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Facts
The assessee appealed against the order of the CIT(A) which upheld the disallowance of delayed payments of employee contributions to PF and ESIC for AY 2018-19. The CIT(A) relied on the Supreme Court decision in Checkmate Services Pvt. Ltd.
Held
The Tribunal noted that the assessment order u/s 143(1)(a) did not clearly specify under which sub-section the adjustment for delayed PF and ESIC payments was made. Finding a lack of clear reasoning, the Tribunal set aside the order.
Key Issues
Whether the adjustment made under section 143(1)(a) for delayed PF and ESIC payments was correctly substantiated with clear reasoning.
Sections Cited
143(1), 143(1)(a), 43B, 36(1)(va)
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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
ORDER PER OM PRAKASH KANT, AM
This appeal has been preferred by the assessee against the order dated 03.10.2024 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – 2, Delhi [hereinafter shall be referred as ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
1. Learned CIT(A) has erred on facts and circumstances of the case Learned CIT(A) has erred on facts and circumstances of the case Learned CIT(A) has erred on facts and circumstances of the case in holding amendment to 43B and 36(1)(va) are retrospective in holding amendment to 43B and 36(1)(va) are retrospective in holding amendment to 43B and 36(1)(va) are retrospective while confirming addition / adjustment of Rs. 11,54,887/ confirming addition / adjustment of Rs. 11,54,887/- & 163256/- made by CPC, Bangalore on account of delayed deposit of made by CPC, Bangalore on account of delayed deposit of made by CPC, Bangalore on account of delayed deposit of employee's contribution to PF & ESIC respectively. employee's contribution to PF & ESIC respectively.
2. Learned CIT(A) has erred on facts and circumstances of the case 2. Learned CIT(A) has erred on facts and circumstances of the case 2. Learned CIT(A) has erred on facts and circumstances of the case in holding d in holding debatable issues can be subjected to addition/ ebatable issues can be subjected to addition/ adjustment while processing of ROl for issue of intimation u/s adjustment while processing of ROl for issue of intimation u/s adjustment while processing of ROl for issue of intimation u/s 143(1) even for assessment years prior to A Y 2021 143(1) even for assessment years prior to A Y 2021-22 overlooking 22 overlooking amendment was brought only by Finance Act 2021 amendment was brought only by Finance Act 2021 w.e.f 01-04- 2021.
The ground No. 2 of the appeal was not pressed on behalf of . 2 of the appeal was not pressed on behalf of . 2 of the appeal was not pressed on behalf of the assessee and therefore, same is dismissed as infructuous. the assessee and therefore, same is dismissed as infructuous. the assessee and therefore, same is dismissed as infructuous.
2.1 As far as ground No. 1 of the appeal is concerned, the assessee As far as ground No. 1 of the appeal is concerned, the assessee As far as ground No. 1 of the appeal is concerned, the assessee aggrieved with the disallowance of employees contribution to the with the disallowance of employees contribution to the with the disallowance of employees contribution to the provident fund (PF) and employee estate insurance corporate (ESIC) and employee estate insurance corporate (ESIC) and employee estate insurance corporate (ESIC) which has been upheld by the Ld. CIT(A) following the decision of which has been upheld by the Ld. CIT(A) following the decision of which has been upheld by the Ld. CIT(A) following the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. the Hon’ble Supreme Court in the case of Checkmate Services Pvt. the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. 143 taxmann.com 178 (SC). Before us, the Ld. counsel of the d. 143 taxmann.com 178 (SC). Before us, the Ld. counsel of the d. 143 taxmann.com 178 (SC). Before us, the Ld. counsel of the assessee however relied on the decision of the Hon’ble High Court of assessee however relied on the decision of the Hon’ble High Court of assessee however relied on the decision of the Hon’ble High Court of Chhattisgarh in the case of Raj Kumar Bothra v. DCIT TAXC No. 56 Chhattisgarh in the case of Raj Kumar Bothra v. DCIT TAXC No. 56 Chhattisgarh in the case of Raj Kumar Bothra v. DCIT TAXC No. 56 of 2025.
We have heard rival submission and perused the relevant 3. We have heard rival submission and perused the 3. We have heard rival submission and perused the material on record. We have seen the impugned order u/s 143(1)(a) material on record. We have seen the impugned order u/s 143(1)(a) material on record. We have seen the impugned order u/s 143(1)(a) of the Income-tax Act, 1961( In short the Act). In said order, we are tax Act, 1961( In short the Act). In said order, we are tax Act, 1961( In short the Act). In said order, we are not able to find under which particular sub section adjustment has not able to find under which particular sub section adjustment has not able to find under which particular sub section adjustment has been made, particularly , for payment of PF been made, particularly , for payment of PF and ESCI beyond the and ESCI beyond the period provided u/s 43B of the Act or beyond the period provided period provided u/s 43B of the Act or beyond the period provided period provided u/s 43B of the Act or beyond the period provided under section 36(1)(va) of the Act. under section 36(1)(va) of the Act. In absence of this primary of this primary finding of fact, we feel it appropriate to setaside the order passed finding of fact, we feel it appropriate to setaside the order passed finding of fact, we feel it appropriate to setaside the order passed u/s 143(1) of the Act to the file of u/s 143(1) of the Act to the file of the Assessing officer to pass a the Assessing officer to pass a fresh speaking order in accordance with law with clear reasoning fresh speaking order in accordance with law with clear reasoning fresh speaking order in accordance with law with clear reasoning for the adjustment. Accordingly, the grounds for the adjustment. Accordingly, the grounds of appeal of the of appeal of the assessee are allowed for statistical purposes. allowed for statistical purposes.
In the result, the appeal of the assessee is In the result, the appeal of the assessee is In the result, the appeal of the assessee is allowed for statistical purposes.