SRI. ELAVARTHY RAMANA REDDY,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-4(3)(1), BENGALURU

The brief facts of the leading case is that the assessee is an individual carries on the business of management of municipal solid waste secured from BBMP. The assessee maintained books of account and also subjected to Audit u/s 44AV of the Act. It filed its return on income on 02/01/2021 declaring taxable income of Rs.49,40,760/-. Along with the return of income, the assessee had also filed the report of CA u/s 44AB and Form 3CB and 3CD on the same day. The SCIT made disallowance of Rs.7,58,970/- u/s 36(1)(va) of the Act based upon the disallowance in the tax audit report of the CA and From 3CD as the case made out by the revenue. The case of the assessee is that belated remittance of employees contribution to PF/ESI would also not to be taxable having regard to sec. 43B of the Act provided the same has been paid before the due date of filing of return u/s 139 of the Act. The aforesaid disallowance of Rs.758970/-, is therefore, not called for and the ld.cousnel for the assessee, therefore prayed for remitting the matter to the file of ld.AO for fresh adjudication. We note that the details of the salary paid to the employees before due date and date of making payment of PF both in respect of and also in respect of ESI has been furnished before us by the assesee appearing at page No.8 of the paper book filed before us. The extract of the same is as follows:-

The assessee’s case is, thus, in view of the details given hereinabove, the disallowance is of Rs.6,89,909/- and relief is of Rs.69,057/- towards ESI is not warranted when it was to be considered from the date of actual remittance of salary. The same is therefore, liable to be deleted.

We do not find any serious objection to this effect from the ld.DR as against the contention made by the assesee before the authorities below and before us too.

Thus, having regard to the facts and circumstances of the case, we find merit in the submission and case made out by the assesee. In that view of the matter, we under the present facts and circumstances of the case find it fit and proper to remit the issue to the file of the ld.AO to consider the details as provided by the assessee as summarized hereinabove and to pass speaking order in favour of the assesee after giving an opportunity of being heard to the assessee and to adduce evidence at the time of hearing the appeal before the ld.AO.

In the result, the appeal of the assessee is allowed for statistical purposes.