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Facts
The assessee filed appeals against orders passed by the CIT(A) for assessment years 2018-19 to 2020-21. The appeals arose from additions made under Section 36(1)(va) of the Act, concerning delayed remittance of employee's PF/ESI contributions. The assessee's appeals to the CIT(A) were dismissed due to delay, without considering the merits.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A). The Tribunal noted that the issue of additions under Section 143(1)(a) for delayed remittance of employee contributions has been settled by the Hon'ble Apex Court and various High Courts in favor of the revenue.
Key Issues
Whether the addition made under Section 143(1)(a) for delayed remittance of employee contributions is valid, and if the CIT(A) erred in dismissing the appeal on technical grounds without condoning the delay.
Sections Cited
36(1)(va), 143(1), 143(1)(a), 234B, 234C, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI.LAXMI PRASAD SAHU & SHRI.SOUNDARARAJAN K
Per Laxmi Prasad Sahu, Accountant Member :
All these three appeals are filed by the assessee against separate Orders passed by the CIT(A) on common grounds except difference in figures reported.
The grounds raised by the assessee are as follows:
Assessment Year 2018-19 1. The impugned intimation passed by the Assistant Director of Income Tax, CPC, Bengaluru (learned AO), to the extent prejudicial to the Appellant, is not justified in law and on facts and circumstances of the case. to 178/Bang/2025 Page 2 of 7 2. The learned CIT(A) has erred in law and on facts in not considering the appeal on merits and thereby erred in upholding the order of the Ld.AO.
3. The impugned intimation without granting an opportunity of being heard is against the principles of natural justice and is liable to be quashed in entirety.
4. The Ld.CIT(A) has erred in law and on facts in rejecting the appeal on technical grounds; 5. The Ld.CIT(A) has erred in not appreciating that there was reasonable cause in filing the appeal belatedly.
6. The learned CIT(A) and AO has erred in law and on facts in making addition u/s 36(1)(va) of the Act to the extent of Rs. 1,07,62,220/-.
7. The intimation, being riddled with mistakes, is bad in law and liable to be quashed in its entirety.
8. The Ld.CIT(A)/AO has erred in law and on facts in making the above addition against the scope of section 143(1) of the Act.
9. The learned CIT(A) and AO has erred in law and on facts in levying interest u/s 234B/C. (Tax effect Rs 33,57,813) On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honorable Tribunal, it is prayed that the order passed under section 250 upholding the order passed u/s 143(1) of the Act, Assessment Year 2019-20 1. The impugned intimation passed by the Assistant Director of Income Tax, CPC, Bengaluru (learned AO), to the extent prejudicial to the Appellant, is not justified in law and on facts and circumstances of the case.
2. The learned CIT(A) has erred in law and on facts in not considering the appeal on merits and thereby erred in upholding the order of the Ld.AO.
3. The impugned intimation without granting an opportunity of being heard is against the principles of natural justice and is liable to be to 178/Bang/2025 Page 3 of 7 quashed in entirety.
4. The Ld.CIT(A) has erred in law and on facts in rejecting the appeal on technical grounds; 5. The Ld.CIT(A) has erred in not appreciating that there was reasonable cause in filing the appeal belatedly.
6. The learned CIT(A) and AO has erred in law and on facts in making addition u/s 36(1)(va) of the Act to the extent of Rs.1,09,60,590/- 7. The intimation, being riddled with mistakes, is bad in law and liable to be quashed in its entirety.
8. The Ld.CIT(A)/AO has erred in law and on facts in making the above addition against the scope of section 143(1) of the Act.
The learned CIT(A) and AO has erred in law and on facts in levying interest u/s 234B/C. (Tax effect Rs.34,19,704/-) On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honorable Tribunal, it is prayed that the order passed under section 250 upholding the order passed u/s 143(1) of the Act, to the extent it is against the Appellant, be quashed and the relief sought to be granted. Assessment Year 2020-21 1. The impugned intimation passed by the Assistant Director of Income Tax, CPC, Bengaluru (learned AO), to the extent prejudicial to the Appellant, is not justified in law and on facts and circumstances of the case.
2. The learned CIT(A) has erred in law and on facts in not considering the appeal on merits and thereby erred in upholding the order of the Ld.AO.
The impugned intimation without granting an opportunity of being heard is against the principles of natural justice and is liable to be quashed in entirety.
4. The Ld.CIT(A) has erred in law and on facts in rejecting the appeal on technical grounds;
5. The Ld.CIT(A) has erred in not appreciating that there was reasonable cause in filing the appeal belatedly.
6. The learned CIT(A) and AO has erred in law and on facts in making addition u/s 36(1)(va) of the Act to the extent of Rs. 17,59,770/-.
7. The intimation, being riddled with mistakes, is bad in law and liable to be quashed in its entirety.
8. The Ld.CIT(A)/AO has erred in law and on facts in making the above addition against the scope of section 143(1) of the Act. 9. The learned CIT(A) and AO has erred in law and on facts in levying interest u/s 234B/C. (Tax effect Rs.5,49,048/-) On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honorable Tribunal, it is prayed that the order passed under section 250 upholding the order passed u/s 143(1) of the Act, to the extent it is against the Appellant, be quashed and the relief sought to be granted.
3. On going through the grounds of appeal taken by the assessee, we noted that issue raised in all the three years are identical and were heard together. Therefore, we are passing a common Order for all the years. All these 3 appeals are arising out of addition made under section 36(1)(va) of the Act. Assessee filed appeal against 143(1)(a) of the Act before learned CIT(A) with delay which was not condoned by the learned CIT(A) and dismissed the appeal of the assessee without going into merits of the case after relying on various judgments. The details are as under:
Assessment Due date Intimation Appeal Addition Date of Email id Date of Year Order date filed made under intimation filing of u/s before section sent to return 143(1)(a) learned 36(1)(va) assessee CIT(A) of the Act before (Rs.) making adjustment 2018-19 30.09.2018 08.01.2020 10.11.2023 1,07,62,220 29.05.2019 Jagadesshwar.reddyvari 30.09.2018 @gmail.com 2019-20 30.09.2019 14.05.2020 10.11.2023 1,09,60,585 02.01.2020 Jagadesshwar.reddyvari 30.09.2019 @gmail.com 2020-21 15.02.2021 08.12.2021 10.11.2023 1,07,95,260 Not 13.01.2021 available
Aggrieved from the above intimation, assessee filed appeal before CIT(A). During the course of filing of appeal in Form No.35, assessee had filed separate annexure for condonations of delay which has not been properly appreciated by the learned CIT(A) and without considering the decision of the Hon’ble Apex Court regarding extension of dates because of COVID 19 pandemic he calculated the delay days and did not accept the condonation application and dismissed the appeal of the assessee.
Aggrieved from the above Order, assessee filed appeals before the Tribunal. After filing of the appeal by the assessee, the case was listed but on 24.04.2025, 10.04.205, 09.06.2025 and 06.11.2025 nobody appeared on behalf of the assessee. Only on 2 occasions on 24.03.2025 and 01.05.2025 Shri. Ankit Garg, CA appeared and sought time. Notice was sent to the assessee for the date of hearing but assessee was not present. Therefore the case was decided in the presence of learned DR since the issue raised in intimation under section 143(1)(a) of the Act on delay remittance of employees contribution to PF/ESI has been decided by the Hon’ble Apex Court in the case of Checkmate Services P. Ltd. Vs. CIT reported in 143 to 178/Bang/2025 Page 6 of 7 taxmann.com 178 (SC) in favour of the revenue, the issue raised by the assessee are quite similar, therefore, no need to keep pending for further adjudication.
Learned DR relied on the Order of the lower authorities and submitted that this issue has been decided by the Hon’ble Apex Court in favour of the Revenue. The CPC has disallowed on the basis of information provided by the tax auditor in Form 3CD at Sl.No.20 in which there is clear mention that there is delay of remittance of the employees contribution. Therefore, CPC has rightly disallowed in the intimation and the CPC has also power to make addition on certain points as listed in section 143(1) of the Act and this issue is also covered in section 143(1)(a)(ii) of the Act. The tax audit is also part of the income tax returns and he relied on the judgment of Hon’ble Madras High Court reported in 38 taxmann.com 571 in the case of AA520 Veerappampalayam Primary Agricultural Cooperative Credit Society Ltd. Vs. Deputy Commissioner of Income-tax.
Considering the submission of learned DR, we noted that assessee has filed return and while processing return under section 143(1)(a) of the Act the CPC made addition under section 143(1)(a) of the Act towards delayed remittance of employees contribution to PF/ESI and before making adjustment an intimation was sent to the assessee noted supra for 2 years. Assessee has raised issue as per grounds of appeal
. The ld. CIT(A) has not condoned the delay in filling the appeal but on going through the order of the ld. CIT(A) we condone the delay and taking for adjudication. The issue is also covered in the judgment of Hon’ble Apex Court. Therefore we heard learned DR. On going through the grounds of appeal that the assessee has raised that no adjustment can be made under section 143(1)(a) of the Act while processing issue by CPC and this issue has been settled by the Hon’ble High Court of Madras as relied on by the learned DR quoted supra and Co-ordinate to 178/Bang/2025 Page 7 of 7. Bench of ITAT Jodhpur in the case of Tarun Consruction Co. Vs. ITO reported in (2023) 157 taxmann.com 727 (Jodhpur – Trib.) and we also relied on the judgment in the case of Microviews Infosystems (P.) Ltd., Vs. DCITin (2023) 151 taxmann.com 531 (Kolkata – Trib.) for addition made u/s 36(1) (va). The issue raised in grounds of appeal for disallowance u/s 36(1)(va) of the Act has been settled by the Hon’ble Apex Court in the case of Checkmate Services P. Ltd., (supra) in favour of the Revenue. Therefore respectfully following the above judgments, we dismiss appeals of the assessee.
In the result, appeals of the assessee are dismissed.