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Facts
The assessee company filed its return of income, and in the process, a disallowance for late payment of PF/ESI was made under Section 36(1)(iv) instead of Section 36(1)(va). The AO's intimation under Section 143(1) reflected a disallowance of Rs. 58,153/-, which was initially shown under Section 36(1)(iv) in the return and later rectified to Section 36(1)(va) and even mentioned under Section 43B in a rectification application.
Held
The Tribunal held that the disallowance made in the intimation under Section 143(1) was erroneous as the same amount was added/disallowed twice. The Tribunal found that it was a technical and venial breach by the appellant company, leading to double disallowance and double taxation.
Key Issues
Whether the disallowance made in the intimation u/s 143(1) was justified when the same was already accounted for as a disallowance in the return and a rectification application was rejected, leading to double disallowance.
Sections Cited
143(1), 36(1)(iv), 36(1)(va), 43B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR.BRR KUMARSHRI SIDDHARTHA NAUTIYAL
O R D E R PER: DR. BRR KUMAR, VICE PRESIDENT: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, vide order dated 28.08.2024 passed for the Assessment Year 2022-23. 2. The Assessee has taken the following grounds of appeal:-
1. The A.O. as well as learned CIT(A) has erred in law and on facts while not considering that in the intimation u/s. 143(1) of the I. T. Act, 1961, the appellant company while filing the return of income for the late payment/deposit of PF/ESI has considered the disallowance under section 36(1)(iv) instead of section 36(1)(va) as per the intimation u/s. 143(1). It is also to be submitted that in the rectification application filed by the appellant company the disallowance was shown under section 43B of the I. T. Act, 1961. However, the learned A.O. rejected the rectification application filed by the appellant company wherein the appellant company had narrated the above facts. It is to be submitted that the late deposit/payment of ESI/PF was by mistake while filing the return of income shown as disallowance u/s. 36(1) (iv) instead of section 36(1)(va) and it was not that the Asst.Year –2022-23 - 2– appellant company had not made any disallowance. It was only a technical and venial breach and mistake by the appellant company and there was no revenue loss, the disallowance was made but under wrong heading and the same should not be considered as default and disallowance to be made, since the same also leads to double disallowance and double taxation for the same amount, once while the appellant company had made the disallowance under section 36(1)(va) while filing the return of income and/or under section 438 in the rectification application filed by the appellant company and twice while making the addition/disallowance by the learned A.O. in the intimation under section 143(1) of the I. T. Act, 1961.
2. The A.O. as well as learned CIT(A) has erred in law and on facts while not considering that in the ITR filed on 13-09-2022 vide acknowledgement number 488437911130922 for A.Y. 2022-23 the appellant company has disallowed the late deposit/payment of PF/ESI while filing the return of income under para no. page no. 30 of the ITR wherein under the heading of "Amounts debited to the profit and loss account, to the extent disallowable under section 36 due to non- fulfilment of condition specified in relevant clauses" at sub-para (f) under the heading of "Amount of contributions to a recognised provident fund [36(1)(iv)]" Rs. 58,153/- has been disallowed.
3. The A.O. as well as learned CIT(A) has erred on facts while not considering that in the intimation u/s. 143(1) under which section the disallowance has been made in the intimation and the amount tallies with the disallowance made by the appellant company of Rs.58,153/-, in the intimation under section 143(1) wherein under para no. 6 (f) wherein the disallowance made by the appellant company is shown under section 36(1)(va) and similarly the same has been accepted under section 143(1) column also. Similarly, in the intimation under section 14(1) at page no. 6 para 6 (k) the disallowance made by the appellant company is mentioned as nil and as per intimation under section 143(1) Rs. 58,153/- has been disallowed, from the same page no. 6 of the intimation under section 143(1) it is seen and verifiable that same amount has been added/disallowed twice of Rs.58,153/-.
Under the circumstances the disallowance made in the intimation u/s. 143 (1) and not allowing the rectification application filed by the appellant company is required to be allowed.
The assessee has filed adjournment application which has been rejected owing to the perusal of the facts as mentioned in the written submission filed by the assessee vide letter dated 09.12.2024. Asst.Year –2022-23 - 3– 4. We find that the A.O. as well as learned CIT(A) has erred on facts while not considering that in the intimation u/s. 143(1) under which section the disallowance has been made in the intimation and the amount tallies with the disallowance made by the appellant company of Rs.58,153/-, in the intimation under section 143(1) wherein under para no. 6(f) wherein the disallowance made by the appellant company is shown under section 36(1)(va) and similarly the same has been accepted under section 143(1) column also. Similarly, in the intimation under section 143(1) at page no. 6 para 6(k) the disallowance made by the appellant company is mentioned as nil and as per intimation under section 143(1) Rs.58,153/- has been disallowed, from the same page no. 6 of the intimation under section 143(1) it is seen and verifiable that same amount has been added/disallowed twice of Rs.58,153/-.
On the other hand the Ld.DR could not dispute the above facts.
Under the circumstances, we hold that the disallowance made in the intimation u/s.143(1) and not allowing the rectification filed by the assessee is required to be allowed.
In the result, the appeal filed by the assessee is allowed.