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Facts
The assessee filed its return declaring income of ₹80,81,670/-. An adjustment of ₹7,41,962/- was made for delayed deposit of employee's contribution to PF and ESIC. The assessee contended that a significant portion of this was already disallowed in the return.
Held
The Tribunal noted that the CIT(A) had not adequately dealt with the assessee's contention about the prior disallowance. The Tribunal set aside the order to the extent of the disputed adjustment and restored the matter to the Assessing Officer for re-examination.
Key Issues
Whether the CIT(A) properly considered the assessee's claim of prior disallowance in the original return regarding delayed employee contributions to PF and ESIC.
Sections Cited
143(1), 36(1)(va), 143(1)(a)(iv)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
This appeal by the assessee is directed against order dated 19.02.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – 1,Kolkata [in short ‘the Ld. CIT(A)’] for assessment year 2022-23, raising following grounds:
1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE MADE IN THE SUM OF Rs.492506/- AND Precise Industrial Solutions Pvt. Ltd 2 ALLOWED ONLY THE SUM OF Rs 249236/-AS AGAINST THE CLAIM OF APPELLANT RS 741962/- IN RESPECT OF DISALLOWANCE OF DELAYED PAYMENOF CONTRIBUTION TO PF & ESIC FUND 2. Briefly stated, the facts of the case are that the assessee filed its original return of income on 07.10.2022, declaring a total income of ₹80,81,670/-. The said return was processed under Section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), whereby an adjustment of ₹7,41,962/- was made to the returned income on account of the delayed deposit of employees' contribution to Provident Fund (PF) and Employees’ State Insurance Corporation (ESIC). Aggrieved by the said adjustment, the assessee preferred an appeal before the ld.CIT(A), contending that out of the disallowance of ₹7,41,962/-, a sum of ₹6,57,786/- had already been voluntarily disallowed and added back while computing the total income in the Income Tax Return (ITR). In support of the claim, the assessee placed reliance upon the ITR Form and pointed out that an amount of ₹6,79,661/- was duly added back under Point No. 8 of Schedule BP. It was further submitted that although this figure had been disclosed under Clause 11(b) of the ‘Other Information’ (OI) schedule, it ought to have been correctly reported under Clause 6(k). As regards the balance amount of ₹74,169/-, the assessee candidly admitted that although the due date for deposit was 15.04.2022, the remittance was inadvertently made on 19.04.2022. To this extent, the assessee
Precise Industrial Solutions Pvt. Ltd 3 accepted the disallowance and the consequential tax liability thereon.
2.1 The learned CIT(A), upon consideration of the submissions and the material on record, allowed partial relief to the assessee to the extent of ₹2,49,436/- but on altogether different reasoning and sustained the disallowance in respect of the remaining amount of ₹4,92,526/-. The relevant finding of the Ld. CIT(A) is reproduced as under:
“H 9] As per the above discussion, I find that PF & ESI of the following amounts were added by the CPC for late deposit as per the Tax Audit Report as reported in Para C above, but these fall within the above period from 15/03/2020 upto 02/10/2021. The details are as under:- P F late deposit during Covid Period :- Due Date SI. Amount Actual date of No. (Rs.) payment 1 81,507 15/05/2021 08/06/2021 2 82,352 15/06/2021 05/07/2021 3 81,287 15/07/2021 31/07/2021
Total 2,45,146 ESI late deposit during Covid Period :- Due Date SI. Amount Actual date of No. (Rs.) payment Precise Industrial Solutions Pvt. Ltd 4 14 2,152 15/06/2021 02/07/2021 15 2,138 15/07/2021 03/08/2021
Total 4,290 The total of the above two cases is Rs. 2,49,436/-. The above amount of Rs 2,49,436/- can’t be treated as late deposit when the due dates are extended. The Balance comes to Rs 4,92,526/- is confirmed. The amount of Rs 2,49,436/- of PF is allowable as the same was deposited within the extended period due to Covid Pandemic as per the PF Circular. Hence, the Grounds No 1 & 2 are PARTLY ALLOWED and the Ld AO is directed to delete the Addition of Rs 2,49,436/- and the addition of Rs 4,92,526/- u/s 36(1)(va) r w s 143(1)(a)(iv) is confirmed.”
We have heard the rival submissions advanced by the parties and carefully perused the material placed on record. On a thoughtful consideration of the matter, it emerges that the ld. ‘CIT(A)’ has not adequately dealt with the specific contention raised by the assessee, namely, that out of the total adjustment of ₹7,41,962/- made towards the delayed deposit of employees’ contribution to PF and ESIC, a sum of ₹6,79,661/- had already been offered for disallowance in the return of income filed by the assessee. Before us, learned counsel appearing on behalf of the assessee has fairly submitted that the matter may be remanded to the file of the Assessing Officer for the limited purpose of re- verifying the aforesaid claim. Having regard to the facts and circumstances of the case, and in the interest of substantial justice,
Precise Industrial Solutions Pvt. Ltd 5 we are of the considered opinion that it would be appropriate to set aside the impugned order to the extent of the disputed adjustment and restore the matter to the file of the Assessing Officer. The Assessing Officer shall re-examine the veracity of the assessee’s claim that a sum of ₹6,79,661/- had already been disallowed in the return of income and thereafter decide the issue afresh, strictly in accordance with law, after affording due opportunity of hearing to the assessee. The grounds of appeal of the assessee are accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.