M/S. MEREMMA BASAVARAJ BELLI,MUMBAI vs. ADIT CPC, MUMBAI

PDF · subscribers
ITA 1489/MUM/2021Status: DisposedITAT Mumbai29 April 2022AY 2019-202 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CPC had no jurisdiction to make the adjustment under section 143(1) as there were favorable High Court decisions prior to the amendment. Furthermore, the amendment by the Finance Act, 2021, was not retrospective, and the assessment year in question predated it.

What were the facts?

The assessee's appeal concerns the disallowance of EPF and ESI contributions. This disallowance was made by the CPC under section 143(1) and confirmed by the NFAC.

What were the issues?

Whether the CPC had the jurisdiction to disallow EPF/ESI contributions under section 143(1) when there were favorable judicial precedents. Whether the amendment by the Finance Act, 2021, regarding EPF/ESI contributions was retrospective.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “SMC” Bench, Mumbai

For Appellant: Shri Devendra Jain
For Respondent: Ms. Usha Gaikwad
Hearing: 28.04.2022Pronounced: 29.04.2022

This appeal by the assessee is directed against the order of learned CIT(A) dated 24.6.2921 pertains to A.Y. 2019-20.

2.

The solitary issue in dispute is disallowance of EPF and ESI contribution under section 36(1)(va) of the I.T. Act by the CPC, Bangaluru adjustment under section 143(1) and confirmed by NFAC.

3.

Against this order the assessee is in appeal before the ITAT.

4.

I have heard both the parties and perused the record. I find that prior to the amendment there were Hon'ble Bombay High Court decision in CIT Vs. Ghatge Patil Transport Pvt. Ltd. (ITA No. 1002 of 2012 order dated 14.10.2014 following Hon'ble Supreme Court decision in Alom Extrusions Ltd. (319 ITR 306) which laid down that deposits of the sum up to the date of filing of return is sufficient compliance. The Finance Act, 2021 has provided an explanation in this regard for the disallowance of the sum which is paid after the due date. When this fact is taken into account by no stretch of imagination it can said that the above said adjustment can fall under the category of 143(1) prima-

2 M/s. Meremma Basavaraj Belli facie adjustment. Hence, I hold that CPC has no jurisdiction of adjustment u/s. 143(1) on this issue where admittedly there were decisions in favour of the assessee from the Hon’ble High Courts and the legislature has brought in an Explanation by Finance Act, 2021 in this regard subsequently. Moreover, as regards, merits of the case the aforesaid explanation was added by Finance Act, 2021 and the said explanation in my considered opinion cannot be said to be retrospective. The assessment year during the present case is AY 2018-19 and is prior to the said amendment/insertion. Hence, on merits also, the issue is covered in favour of the assessee as before the amendment, there were decisions of Hon’ble Bombay High Court and Hon'ble Supreme Court in favor of assessee on the said issue.

5.

In the result, the appeal by the assessee is allowed and the orders of the authority below are set aside.

More judgments on Section 36(1)(va)

All 6,054 judgments and leading authorities on Section 36(1)(va) →

Recent GST High Court judgments

Search GST case law →