GOODWILL TEA & INDUSTRIES LIMITED,JALPAIGURI, WEST BENGAL vs. ACIT, CIRCLE-1(1), JALPAIGURI

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ITA 682/KOL/2026Status: DisposedITAT Kolkata13 August 2026AY 2020-215 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal restored the issue to the Assessing Officer to recompute the taxable income by applying Rule 8(1) of the Income Tax Rules, 1962, after making the disallowance for belated deposit of employee contributions to ESIC.

What were the facts?

The assessee's income tax intimation order included disallowances for bonus paid to employees and delayed deposit of employee contributions to PF/ESI. The assessee's rectification application and subsequent appeal to the CIT(A) were dismissed.

What were the issues?

Whether the disallowance for belated deposit of employee contributions to PF/ESI is correct, and if so, how the taxable income should be computed for a tea company under Rule 8(1).

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 143(1),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH,

Before: SHRI YOGESH KUMAR U.S. & SHRI RAKESH MISHRA

For Appellant: Shri Amber Singh Walia, AR
For Respondent: Shri Ujjawal Mandal, Sr. DR
Hearing: 11.08.2026Pronounced: 13.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No.682/KOL/2026 Assessment Year: 2020-21 Goodwill Tea & Industries Ltd. Vs. ACIT, Circle-1(1), Dinbazar, Jalpaiguri Jalpaiguri West Bengal-735101 [PAN: AABCG1511G] APPELLANT RESPONDENT Appellant by : Shri Amber Singh Walia, AR Respondent by : Shri Ujjawal Mandal, Sr. DR Date of hearing : 11.08.2026 Date of Pronouncement : 13.08.2026 O R D E R PER YOGESH KUMAR U.S., JUDICIAL MEMBER: This Appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeal) (‘Ld. CIT(A)’ for short) dated 12.12.2025, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the Assessment Year 2020-21. 2. Brief facts of the case are that, an intimation Order came to be passed u/s 143(1) of the Act on 18.12.2021 by the CPC by demanding a sum of Rs.37,94,190/- on following two adjustments:- (i) Disallowance of bonus paid to employees amounting to Rs.1,20,74,572/-. (ii) Disallowance of employees’ contributions to Provident Fund (PF) and Employee State Insurance (ESI) amounting to Rs.16,73,030/- on account of delayed deposit under Section 36(1)(va) of the Act.

ITA No.682/Kol/2026 Goodwill Tea & Industries Limited; A.Y: 2020-21 Further, Assessee filed an Application for rectification u/s 154 of the Act to rectify the error apparent from records in the intimation issued u/s 143(1) of the Act. An order u/s 154 r.w.s. 143(1) came to be passed on 18.12.2023 by the CPC by dismissing the Application filed by the Assessee. Aggrieved by the Order dated 18.12.2023, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 12.12.2025, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A), Assessee filed the present Appeal.

3.

The Learned Counsel for the Assessee submitted that the issue involve in the present Appeal is squarely covered by the order of the Tribunal dated 19.05.2023 in the case of M/s. Stewart Holl (India) Limited Vs. Assistant Director of Income Tax, CPC Bangalore in ITA No.362/KOL/2021, wherein the Co-ordinate Bench of the Tribunal, in the similar circumstances considering the business of the Assessee, directed to compute the income of the Assessee making disallowance in respect of late deposit of EPF by the Assessee and then to compute the taxable income by applying Rule 8(1) of the Income Tax Rules, 1962. The Learned Counsel for the Assessee further submitted that Assessee herein also being identically placed, may be extended the parity and direct the Assessing Officer to compute the taxable income by applying Rule 8(1) of the Income Tax Rules, 1962. Thus, sought for allowing the Appeal. Page | 2

ITA No.682/Kol/2026 Goodwill Tea & Industries Limited; A.Y: 2020-21 4. Per contra, the Ld. DR relying on the orders of the Lower Authorities, sought for dismissal of the Appeal.

5.

We have heard the parties and perused the material available on record. At the outset, we find no error or infirmity in the order of the Ld. CIT(A) in following the ratio laid down by the Hon’ble Supreme Court in the case of Checkmate Services Vs. CIT (2022) 143 taxmann.com 178 SC for belated deposit of Employees’ contribution to ESIC. Further, Assessee’s company engaged in the Tea Plantation and Manufacturing business. The Co-ordinate Bench of the Tribunal, in the case of Stewart Holl (India) (supra) in ITA No.362/KOL/2021, wherein Assessee being engaged in the business of Tea growing and manufacturing, directed to compute the taxable income by applying Rule 8(1) of the Income Tax Rules, 1962 in following manners:-

“5. The ld. CIT (Appeals) dismissed the appeal of the assessee by holding that the employees’ contribution to EPF has to be deposited within the time as stipulated under the relevant Act and not within the time allowed under section 139(1) of the Act. The assessee has challenged the said order of ld. CIT(Appeals) before the Tribunal. In the meantime, the Hon’ble Apex Court has decided the issue against the assessee in the case of Checkmate Services Pvt. Limited –vs.- CIT (2022) 143 taxman.com 178 (SC). Now the assessee has raised an additional ground before the Tribunal praying that despite the disallowance of Rs.2,51,10,171/-, the income has to be determined in accordance with the relevant provisions of the Act and Rule 8(1) of the Income Tax Rules, 1962 and assessed accordingly. 6. After hearing the rival contentions, perused the relevant material available on record and the issue raised by the assessee by way of an additional ground, we observe that no further verification of facts is required on this issue as all the facts are available on record, and,

ITA No.682/Kol/2026 Goodwill Tea & Industries Limited; A.Y: 2020-21 therefore, we are inclined to admit the additional ground, which is in accordance with the ratio laid down by the Hon’ble Apex Court in the case of Jute Corporation of India Limited –vs.- CIT reported in (1991) 187 ITR 668 (SC) and National Thermal Power Company Limited –vs.- CIT reported in (1998) 229 ITR 383 (SC). We have perused the Rule 8(1) of the Income Tax Rules, 1962, which deals with the manner of computing the income from cultivation and manufacturing of tea. Sub- Rule (1) provides that “where the income derived from the sale of tea grown and manufactured by the seller in India shall be computed as if it were income derived from business, and forty per cent of such income shall be deemed to be income liable to tax”. Having considered the above Rule, we find merit in the contention of the assessee that the income of the assessee should be computed first after making the disallowance of Rs.2,51,10,171/- and whatever is the resultant income only 40% of that income has to be treated as taxable income in terms of Rule 8(1) of the Income Tax Rules, 1962. Since the issue requires no examination and verification of records, we are, therefore, restoring the issue to the file of ld. Assessing Officer to examine the same to compute the income in terms of our observations as stated above by following the Rule 8(1) of the Income Tax Rules. In other words, the ld. Assessing Officer is directed to compute the income after making disallowance in respect of EPF late deposit by the assessee and then recompute the taxable income by applying Rule 8(1) of the Income Tax Rules, 1962.”

6.

In view of the above by following the orders of the Co-ordinate Bench of the Tribunal, in the case of Stewart Holl (India) (supra) in ITA No.362/KOL/2021, we restore the issue to file of the Assessing Officer to examine and compute the income tax as per Rule 8(1) of the Income Tax Rules, 1962. In other words, the Assessing Officer is directed to compute the income after making disallowance in respect of belated deposit of Employees’ contribution to ESIC and then compute the taxable income by applying Rule 8(1) of the Income Tax Rules, 1962.

ITA No.682/Kol/2026 Goodwill Tea & Industries Limited; A.Y: 2020-21 7. In the result, Appeal of the Assessee is partly allowed for statistical purposes.

Order pronounced on 13.08.2026. Sd/- Sd/- (RAKESH MISHRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13.08.2026 DP, PS Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //TRUE COPY// (MANISH BHOI) DEPUTY REGISTRAR ITAT KOLKATA BENCHES, KOLKATA

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