SHRI SHASHIKUMAR S. MISHRA,BHARUCH vs. THE DY.CIT, BHARUCH CIRCLE, BHARUCH

PDF · subscribers
ITA 2769/AHD/2014Status: DisposedITAT Surat18 June 2018AY 2011-126 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the disallowance of employees' contribution to PF was justified as per Section 36(1)(va) read with Section 43B of the Act, following a Gujarat High Court decision. The reduced disallowance on miscellaneous expenses was also deemed reasonable.

What were the facts?

The assessee failed to deposit employees' contribution to Provident Fund within the prescribed time. The Assessing Officer disallowed the amount, and the CIT(A) upheld this disallowance. The assessee also contested ad-hoc disallowances on miscellaneous expenses.

What were the issues?

Whether late deposit of employees' PF contribution is disallowable, and if ad-hoc disallowances on expenses are justified.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B,Section 2(24)(x),Section 234B,Section 234C,Section 234D,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)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, 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.

4.

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.

6.

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.

8.

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.

9.

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.

11.

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.

12.

Ground No. 3 relates to charging of interest u/s. 234B/234C and 234D of the Act.

13.

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.

16.

In the result, the appeal of the assessee is dismissed.

17.

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

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 →