S FOAM INDIA PVT LTD,DELHI vs. ASSTT. DIRECTOR OF INCOME TAX , CPC, BENGALURU

Assessment Year: 2021-22 S. Foam India Pvt. Ltd., Vs ACIT, 7/18, Kirti Nagar, CPC, Industrial Area, Bengaluru. New Delhi – 110 015. PAN: AAACS2211A (Appellant) (Respondent) Assessee by : Shri Manish Kumar, Advocate Revenue by : Shri Manish Gupta, Sr. DR Date of Hearing : 05.06.2025 Date of Pronouncement : 13.06.2025 ORDER

PER ANUBHAV SHARMA, JM:

1. In the facts and circumstances of the case the CIT Appeal erred in sustaining the disallowance of gratuity liability of Rs 2,51,412/- by CPC Bangalore while processing the return which had in fact been deposited before the due date of return for the year under consideration and consequently claimed on paid basis under section 43B of the Act.

2. The CIT Appeal while sustaining the addition concerning gratuity liability of Rs 2,51,412/- failed to appreciate that in fact the same was paid on or before the due date of return ie on 26.11.2021 but same was inadvertently typed as 26.11.2022 instead of 26.11.2021 in the statement of facts although supporting challan evidencing deposit of the same on 26.11.2021 was on the record of the CIT(A).

3. In the facts and circumstances of the case while sustaining disallowance concerning late deposit of PF and ESI the CIT Appeal failed to appreciate that out of the total disallowance of Rs 1,56,433/- a PF contribution of Rs 80,830/- concerning March 2021 had in fact been deposited before the due date prescribed vide the respective act and the same cannot be subject matter disallowance on account of wrong mentioning of due date as April 2020 instead of April 2021 in the tax audit report which was merely a typographical error.

4. That in the facts and circumstances of the case the CIT Appeal failed to appreciate that out of the total disallowance of Rs 1,56,433/- concerning late deposit of PF and ESI, an amount of Rs 38,242/- had already been disallowed and added in the computation of income by the assesse and hence the PF and ESI disallowance to the extent of Rs 38,242/- had already been suffered double taxation which is legally not tenable.

5. The appellant craves leave to add amend alter or delete any or all the above grounds of appeal during the course of hearing.”

3. On hearing both the sides, we find that grounds No.1 and 5 are general in nature. In regard to grounds No.1 and 2, on hearing ld. representatives of both the sides, we find that variation of Rs.2,51,212/- arises out of gratuity liability and the ld. AR has submitted that the gratuity was deposited before the due date of return and on the basis of the same claim of gratuity expenses have been made u/s 43B of the Act. The ld. AR has pointed towards the fact that in Tax Audit Report it was specifically shown at clause 26B, copy of which is placed at page 62 of the paper book and vide note-9 of the audited financials that the provision for employee benefit gratuity as on 31st March, 2021 and 31st March, 2020 have been shown at Rs.17,03,807/- and Rs.14,52,395/-, giving rise to difference of Rs.2,51,412/- which was, in fact, provision for gratuity concerning the year under consideration. It was submitted that on account of Covid pandemic, the due date of return was extended upto 15th March, 2022 and before that the amount was deposited on 26.11.2021 and, thus, it was submitted that the amount was deposited before the due date of return as extended and it was rightly claimed in the ITR.