BRISK INDIA PVT LTD,PUNE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), PUNE, PUNE

PER SATBEER SINGH GODARA, J.M.

These assessee’s twin appeals I.T.A.Nos.513 & 514/

PUN./2023, for assessment years 2017-2018 and 2018-2019,

arise against the CIT(A), Pune-11, Pune’s DIN & Order nos.

ITBA/APL/S/250/2022-23/1050217639(1) and 1050217263(1), both dated 28.02.2023, in proceedings u/s.143(1) of the

Income Tax Act, 1961 (in short “the Act”).

Heard both the parties. Case files perused.

files and with the able assistance coming from both the sides

2 ITA.Nos.513 & 514/PUN./2023

that this tribunal’s earlier learned coordinate bench’s common

order dated 24.05.2023 had dismissed the instant twin

appeals since raising the sole identical issue of disallowance(s)

of ESI/PF u/sec.36(1)(v)(a) of the Act in light of hon’ble apex

court’s recent landmark decision in Checkmate Services P.

Ltd. & Ors. vs. CIT & Ors. (2022) 448 ITR 518 (SC). The

assessee thereafter appears to have filed it’s as many

miscellaneous applications M.A.Nos.320 and 319/PUN./2023

inter alia, pleading therein that it’s 6th substantive ground in

ITA.No.513/PUN./2023 in assessment year 2017-2018 and 6th

to 10th substantive grounds in ITA.No.514/PUN./2023 in

assessment year 2018-2019 remained un-adjudicated. There

is no dispute between the parties that his tribunal’s as many

order(s); both dated 05.08.2024 in assessee’s M.A.Nos.318 and

319/PUN./2023; appeal-wise; respectively; have recalled the

earlier common order dated 24.05.2023 in very terms.

listed the assessee’s instant twin appeals I.T.A.Nos.513 and

514/PUN./2023 for second round of hearing before us.

to the assessee’s former appeal ITA.No.513/PUN./2023 raising

the following 6th substantive ground :

“The Ld. CIT(A)/CPC erred in not appreciating that the

amount of disallowance is not correctly computed & thus,

3 ITA.Nos.513 & 514/PUN./2023

the disallowance shall be restricted to Rs.3,59,90,202/-

only.”

argument raised before us during the course of hearing is that

although the issue of sec.36(1)(v)(a) ESI/PF disallowance(s)

regarding employees’ contribution; has already gone in

department’s favour in principle as per hon’ble apex court’s

landmark decision in Checkmate Services P. Ltd. & Ors. vs.

CIT & Ors. (2022) 448 ITR 518 (SC); it’s only endeavour herein

is regarding correct quantification since the learned lower

authorities have adopted the corresponding figure as

Rs.3,69,99,417/- than that of the correct sum amounting to

Rs.3,59,90,202/-. Mr. Pathak’s case therefore, is that the

assessee restricts it’s claim only qua the correct quantification

of the impugned disallowance(s) at this stage which has been

wrongly taken as per it’s tax audit report Form-3CA to 3CD

filed by it’s auditor [pages 57 to 69 of the PB].

find that the assessee’s appeal ITA.No.514/PUN./2023 raises

the following 6th to 10th substantive grounds :

“6] The Ld. CIT(A)/CPC ought to have appreciated that an

amount of employer contribution towards PF, ESIC etc. of

Rs.45,27,657/- has also wrongly been reported by tax

auditor in his report and accordingly the same ought not to

4 ITA.Nos.513 & 514/PUN./2023

have been disallowed. The disallowance may be restricted

to employees' contribution towards various funds etc.

7] The Ld. CIT(A)/CPC ought to have appreciated that an

amount of Professional Tax of the employees of

Rs.80,94,525/- is not covered u/s. 36(1)(va) r.w.s. 2(24)(x)

of the Act and accordingly, the same should not be

disallowed merely on the basis of incorrect reporting by

tax auditor.

8] The Ld. CIT(A)/CPC ought to have appreciated that an

amount of Rs.8,93,268/-, being subsidy/contribution from

Govt. towards PF of the employees, is not covered

u/s.36(1)(va) r.w.s. 2(24)(x) of the Act and accordingly, the

same should not be disallowed merely on the basis of

incorrect reporting by tax auditor.

9] The Ld. CIT(A)/CPC erred in making a disallowance of

Rs.1,47,593/- without appreciating that no such

disallowance was warranted on the facts of the case as

the appellant has already disallowed the same in its

return of income.

10] The Ld. CIT(A)/CPC ought to have appreciated that an

amount of Rs.62,60,456/-, being employees' contribution

towards PF/ESIC of the employees was already

disallowed u/s. 36(1)(va) r.w.s. 2(24)(x) of the Act and the

5 ITA.Nos.513 & 514/PUN./2023

same ought not to have been again disallowed u/s. 43B of

the Act merely on the basis of incorrect reporting by tax

auditor.”

has not only filed it’s tax audit report as well as the auditor’s

certificate indicating incorrect declaration in the auditor’s

former report but also it has enclosed herewith the

corresponding correct sum(s) of the challans indicating

employer’s contribution as part of employees’ contribution;

inclusion of professional taxes; government remittances not

forming part of the employees contribution as well as double

disallowance(s)/addition(s) since the said tax audit report had

included the very sums u/sec.43B as well; respectively. Mr.

Pathak reiterates the fact that assessee has already filed on

record the corresponding challans in this latter assessment

year as well.

submits that both the learned lower authorities have gone by

the assessee’s tax audit report(s) only for computing the

impugned disallowance(s) and therefore, we ought to confirm

the same.

foregoing rival submissions in both the impugned assessment

years and find merit in the assessee’s arguments in principle

6 ITA.Nos.513 & 514/PUN./2023

as it seeks to re-compute the impugned disallowance(s) as per

the corresponding actual sums under the prescribed heads

acceding the exact sum(s) of the contribution(s) to be

disallowed as per hon’ble apex court’s recent landmark

decision in Checkmate Services P. Ltd. & Ors. vs. CIT & Ors.

(supra). We thus deem it as a fit case to restore back these

twin appeals back to the learned Assessing Officer to be

examined afresh in very terms, preferably within three effective

opportunities of hearing, subject to the rider that it shall be

the taxpayer’s onus and responsibility only to plead and prove

all the relevant facts in consequential proceedings. Ordered

accordingly.

514/PUN./2023 are allowed for statistical purposes in above

terms. A copy of this common order be placed in the respective

case files.

Order pronounced in the open Court on 10.10.2024.

Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER

Pune, Dated 10th October, 2024

VBP/-

7 ITA.Nos.513 & 514/PUN./2023

Copy to

//By Order// //True Copy //

Sr. Private Secretary, ITAT, Pune Benches, Pune.