B.E.BILLIMORIA & COMPANY LIMITED,MUMBAI vs. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), MUMBAI
What did the Tribunal hold?
The Tribunal restored the issue of Section 14A disallowance to the Assessing Officer for verification of double disallowance. The disallowance for delayed ESI/PF payment was upheld following the Supreme Court's decision in Checkmate Services P. Ltd.
What were the facts?
The assessee's return of income was selected for scrutiny. The Assessing Officer made disallowances under Section 14A r.w.r. 8D and for delayed payment of ESI/PF. The CIT(A) upheld these disallowances.
What were the issues?
Whether the disallowance under Section 14A was made twice, and whether delayed ESI/PF payments are disallowable under Section 36(1)(va).
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI ABY T VARKEY & SHRI OM PRAKASH KANT
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 29.09.2022 passed by the Ld. Commissioner of Income-tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: 1. The Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, has erred in confirming the disallowance of ₹ 1,26.047/- u/s 144 r.w.r 8D ignoring the B.E. Billimoria & Company Ltd. B.E. Billimoria & Company Ltd. 2 ITA No. 2788/M/2022 fact that the same is already disallowed in the Computation fact that the same is already disallowed in the Computation fact that the same is already disallowed in the Computation of Income, resulting same disallowance made twice. of Income, resulting same disallowance made twice. of Income, resulting same disallowance made twice.
2. The Ld. Commissioner of Income Tax (Appeals), National Commissioner of Income Tax (Appeals), National Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, has erred in disallowing Faceless Appeal Centre, Delhi, has erred in disallowing Faceless Appeal Centre, Delhi, has erred in disallowing Employee Provident Fund & ESI amounts of Rs 83,06,053/ ee Provident Fund & ESI amounts of Rs 83,06,053/- ee Provident Fund & ESI amounts of Rs 83,06,053/ on ground that the amounts were not paid within the due on ground that the amounts were not paid within the due on ground that the amounts were not paid within the due dates under the respective Act, in spite of the fact that the dates under the respective Act, in spite of the fact that the dates under the respective Act, in spite of the fact that the amounts were paid before the due date of filing of the tax amounts were paid before the due date of filing of the tax amounts were paid before the due date of filing of the tax return u/s 139 of the Income return u/s 139 of the Income Tax Act, 1961.
Briefly stated, facts of the case are that the assessee filed Briefly stated, facts of the case are that the assessee filed Briefly stated, facts of the case are that the assessee filed return of income declaring total loss of return of income declaring total loss of ₹1,14,98,11,690/ 1,14,98,11,690/-. The return of income filed by the assessee was selected for scrutiny and return of income filed by the assessee was selected for scrutiny and return of income filed by the assessee was selected for scrutiny and disallowance u/s 14A of the Income disallowance u/s 14A of the Income-tax Act, 1961 (in short ‘the tax Act, 1961 (in short ‘the Act’) r.w.r. 8D amounting to ₹1,26,047/- and for delayed payment Act’) r.w.r. 8D amounting to and for delayed payment of ESI/PF of ₹83,06,053/ 83,06,053/- u/s 36(1)(va) of the Act was made by the va) of the Act was made by the Assessing Officer. On further appeal, the Ld. CIT(A) upheld the Assessing Officer. On further appeal, the Ld. CIT(A) upheld the Assessing Officer. On further appeal, the Ld. CIT(A) upheld the disallowance. Aggrieved, the assessee is in appeal before the disallowance. Aggrieved, the assessee is in appeal before the disallowance. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. Tribunal raising the grounds as reproduced above.
We have heard rival submission of the parties We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. As far as dispute and perused the relevant material on record. As far as dispute and perused the relevant material on record. As far as ground No. 1 of the appeal is concerned ground No. 1 of the appeal is concerned, in the ground it is in the ground it is submitted that disallowance of submitted that disallowance of ₹1,26,047/- u/s 14A r.w.r. 8D was u/s 14A r.w.r. 8D was also disallowed in the computation of the income a also disallowed in the computation of the income and therefore, it is nd therefore, it is double disallowance. Since, this is a mat double disallowance. Since, this is a matter of verification ter of verification therefore, we restore this issue to the file of the Assessing Officer for verifying we restore this issue to the file of the Assessing Officer for verifying we restore this issue to the file of the Assessing Officer for verifying
B.E. Billimoria & Company Ltd. B.E. Billimoria & Company Ltd. 3 ITA No. 2788/M/2022 and decide accordingly. The ground is allowed for statistical and decide accordingly. The ground is allowed for and decide accordingly. The ground is allowed for purposes. 3.1 As far as ground No. 2 of the appeal is concerned the Hon’ble nd No. 2 of the appeal is concerned the Hon’ble nd No. 2 of the appeal is concerned the Hon’ble Supreme Court in the case of Checkmate Services Checkmate Services P. Ltd. v. Supreme Court in the case of Commissioner of Income Commissioner of Income-tax –I in Civil Appeal No. 2833 of I in Civil Appeal No. 2833 of 2016 in decision dated 12th October, 2022 has he 2016 in decision dated 12 held that delayed payment of ESI/PF are payment of ESI/PF are liable for disallowance in terms of section in terms of section 36(1)(va) of the Act. Respectfully following the finding of Hon’ble Respectfully following the finding of Hon’ble Supreme Court (supra), Supreme Court (supra), the disallowance made by the Ld. CIT(A) on the disallowance made by the Ld. CIT(A) on the issue-in-dispute is upheld. dispute is upheld.
In the result, the appeal filed by the ass In the result, the appeal filed by the assessee is partly allowed essee is partly allowed for statistical purposes. for statistical purposes.
Order pronounced Order pronounced under Rule 34(4) of the ITAT Rules, under Rule 34(4) of the ITAT Rules, 1963 on 29/12/2022. /2022. Sd/- Sd/- (ABY T VARKEY ABY T VARKEY) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 29/12/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to :
1. 1. The Appellant 2. The Respondent.
3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai
B.E. Billimoria & Company Ltd. B.E. Billimoria & Company Ltd. 4 ITA No. 2788/M/2022
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