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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आयकर अपील�य अ�धकरण, इ�दौर �यायपीठ, इ�दौर
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA No.461/Ind/2017 Assessment Year: 2013-14 M/s M.P. Consultancy ACIT-2(1) बनाम/ Organization Ltd., Bhopal Vs. Block -2, 3rd Floor Paryawas Bhawan, Arera Hills Bhopal (Appellant) (Revenue) PAN: AABCM0090J Appellant by Shri M.K. Sharma, CA Revenue by Smt. Vineeta Dube, Sr. DR Date of Hearing: 21.08.2019 Date of Pronouncement: 13 .09.2019 आदेश / O R D E R PER MANISH BORAD, A.M: This appeal at the instance of Assessee pertaining to A.Y. 2013-14 is directed against the order of Ld. Commissioner of Income Tax(Appeals)-I, Bhopal, (in short ‘CIT(A)’), dated 30.03.2017 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(hereinafter called as the ‘Act’) framed on 23.-2.2016 by ACIT- 2(1), Bhopal.
M.P. Consultancy Organisation Ltd. ITANo.461/Ind/2017 2. Briefly stated facts as culled out from the records are that the assessee is a limited company providing consultancy services & acting as a nodal agency for implementation of various schemes of central & stated Government and other agencies. Total income of Rs.83,16,600/- declared in the income tax return filed on 31.10.2013. Case selected for scrutiny assessment as per CASS, followed by serving of notices u/s 143(2) & 142(1) of the Act. Learned Assessing Officer (in short Ld. AO) after examining the financial statement and various details and considering the submissions of the assessee assessed income at Rs.1,17,71,160/- after making following additions: Income as per return of income Rs.83,16,600/- Add: Disallowance of prior period expenditure Rs.2,79,078/- u/s 37 as per para 1.4 Add: Interest income from Raipur Deposit u/s Rs.35,230/- 56 as per para 2.4 Add: Income u/s 2(24)(x) r.w.s. 36(viia) as per Rs.13,04,862/- para 3.6 Add: Income from Punjab National Bank not Rs.18,35,393/- offered to tax as per para 4.5 Assessed Total Income (Rounded off) Rs.1,17,71,160/-
Aggrieved assessee preferred an appeal before the Ld. CIT(A) but failed to succeed.
Now the assessee is in appeal before the Tribunal raising following grounds of appeal: 1. That on the facts and law and in the circumstances of the case, the Id. CIT (Appeal) has wrongly disallowed prior period
M.P. Consultancy Organisation Ltd. ITANo.461/Ind/2017 expenditure u/s 37 of Rs.2,79,078 without considering the submissions placed on record and wrongly interpreting / ignoring the facts and law. 2. That on the facts and law and in the circumstances of the case, the Id. CIT (Appeal) has wrongly added interest income from Raipur deposit u/s 56 of Rs.35,230 without considering the submissions placed on record and wrongly interpreting / ignoring the facts. 3. That on the facts and law and in the circumstances of the case the ld. CIT (Appeal) has incorrectly not allowed the claim of ESIC /PF u/s 224(x) r.w. S.36(vii)(a) of Rs.13,04,862 without considering the submissions placed on record and wrongly interpreting the law. 4. That on the facts and law and in the circumstances of the case the Id. CIT (Appeal) has incorrectly added income from Punjab National Bank not offered to tax of Rs.18,35,393 without considering the submissions placed on record and wrongly interpreting / ignoring the facts. 5. That on the facts and in the circumstances of the case, the Id. CIT (Appeal) erred in initiating penalty proceeding u/s 271(1)(c), which is not justified. 6. That on the basis of above facts, the assessee creeps to leave, to arch, to argue, to amend any of the grounds of the appeal on or before the date of hearing.”
Apropos to Ground No.1 & 2 relating to disallowance of prior period expenditure of Rs.2,79,078/- and addition for interest u/s 56 of the Act at Rs.35,230/- during the course of hearing no submissions were made by the ld. Counsel for the assessee. No written submissions have been filed. It seems that the assessee is not interested in contesting/pressing these grounds. We, therefore, are of the view that ground No.1 & 2 deserves to be dismissed as not pressed. We accordingly, order so and dismiss the assessee’s ground no.1 & 2.
M.P. Consultancy Organisation Ltd. ITANo.461/Ind/2017 6. Apropos to Ground No.3 relating to disallowance u/s 36(i)(va) of the Act of Rs.13,04,862/- made for delay in deposit of ESIC & PF. Ld. counsel for the assessee submitted that the alleged amount has been paid before the due date of furnishing the return of income. Placing reliance on the judgment of Hon'ble Apex Court in the case of Pr. CIT vs Rajasthan State Beverages Corporation Ltd. (2017) 84 taxmann.com 185 (SC), prayer was made for deleting the disallowance.
Per contra Ld. Departmental Representative (DR) could not controvert the contention made by the Ld. Counsel for the assessee.
We have heard rival contentions and perused the record placed before us. In Ground No.3 the assessee is aggrieved with the finding of Ld. CIT(A) confirming the addition of ESIC & PF of Rs. 13,04,862/- being not paid before the due date as provided in section 36(i)(va) of the Act. It has been submitted before us by Ld. Counsel for the assessee that the alleged amount was paid beyond the due date provided in section 2(24)(x) r.w.s 36(1)(va) but was finally paid before the due date of filing the return of income u/s 139(1) of the Act. Details of the payments are placed in paper book pages 83 to 102. From perusal of the payment details we find that the alleged amount relating to ESIC & PF has been paid before the due date of filing the return of income u/s 139(1) of the Act.
M.P. Consultancy Organisation Ltd. ITANo.461/Ind/2017 9. In the Similar set of facts, we observe that Hon'ble Apex Court confirmed the view taken by Hon'ble High Court of Rajasthan in the case of Rajasthan State Beverages Corporation Ltd. (supra) holding that “if the amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va), whether, it was employees or employer contribution.” SLP filed by the Income Tax Department was dismissed.
We, therefore, respectfully following the above judgment of Hon'ble Supreme Court, are of the considered view since the alleged payment has been paid before the due date of filing return of income. Providing u/s 139(1) of the Act no disallowance was called for towards delay in payment of ESIC & PF at Rs.13,04,862/-. We, therefore, set aside the finding of Ld. CIT(A) and allow ground No.3 raised by the assessee.
Apropos Ground No.4 for the addition of Rs.18,35,393/-, at the outset Ld. counsel for the assessee submitted that there was mismatch between the bills raised by the assessee to Punjab National Bank vis-a-vis the details available in 26AS form for the tax deducted at source and the value of services on which the tax is deducted. But due to lack of reconciliation the alleged amount has been added. Request was made for setting aside the issue to the file of Ld. AO for necessary reconciliation and decide accordingly.
M.P. Consultancy Organisation Ltd. ITANo.461/Ind/2017 12. Ld. DR raised no objection if the issue raised in ground No.4 is sent to the file of Ld. AO for necessary reconciliation.
We have heard rival contentions and perused the record placed before us. In ground no.4 the assessee has challenged the finding of Ld. CIT(A) confirming the addition of Rs.18,35,393/- for the alleged income from Punjab National Bank not offered to tax. We observe that the assessee provide services to Punjab National Bank. The assessee has made a short claim of TDS of Rs.25,390/-. The Ld. counsel for the assessee submitted that the Punjab National Bank has shown wrong amount of credit/payment of Rs.26,51,126/- in form 26AS as against which the bill of Rs.8,15,733/- was raised to PNB by the Assessee and due to this mismatch Ld. AO made the addition. Subsequently, there were some communications with the PNB and the amount has been reconciled.
In these given facts we are of the view that the assessee deserves one more opportunity to provide necessary information along with details of receipt from PNB, in order to prove that there is no mismatch in the records. Ld. AO shall provide necessary opportunity of being heard to the assessee and after examining the records including the reconciliation statement to be filed by the assessee should decide the issue afresh as per the provisions of law. Accordingly, ground No.4 of the assessee’s appeal is allowed for statistical purposes.
M.P. Consultancy Organisation Ltd. ITANo.461/Ind/2017 15. Ground No.5 & 6 are general in nature which needs no adjudication. 16. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order was pronounced in the open court on 13 .09.2019.
Sd/- Sd/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore; �दनांक Dated : 13/09/2019 ctàxÄ? P.S/.�न.स.
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file.
By order Assistant Registrar