AKASH DILIP KABULE,SHIRWAL SATARA vs. ADIT, BENGALURU

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.378/PUN/2026 िनधा�रण वष� / Assessment Year : 2021-22 Akash Dilip Kabule, Vs. ADIT, CPC, Bengaluru. Shivalay, Kedareshwar Master, Khandala, Shirwal, Satara- 412801. PAN : DNUPK8470G Appellant Respondent Assessee by : Shri Rajkumar Doshi Revenue by Shri Rajesh Haladkar : Date of hearing : 16.07.2026 Date of pronouncement : 28.07.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 24.11.2025 passed by Ld. Addl./JCIT(A)-2, Bengaluru [‘Ld. CIT(A)’] for the assessment year 2021-22. 2. The appellant has raised the following grounds of appeal :- “1. Limitation and Delay Condonation: a. Dismissal of appeal for limitation without appreciating the facts and circumstances placed quashes the right of an opportunity of being heard and hence falls beyond the principles of natural justice. b. The reasons accorded for dismissal of the appeal was that the intimation was allegedly issued on 21.11.2022 on the email and by post however, the email stated in Order in Appeal neither belongs to the appellant, nor was under the direct or indirect control of the appellant.

2 ITA No.378/PUN/2026 c. The appellant was made aware of the intimation and also the adjustment only when he received the demand notice for the AY 2021-22 bearing no. ITBA/RCV/F/17/2025- 26/1078850580(1) on 24/07/2025. It was then the appellant got to know about the intimation and adjustment of the refunds for the further periods. Thus, the appellant had sufficient grounds for the alleged delay and therefore, the OIA is bad in law. 2. Section 36 allowances are not disallowances without visiting section 37: a. Section 36 of the Income Tax Act, 1961 (mentioned as 'Act' in brief) titled Other Deductions provides for specific allowances of expenditures as deduction in computing the income of the assessee under section 28 of the Act. It doesn't speak of 'Disallowance'. Therefore, the non-eligibility of any expenditure under the said section cannot disallow the expenditure as a whole without subjecting the same to the test of the provisions of other sections of the Act for allowing the expenditure as deduction while computing the income under section 28 of the Act. b. In the instant case, the alleged failure to deposit the contributions under EPF/ESI within statutory due dates, though beyond the purview of the allowance under section 36(1)(va) of the Act, the same cannot be disallowed in entirety without subjecting it to the test of section 37 of the Act titled 'General Deductions'. c. Further, the section 37 deductions are generic and of larger import. In the instant case, the contributions were made allegedly beyond the statutory due dates, the same were made during the Financial Year and were necessary for the continuance of the business of the appellant. 3. Miscalculation of the due dates and requirement of mens rea for failure to deposit the contributions: a. Especially in the light of the measures to deal with COVID-19 and Other Circulars. b. The Circular no.Circular no EPF/Cir./C-I/Misc/2020- 21/Vol.1/1112 dated 15.05.2020 issued by the EPFO specifically states no damages to be paid during the period of lock downs. The remedy from the lockdowns were provided by the Government without specifying the dates but mentioning the delays during lockdowns as lacking mens rea and therefore, no damages to be payable. The reading of the said circular clearly interprets as extension of the due dates due to the mere

3 ITA No.378/PUN/2026 fact that no liability existed if the statutory due dates were exceeded. Therefore, for the period of FY 2020-21, the due dates were not effective. c. In the instant case, the alleged delay was not actually a delay but deferment of the payments as per statutory allowance for the same. The payments were made within the same financial year itself. Hence, the expense must be allowed. d. The Assessment Officer as well as the First Appellate Authority both, failed to appreciate the facts of the case. For the reasons above and others we pray: Prayer: 1. The Order-in-Appeal be set aside with consequential relief. 2. Any other order as your lordships deem fit. 3. The Appeal may be allowed to be amended from time to time. 4. A personal hearing may kindly be granted. 5. Ground of Appeal/s or a contention/s (including new grounds/contentions) may be allowed to be raised /deleted.” 3. The appellant has also raised the following additional grounds of appeal :- “1. The learned Commissioner of Income Tax (Appeals) erred in law as well as fact in conforming the disallowance made by the learned CPC while processing the return under Section 143(1)(a) of the Income-tax Act, 1961 as the adjustment is beyond the scope permissible under Section 143(1)(a), and the order thus, is bad in law and liable to be deleted. 2. The Appellant prays your Honor to allow the deduction considering amendment in clause 29 of the Finance Act 2026 (equivalent to 36(1)(va) of Income Tax Act 1961) relating to deposit of statutory dues within the due date of filling of return of income, the said amendment being made as ease of living measure (to remove hardship) and is thus retrospective in nature as held in various judicial pronouncements.”

4 ITA No.378/PUN/2026 4. Facts of the case, in brief, are that the assessee is an individual engaged in the business of supply of manpower and recruitment agency services and has furnished his return of income on 15.12.2021 (within the extended time period) declaring an income of Rs.11,57,980/-. CPC vide intimation u/s 143(1) of the IT Act order dated 21.11.2022 processed the return by determining income of Rs.52,40,340/- as against income of Rs.11,57,980/-. The above processed income includes addition of Rs.40,82,366/- being disallowance u/s 36(1)(va) of the IT Act regarding belated payment of Employees’ Contribution to PF/ ESI. 5. Being aggrieved with the above intimation order dated 21.11.2022, the assessee preferred an appeal before Ld. CIT(A). Since the appeal was filed before Ld. CIT(A) belatedly i.e. with a delay of 967 days, Ld. CIT(A) dismissed the appeal filed by the assessee on the ground of delay without admitting the same by observing as under :- “4.2.3 For these reasons, the delay of 967 days in filing of appeal in this case is not condoned as no “sufficient cause” has been shown u/s. 249(3) of the Income Tax Act, 1961 for the appellant’s failure to file the appeal within the prescribed period of limitation us.249(2) of the Income Tax Act, 1961 read with section 5 of Limitation Act and hence the appeal sought to be instituted belatedly is hereby rejected. 4.2.4 In the result, as delay in filing of appeal is not condoned, the appeal is not admitted and is rejected accordingly.”

5 ITA No.378/PUN/2026 6. However, in its order in para no.4.4, Ld. CIT(A) has mentioned that the appeal is dismissed both on the ground of limitation as well as on merits. 7. It is the above order against which the assessee is in appeal before this Tribunal. 8. We have heard Ld. Counsels from both sides and perused the material available on record including the paper book and copy of case laws furnished by the assessee. In this regard, we find that admittedly the appeal before Ld. CIT(A) was furnished with delay of 967 days and therefore, the appeal was dismissed without condoning the delay. We also find that Ld. CIT(A) has not provided any opportunity of hearing to the assessee in this regard and it appears that Ld. CIT(A) has only discussed the merits of the case on the basis of Form 35 Appeal Memo, statement of facts, grounds of appeal and on the basis of intimation order passed by CPC. We further find that the assessee has raised additional grounds before us which could not be raised before Ld. CIT(A) since no opportunity of hearing was provided by Ld. CIT(A) to the assessee. It is also the contention of the assessee that the impugned intimation order was not received by the assessee since it was not available to download from the income tax portal and it

6 ITA No.378/PUN/2026 was received subsequently from the Jurisdictional Assessing Officer on 02.09.2025 and thereafter the appeal was furnished before Ld. CIT(A) which caused a delay of 967 days. Accordingly, it was requested by Ld. Counsel of the assessee that the appeal may kindly be allowed by deciding additional grounds or alternatively it was requested to restore the matter back to the file of Ld. CIT(A) to decide the issue afresh on all the grounds including additional grounds raised by the assessee before the Bench. 9. Considering the totality of the facts of the case and in the interest of justice and without going into merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT(A) and restore the matter back to the file of Ld. CIT(A) with a direction to condone the delay and decide the appeal afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A) in this regard and to produce relevant documents, submissions and additional evidences, if any, in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A) shall be at liberty to pass appropriate orders as per law. The assessee is also permitted to

7 ITA No.378/PUN/2026 raise additional grounds before Ld. CIT(A). Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 28th day of July, 2026. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 28th July, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.07.28 14:55:10 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Addl./JCIT(A)-2, Bengaluru. 4. The Pr. CIT/CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.