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Income Tax Appellate Tribunal, ‘C/SMC’ BENCH: CHENNAI
Before: SHRI MAHAVIR SINGHAND
आयकर अपीलीय अिधकरण, ‘सी/एस एम सी’’ "यायपीठ, चे"ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C/SMC’ BENCH: CHENNAI "ी महावीर "सह, उपा"य" के सम" BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND
आयकर अपील सं./ITA No.983/Chny/2022 िनधा"रण वष" /Assessment Year: 2020-21 Rajaram Srinivasan, The Asst. Director of Income F-1, Malles Raasi Enclave, Vs. Tax, No.32, 18th Avenue, Centralized processing Center, Ashok Nagar, Bengaluru. Chennai – 600 083 [PAN: AKMPS-3592-F] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant by : Shri Vipul J. Shah, Advocate ""यथ" क" ओर से /Respondent by : Shri S. Chandrasekaran, JCIT सुनवाई क" तारीख/Date of Hearing : 07.03.2023 : 07.03.2023 घोषणा क" तारीख /Date of Pronouncement आदेश / O R D E R This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [CIT(A)] in Appeal No.NFAC/2019-20/10095044 dated 03-08-2022. The return of income was processed and intimation u/s.143(1) of the Income Tax Act, 1961 (hereinafter the ‘Act’) was issued by the Assistant Director of Income Tax, CPC, Bengaluru for the assessment year 2020-21 vide order dated 30.11.2021. :- 2 -: 2. At the outset it is noticed that this appeal is time barred by 47
days. As per Form-36, the date of service or communication of the appellate order is mentioned as 03.08.2022 and the appeal before the Tribunal is to be filed on or before 01.10.2022. The appeal was actually filed on 18.11.2022 thereby there is a delay of 47 days. When
this was pointed out to the Ld. counsel for the assessee, he drew my
attention to the affidavit that the assessee has filed rectification petition
before CIT(A) and the relevant fact noted in Para 7 to 10 which reads
as under:
“7. That aggrieved with the said abrupt and arbitrary action by the CIT(A), I had filed an application for rectification by sending email on Samadhan.faceless.appeal@incometax.gov.in,webmanager@incomet axindia.gov.in, efilingwebmanager@incometax.gov.in. A copy of the letter is annexed herewith and marked as "Exhibit - B". 8. That on 08.10.2022 I have filed a Grievance Application but the same has also not been responded by the grievance cell also. 9. The CIT(A) had passed order on 03.08,2022 and the same was received by me on 03.08.2022. The due date for filing appeal was 02.10.2022 and there is a delay of 44 days in filing this appeal. 10. I say that the said delay is unintentional and the same has been caused due to non-receipt of any reply to rectification application filed by me. I say that to avoid multiplicity of proceedings, I was waiting for the reply from the respective department and which caused the delay.”
The Ld. counsel for the assessee stated that the assessee was not aware and he was availing alternative remedy before Grievance
Redressal System and therefore, there is a delay of 44 days. When
this was pointed out to the Ld. Sr. D.R he could not controvert the :- 3 -: above fact situation. After going through the reasons stated by the assessee in his affidavit for condonation of delay, the reasons seems
to be reasonable and hence, I condone the delay and admit the appeal
for adjudication.
The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the A.O in processing the return of income u/s. 143(1) of the Act by making disallowance of employees contribution of Rs. 17,83,229/- u/s. 40A(9) of the Act
without appreciating that the contribution made in Government
recognized provident fund and deposited in the Government Treasury
before the due date of filing of return u/s. 139(1) of the Act. For this,
the assessee has raised various grounds which need not to be reproduced.
I have heard the rival contentions and gone through the facts
and circumstances of the case. The CPC, Bengaluru made adjustment
u/s. 143(1) of the Act and made addition of Rs. 17,83,229/- u/s. 40A(9)
of the Act, because in Form No.3CD at Page No.5 at Coloumn
No.21(f) an amount of Rs. 17,83,229/- has been entered with the remarks that “any sum paid by the assessee as an employer not allowable u/s. 40A(9) of the Act”. The relevant noting of the ADIT of the said intimation u/s. 143(1) of the Act at Page 26 reads as under: :- 4 -: “Any sum paid by the assessee as an employer for setting up or as contribution to any fund, trust, company, AOP, or BOI or Society or any other institution [40A(9)].”
The CIT(A) also confirmed the intimation issued by CPC,
Bengaluru by observing in Para 15.4 and 15.5 as under:
15.4 In the above submissions advanced by the appellant, the contention of the appellant is that the entry at column No. 21(f) in the audit report was erroneously made by the Tax Auditor. However, the appellant had not submitted any clarification or rectification from the Tax Auditor in support of his contention and also not filed revised return of income. However the contention of the appellant is not acceptable for the reason that the Tax Auditor made on entry at Column No. 21(f) of the Tax Audit Report that an amount of Rs.17,83,229 was paid by the assessee as an employer not allowable under section 40A(9) of the Income tax However at column No. 9(d) at page NO. 16 of the return of income ("Any sum paid by to assessee as an employer for setting up or as contribution to any fund, trust, company, AOP or BOL or society or any other institution (40A(9)) the assessee mentioned ‘Zero’. The relevant Pages are affixed here as under: …………………………………………………………………………… …………………………………………………………………………… 15.5 Let us see provisions of section 143(1)(iv) which is as under: (iv) disallowance of expenditure indicated in the audit repot but not taken into computing the total income in the return". Hence, this adjustment comes well within the provisions of section 143(1)(iv) of Income Tax Act. It is pertinent to note that the appellant had neither fled a revised audit report nor any submissions from the auditor to substantiate his claim that the error was made by the Tax Auditor in reporting the same.”
Aggrieved, the assessee is in appeal before the Tribunal.
I noted that the assessee is a Proprietor and registered under the provisions of Employees Provident Funds and Miscellaneous
Provisions Act, 1952. As per the provisions of Sec. 40A(9) of the Act,
the same are applicable only in cases where in sum is paid by the :- 5 -: assessee as an employer towards setting up or formation or contribution to any fund, trust, company etc. other than recognized
provident fund, approved superannuation fund and approved gratuity
fund. I am of the view that the provisions of Sec. 40A(9) of the Act are not applicable to the facts of the case, but I also noticed that while
processing the ITR form, the CPC, Bengaluru has picked up an amount of Rs. 17,83,229/- from the tax audit report, where the tax
Auditor has erred in reporting a sum of Rs. 17,83,229/- in para 21(k)
under the head “any sum paid by the assessee as an employer not allowable u/s. 40A(9) of the Act”. The assessee has enclosed copy of challans to substantiate that the assessee is covered under the provisions of the Employees Provident Funds and Miscellaneous
Provisions Act, 1952 and the assessee cannot make liable for payment of tax due to an error committed by its Auditor or Consultant
against the provisions of law. When a query was put to Ld. counsel for the assessee whether the details in regard to the payment of employees share i.e., within the due date of respective statute is available, he referred to Page 72 of assessee’s paper book, wherein
the complete details for an amount of Rs. 17,83,035/- is available. In any case, it cannot be disallowed in the hands of individual assessee
whose share has been taken by employer for deposit in the PF or ESI
under the respective statutes. The law is applicable for the employer :- 6 -: and not for the employee. Hence, I delete the disallowance and allow
the appeal of the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced in the Open Court on 07th of March, 2023. (महावीर िसंह) (Mahavir Singh) उपा"" / Vice President चे"ई/Chennai, "दनांक/Dated: 07-03-2023 EDN/-
आदेश क" "ितिलिप अ"ेिषत/Copy to: 1. अपीलाथ"/Appellant 2. ""थ"/Respondent 3. आयकर आयु"/CIT 4. िवभागीय "ितिनिध/DR 5. गाड" फाईल/GF