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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI C.M.GARG & SHRI O.P.MEENA
आदेश /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. This appeal by the Assessee is directed against the order of learned Commissioner of Income tax (Appeals)-VI, Baroda (in short “the CIT (A)”) dated 01.08.2014 relating to Assessment Year 2011- 12 , which in turn has arisen from the order passed by the Deputy Commissioner of Income-Tax, Circle – Bharuch (in short “the AO”)
Shashi Kumar Mishra v. DCIT-Bharuch/I.T.A. No.2769/Ahd/2014/A.Y.:11-12 Page 2 of 6 dated 11.02.2014 under section 143 (3) of Income Tax Act, 1961 (in short ‘the Act’). 2. Since non appeared on behalf of the assessee on hearing date, though the ld. Sr. D.R. is present. Hence, this appeal is being decided on merit after considering material on record. 3. Ground no. 1 states that Ld. CIT (A) has erred in confirming the disallowance of employees contribution to Provident Fund amount of Rs. 34,51,430 by treating payments in contravention to provision of section 36(1)(va) of the Act.
Briefly, stated facts as emerged out from the assessment order are that the assessee has been running two proprietary concerns namely M/s. Nihal Enterprise and M/s. Priya Intelligence Security Contract. The assessee has collected EPF/PF of Rs. 31,85,216 from the employees in the case of M/s. Nihal Enterprise but has not deposited the same within the time limit prescribed under the ESI/PF Act and Similarly Rs. 2,66,214 has been collected from employees in the case of M/s. Priya Intelligence Securities. The AO therefore, disallowed the same as per provision of section 36(1) (va) read with section 43B of the Act.
Shashi Kumar Mishra v. DCIT-Bharuch/I.T.A. No.2769/Ahd/2014/A.Y.:11-12 Page 3 of 6 5. Being aggrieved, the assessee filed an appeal before the ld.
CIT (A). However, the ld. CIT (A) relying on the decision of Hon’ble
Gujarat High Court in the case of CIT v. Gujarat State Road
Transport Corporation [2014] 366 ITR 170(Guj) :223 Taxman 398:
[2014] 41 taxmann.com 100 (2014) (1) TML 502 -Guj-HC, has
upheld the disallowance of Rs. 34, 51,430 made by the AO on
account of late payment of EPF/PF.
Being, aggrieved the assessee filed this appeal before this Tribunal. However, none has attended for the assessee nor any adjournment is sought, hence, we are deciding this appeal ex- parte on merit on the basis of material on record. 7. We have heard the Learned Departmental Representative
and perused the relevant material on record. We find that the
issue is squarely covered against the assessee by the decision of
Hon’ble Gujarat High Court in the case of CIT v. Gujarat State
Road Transport Corporation [2014] 366 ITR 170(Guj) :223 Taxman
398: [2014] 41 taxmann.com 100 (2014) (1) TML 502 -Guj-HC,
Shashi Kumar Mishra v. DCIT-Bharuch/I.T.A. No.2769/Ahd/2014/A.Y.:11-12 Page 4 of 6 wherein it was held that Section 43B does not apply to employees
contribution. Only section 2(24) (x) read with section 36(1)(va) is
applicable and therefore, employees contribution is disallowed if
not paid within due date as per EPF/ESI Act. We are of the
considered opinion that there is no mistake in the orders of lower
authorities and the ld. CIT (A) was right in following the ratio of
the Hon’ble Gujarat High Court (supra). Ex-consequenti, this
grounds of appeal of the assessee being devoid of any merit,
hence, it is dismissed.
Ground No. 2 states that the Ld. CIT (A) erred in retaining 5% out of ad-hoc 10% disallowance by AO from telephone /vehicle / travelling and miscellaneous expenses, which ought to have deleted in toto.
Short facts are that the AO disallowed a sum of Rs. 1,25,000 being 10% of Rs. 12,16,734 of expenses on account of telephone, travelling ,conveyance, diesel etc., as the most of the vouchers were self-made and some of expenses were not fully vouched. In appeal, CIT (A) has restricted to disallowance to 5%, which worked
Shashi Kumar Mishra v. DCIT-Bharuch/I.T.A. No.2769/Ahd/2014/A.Y.:11-12 Page 5 of 6 out to Rs. 60,837 and deleted the balance disallowance of Rs. 64,163. 10. Being, aggrieved the assessee filed this appeal before the
Tribunal. However, no one attended the hearing before us no any
adjournment was sought.
On careful consideration of facts, we find that disallowance
restricted to 5 % by Ld. CIT (A) are reasonable looking to the facts
that all expenses are not fully vouched and vouchers are self-
made. Hence, this ground of appeal is dismissed.
Ground No. 3 relates to charging of interest u/s. 234B/234C and 234D of the Act.
We are of the view that this ground is consequential in nature, however, we make it clear that the charging of interest is mandatory as held by Hon`ble Supreme Court in the case of Anjum M. H. Ghaswala 252 ITR 1 (SC). Therefore, it is upheld subject to consequential relief if any. 14. Ground No.4 relates to initiation of penalty proceedings under section 271(1) (c) of the Act.
Shashi Kumar Mishra v. DCIT-Bharuch/I.T.A. No.2769/Ahd/2014/A.Y.:11-12 Page 6 of 6 15. We find that the assessee has been aggrieved with the
initiation of penalty proceedings under section 271 (1) (c) of the
Act. However, no appeal lies against mere initiation of penalty
proceedings. This Ground of appeal, is therefore, premature and
accordingly dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 19.06.2018
Sd/- Sd/- (सी.एम.गग� /C.M. GARG) (ओ.पी.मीना/O.P.MEENA) �याियकसद�यतथा/JUDICIAL MEMBER लेखासद�यकेसम� /ACCOUNTANT MEMBER सुरत Dated: 19 June, 2018 आदेश क� �ितिलिप अ�ेिषत/Copy of the Order is forwarded to : 1. अपीलाथ�/ The Appellant; 2. ��थ�/ The Respondent; 3. आयकरआयु� (अपील) The CIT(A), 4. आयकरआयु� /Pr. CIT 5.िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण/ D.R.-ITAT; 6. गाड�फाईल / Guard file ITAT. By order / / TRUE COPY / / Assistant Registrar, Surat