KOTA TRUCKS P.LTD,DELHI vs. ACIT, CIRCLE 14(2), NEW DELHI

ITA 2050/DEL/2023Status: DisposedITAT Delhi30 January 2026AY 2018-19Bench: SHRI C.N. PRASAD (Judicial Member), SHRI M. BALAGANESH (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the CPC could not have made the disallowance under Section 143(1) when the issue was highly debatable and there were favorable High Court decisions. Consequently, the disallowance was deleted.

What were the facts?

The assessee's return was processed under Section 143(1) of the Income Tax Act, where the CPC disallowed employee contributions to PF and ESI. The assessee argued that at the time of processing, there was a binding jurisdictional High Court decision in their favor, making the issue debatable.

What were the issues?

Whether a disallowance under Section 143(1) is permissible for a highly debatable issue where there are favorable High Court decisions prior to the Supreme Court's ruling.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 36(1)(va),Section 2(24)(x)

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Income Tax Appellate Tribunal, DELHI BENCH, ‘C’: NEW DELHI

Before: SHRI C.N. PRASAD & SHRI M. BALAGANESH

Hearing: 07.01.2026Pronounced: 30.01.2026

PER C.N. PRASAD, JM, This appeal is filed by the assessee against the order of the CIT/NFAC, Delhi dated 31.05.2023 for the A.Y. 2018-19. 2. The assessee has raised following grounds of appeal :- “1. That Id CIT(A) NFAC without appreciating the correct facts of the case and without giving proper opportunity of being heard is not justified in law and facts and circumstances of the case in confirming the addition of Rs. 583723/ made by Id DCIT (CPC) under section 143(1) of the Income Tax Act which was beyond

the powers of DCIT(CPC) for making the adjustment of deemed income u/s 2(24(x) of Income Tax Act on account of deposit of employee contribution of Provident Fund and ESI beyond the alleged due date under

The order continues below.

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