YORK PRINT PRIVATE LIMITED,GUWAHATI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-SHILLONG, SHILLONG

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ITA 1/GTY/2022Status: DisposedITAT Guwahati13 October 2023AY 2019-206 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The tribunal dismissed the grounds related to the disallowance of employee's PF & ESI contribution, citing the Supreme Court's decision. However, it remanded the issue of enhancing the Section 80IE deduction to the Assessing Officer, considering the Board's circular.

What were the facts?

The assessee's appeal concerned the disallowance of employee's contribution to PF & ESI paid after the due date and the subsequent impact on Section 80IE deduction. The Assessing Officer disallowed the contribution, and the CIT(Appeals) confirmed this. The assessee argued that any disallowance should be factored into the Section 80IE deduction.

What were the issues?

Whether the disallowance of employee's PF & ESI contribution paid late impacts the eligibility and quantum of deduction under Section 80IE.

Which sections of the Income-tax Act were involved?

Section 80IE

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Income Tax Appellate Tribunal, KOLKATA-GUWAHATI ‘e-COURT’, KOLKATA

Before: Shri Rajpal Yadav, Vice- & Shri Rajesh Kumar

order : October 13, 2023 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 12th November, 2021 passed for A.Y. 2019-20. Assessment Year : 2019-2020 York Print Pvt. Limited 2. In Grounds no. 1 to 3, the assessee has pleaded that ld. CIT(Appeals) has erred in confirming the disallowance of Rs.28,05,153/-, which was disallowed by the ld. Assessing Officer on the ground that employees’ contribution was not paid within the due date provided in P.F. & ESI Acts. As far as the above dispute is concerned, the controversy has been silenced by the Hon’ble Supreme Court in the case of Checkmate Services (P) Limited –vs.- CIT reported in 143 taxmann.com 178.

3.

The ld. Counsel for the assessee conceded that this ground deserves to be dismissed and the disallowance deserves to be confirmed. Therefore, these three grounds are dismissed.

4.

In Grounds No. 4, 5 & 6, the assessee has pleaded that in case any disallowance is being made out of the business expenses claimed, then, it would result into enhancement of taxable income. The assessee is entitled for deduction under section 80IE. There is no dispute with regard to admissibility of this deduction. The only dispute is that in case, disallowance is being made, then the deduction to that extent be enhanced. For this purpose, the assessee relied upon the Board’s Circular bearing No. 37/2016, which has been placed on pages no. 41 to 42 of the paper book. Assessment Year : 2019-2020 York Print Pvt. Limited

5.

The ld. D.R., on the other hand, was unable to controvert this proposition. He submitted that ld. CIT(Appeals) has recorded a finding that no such issue emerges out from the record.

6.

Brief facts of the case are that the assessee has filed its return under section 139(1). This return was processed by CPC, Bengaluru under section 143(1) and intimation was given to the assessee on 30.06.2020. Dissatisfied with the adjustments made in this return, the assessee filed an appeal. The assessee took a plea for grant of deduction under section 80IE, but ld. CIT(Appeals) has rejected this claim on the ground that no such issue is emerging out from the record. Before us, the assessee submitted that ld. Assessing Officer himself has granted the deduction under section 80IE, therefore, the grant is not in dispute. The only dispute relates to quantification of the deduction. According to the assessee, the disallowance out of P.F & ESI would ultimately enhance the taxable income of the assessee and that enhanced income would further qualify for grant of deduction under section 80IE. It is pertinent to observe that since it is a computer processed assessment order, therefore, facts have not been noticed in details. At this stage, we deem it appropriate to reproduce the Board’s Circular, which reads as under:- Assessment Year : 2019-2020 York Print Pvt. Limited Assessment Year : 2019-2020 York Print Pvt. Limited 7. Following the above Circular, we remit the issue to the file of ld. Assessing Officer for redetermination of the deduction admissible under section 80IE of the Income Tax Act. It is further made clear that the deduction claimed and granted by the CPC, Bengaluru is not disturbed. The only issue, which is remitted to the ld. Assessing Officer is, whether P.F. & ESI claim disallowed to the assessee will further qualify for grant of deduction or not. In the garb of deciding this issue, the ld. Assessing Officer will not withdraw deduction under section 80IE, if any granted to the assessee on the basis of this order.

8.

In view of the above, the appeal of the assessee is partly allowed.

Order pronounced in the open Court on October 13, 2023.

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