SANJAY KUMAR AGRAWAL,CUTTACK vs. BBN-C-(4)(8), INCOME TAX OFFICE, CUTTACK

The facts of the case are that the assessee has filed the return of income on 30.09.2019, declaring total income at Rs.100,31,070/-, which was processed u/s.143(1) of the Act vide order dated 14.05.2020, wherein an addition of Rs.66,49,490/- was made u/s.43B of the Act. Against this order the assessee filed an application u/s.154 of the Act before the AO stating that all the payments which were disallowed u/s.43B of the Act were made within the time prescribed under the relevant Acts and copy of challans were also submitted. The CPC vide order passed u/s.154 of the Act dated 03.08.2023 has not accepted the request of the assessee and reaffirm the order passed u/s.143(1) of the Act. Therefore, aggrieved by the action of the CPC, the assessee has preferred the appeal before the ld. CIT(A) NFAC. The CIT(A), NFAC vide order dated 29.04.2024 has dismissed the appeal of the assessee by not accepting the contention of the assessee, thus, the present appeal is filed by the assessee before us.

During the course of hearing, ld. AR submitted that the assessee has shown GST payable at Rs.65,76,707/-, ESI payable of Rs.22,159/- and EPF payable of Rs.50,624/- in its Balance Sheet for the year ended 31.03.2019, wherein all these items were appeared at Schedule V of the Balance Sheet under the title Sundry Creditors & others. The auditor in audit report in column No.26(i) of Form 3CD has certified that these amounts were paid before the due date and date of payments were also mentioned which are as under :-

In support of the payments, ld. AR drew our attention to the copies of challans available in paper book at pages 18 to 20. Ld.AR, thus, submitted that when the payments were made within the due dates prescribed under the relevant Act, and also no violation was made by the assessee, the CPC has wrongly made the disallowance. He further submitted that the ld. CIT(A) while dismissing the appeal of the assessee has wrongly invoked the provisions of Section 36(1)(va) of the Act on the entire amounts payable including GST payable which is not covered under the said Section. Further the employer contribution to PF & ESI were also not covered u/s.36(1)(va) of the Act, therefore, the ld. CIT(A) has not appreciated the facts of the case properly and wrongly applied the judgment of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs. CIT, reported in [2022] 143 taxmann.com 178 (SC). He, therefore, prayed for deletion of addition so sustained by the lower authorities.

On the other hand, ld. Sr. DR supported the order of the lower authorities and submitted that the assessee in the audit report in Form 3CD in the Item at Sl.No.26(ii) has stated that the GST is not passed through profit and loss account and, therefore, provisions of Section 145A of the Act are applicable in the present case and, thus, the disallowance made by the CPC is correct. He further submitted that the assessee has not filed the details in correct column of the audit report, therefore, disallowances were made by the CPC and confirmed by the ld.CIT(A). He,