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Facts
The assessee's appeal for AY 2018-19 arose from an order under section 143(1) of the Income Tax Act. The primary issue involved additions/disallowances made by the AO relating to employee PF and ESIC contributions and other disallowances under section 40(a)(ia).
Held
The Tribunal restored the matter to the assessing authority for re-computation. The AO was directed to ensure that no double disallowance or additions were made in the hands of the assessee.
Key Issues
Whether the disallowance/addition made by the AO under section 40(a)(ia) for employee PF and ESIC contributions resulted in double addition, and if the addition was outside the scope of section 143(1) processing.
Sections Cited
143(1), 139(1), 36(1)(va), 40(a)(ia)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: Shri Satbeer Singh Godara & Shri Manish Agarwal
Date of Hearing: 17.07.2025 Date of Pronouncement: 28.7.2025 ORDER
PER SATBEER SINGH GODARA, JM:
This assessee’s appeal for Assessment Year 2018-19, arises against the NFAC’s Delhi DIN & Order No. ITBA/NFAC/S/250/2021-22/1035808840(1) dated 22.09.2021, in proceedings u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
The assessee has raised the following substantive grounds:- 1. That under the facts and circumstances Ld. CIT(A) erred in law as well as on merits in not condoning the delay in filing the appeal.
2 2. That under the facts and circumstances the AO at CPC erred in law and on merits in making addition / adjustment of Rs. 12,88,983/- for the PF and ESIC contribution of the employees, deposited beyond the due date as per PF and ESIC Act but within the time allowed to file the ITR u/s. 139(1), more so as law laid down in PCIT vs. Pro Interactive Service India Pvt. Ltd. dated 10.09.2018 (DHC) and CIT vs. Aimil Ltd. 321 ITR 508 (DHC) while processing the return u/s. 143(1). 2.1 That under the facts and circumstances, the disallowance u/s. 36(1) (va) of Rs. 12,88,983/- for PF and ESIC contribution of employees deposited beyond the due date as per PF and ESCI Act but within the time allowed to file the ITR is outside the scope of addition / adjustment while processing the ITR u/s. 143(1) of the Act. Apart from this, this issue, at the most, being highly debatable therefore outside the scope of adjustment u/s. 143(1).
3. That under the facts and circumstances, AO at CPC, erred in law as well as on merits in making addition of Rs. 16,56,509 u/s. 40(a)(ia) (8,28,254 + 8,28,254), more so, Rs. 8,28,254/- already stands self-added in computation, hence, by making again addition of Rs. 16,56,509/-, the disallowance u/s. 40(a)(ia) for the same amount stands made 03 times, one time by the assessee suo moto and two times by CPC u/s. 143(1).
Both the learned representatives fairly inform that after the tribunal’s recall/ rectification order in the assessee’s misc. application MA No. 57/Del/2022, the sole substantive issue which survives before us pressed before us is only the above extracted 3rd ground challenging the lower authorities’ action invoking section 40(a)(ia) disallowance/addition of Rs. 16,56,509/- in question.
Faced with this situation, ld. counsel submits that the assessee hereby restricts its challenge to the above section 40(a)(ia) disallowance/addition to the extent that there is no double addition made in it’s hands, once it had already added it