AI CHAMPDANY INDUSTRIES LTD.,KOLKATA vs. D.C.I.T., CIRCLE - 1(1), KOLKATA, KOLKATA

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ITA 1182/KOL/2024Status: DisposedITAT Kolkata30 October 2026AY 2020-20214 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition made by the CPC under Section 143(1) was invalid. The Tribunal noted that the intimation under Section 143(1) was passed on February 14, 2021, while the Supreme Court's decision in Checkmate Services Pvt. Ltd. Vs. CIT was pronounced on October 12, 2022. Therefore, as on the date of processing, the Supreme Court's decision was not available. The Tribunal found that the assessee's claim was in accordance with the provisions of the Act as applicable at the relevant time. Furthermore, the Tribunal referred to a co-ordinate bench decision in Dozco (India) Pvt. Ltd. Vs. DCIT, which quashed a similar addition made in an intimation under Section 143(1) on the ground that the issue was debatable and such debatable issues are not permissible for adjustment in an intimation. The Tribunal also cited the Chandigarh High Court's decision in Raj Kumar Bothra. Consequently, the Tribunal set aside the order of the CIT(A) and directed the Assessing Officer (AO) to delete the addition of ₹3,55,06,844/-. Ground no. 1 was allowed.

What were the facts?

The assessee, AI Champdany Industries Ltd., filed its return of income for Assessment Year 2020-21 on February 14, 2021, declaring 'nil' income. The Central Processing Centre (CPC) processed the return under Section 143(1) of the Income Tax Act, 1961, and made an addition of ₹3,55,06,844/- on account of employees' contribution to Provident Fund (PF) and Employees' State Insurance (ESI). The CPC invoked Section 36(1)(va) of the Act, disregarding the assessee's claim that the contributions were deposited within the due date for filing the return of income. The assessee appealed to the Commissioner of Income-tax (Appeals) [CIT(A)], who confirmed the addition by relying on the decision in Checkmate Services Vs. CIT. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition of ₹3,55,06,844/- on account of employees' contribution to PF and ESI, made by the CPC under Section 143(1) of the Income Tax Act, 1961, is valid, considering the assessee's contention that the amounts were deposited within the due date for filing the return of income. Assessee's Contention: The assessee argued that the addition was made without considering that the employees' contribution to PF and ESI was deposited within the due date of filing the return of income. The assessee relied on the decision of a co-ordinate bench in Dozco (India) Pvt. Ltd. Vs. DCIT and the decision of the Chandigarh High Court in Raj Kumar Bothra. Revenue's Contention: The revenue, through the DCIT, Circle 1(1), Kolkata, supported the addition made by the CPC and confirmed by the CIT(A). The revenue relied on the decision of the Hon'ble Supreme Court in Checkmate Services Vs. CIT.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Siddharth Agarwal, AR
For Respondent: Shri Haridas Rajkumar, DR
Hearing: 01.10.2026Pronounced: 30.10.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Addl/ JCIT(A)-1, Bengaluru(hereinafter referred to as the “Ld. CIT(A)”] dated 25.03.2024 for the AY 2020-21.

2.

The issue raised in ground no.1 is against the order of Ld. CIT (A) confirming the addition of ₹3,55,06,844/- as made by the Ld. AO / CPC on account of employees contribution to PF and ESI.

3.

The assessee filed the return of income on 14.02.2021, showing income at ₹nil, which was processed u/s 143(1) of

ITA No. 1182/KOL/2024 AI Champdany Industries Ltd.; A.Y. 2020-21 the Act. In the said intimation, the CPC added back a sum of ₹355,06,844/- on account of employees contribution to PF and ESI were invoking the provisions of Section 36(1)(va) of the Act without considering the fact that the same has been deposited within the due date of filing the return of income.

4.

In the appellate proceedings, the Ld. CIT (A) confirmed the addition by following the decision of Checkmate services Vs. CIT (2022) 44 ITR 518 (SC).

4.1. After hearing the rival contentions and perusing the materials available on record, we find that the intimation in this case has been passed on 14.02.2021, whereas the decision has been passed by the Hon'ble Supreme Court in case of Checkmate Services Pvt. Ltd. Vs. CIT (supra) on 12.10.2022. Therefore, as on the date of processing the return the decision of the Hon'ble Supreme Court was not available for the guidance of the assessee and therefore, it was possible to follow the said decision. In our opinion, the claim of the assessee has been in accordance with the provisions of the Act as applicable at the relevant point of time. Moreover, the case is squarely covered by the co- ordinate bench in case of Dozco (India) Pvt. LtdVs. DCIT, in ITA No. 2418/KOL/2025, vide order dated 16.09.2026 and also further squarely covered by the decision of Hon'ble Chandigarh High Court in case of Raj Kumar Bothra TAXC No 56 of 2025.For the sake of ready reference, we extract the operative part of the decision of the co-ordinate Bench as under:- Page 2 of 4

ITA No. 1182/KOL/2024 AI Champdany Industries Ltd.; A.Y. 2020-21 “5. We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the issue in the decision of Hon’ble Supreme Court in the case of Checkmate Services (P) Ltd. vs. CIT is now under fresh consideration before Hon’ble Supreme Court in the case of Woodland (Aero Club) Pvt. Ltd. v. ACIT referred to supra and the Hon’ble Supreme Court has also considered various decisions. Admittedly the issue is a debatable issue in the present scenario. This being so, as a debatable issue is not permissible in an adjustment made in an intimation issued u/s 143(1) by the CPC. The CPC has taken the issue of PF & ESI contribution in respect of employees, the intimation issued u/s 143(1) dated 02.06.2025 stands quashed as the issue being debatable. Liberty is however granted to the revenue to initiate proceedings within the purview of the Income Tax Act in accordance with law. 6. In the result, the appeal of the assessee stands allowed.” 4.1.1. Therefore, we are inclined to set aside the order of Ld. CIT (A) and direct the Ld. AO to delete the addition of ₹355,06,844/-. The ground no.1 is allowed. Ground no.1 is allowed.

5.

Ground no.2 is not pressed and therefore, ground no.2 is dismissed as not pressed.

6.

In the result, the appeal of the assessee is partly allowed.

Order pronounced on 30.10.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 30.10.2026 Sudip Sarkar, Sr.PS

Page 3 of 4

ITA No. 1182/KOL/2024 AI Champdany Industries Ltd.; A.Y. 2020-21

Copy of the Order forwarded to: 1. The Appellant Sudip Digitally signed by Sudip Sarkar 2. The Respondent Date: Sarkar 3. CIT 2026.10.30 DR, ITAT, 09:31:29 +05'30' 4. 5. Guard file. BY ORDER, True Copy//

Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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