities P.Ltd 7. However, in so far as disallowance of ESI is concerned, the same is covered by the decision of Hon’ble Supreme Court in the case of “Checkmate Services Private Limited vs. CIT” (Supra), and accordingly, order of the Ld.CIT(A), on this point it is conformed.
In the result, appeal of the Assessee is partly allowed for statistical purposes.
Orders pronounced in the open court on 31st Jan, 2023. Sd/- Sd/- (S Rifaur Rahman) (Amit Shukla) Accountant Member Judicial Member मुंबई Mumbai;ददनांक Dated : 31.01.2023 Mrs.Urmila आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. दवभागीयप्रदतदनदध, आयकरअपीलीयअदधकरण, मुंबई/ DR, ITAT, Mumbai गार्डफाईल / Guard File 6. आदेशधिुसधर/ BY ORDER,