SOFTNAUTICS LLP,AHMEDABAD vs. THE ADIT, CPC, BENGLURU

At the time of hearing of the Stay Petition filed by the assessee in this case, it is noted that the corresponding appeal of the assessee being involves a small issue and the said appeal itself can be heard and disposed of as agreed even by the learned representatives of both the sides. Accordingly, the said appeal of the assessee alongwith the stay petition has been heard and is being disposed of by this common order.

This appeal filed by the assessee is directed against the order of learned Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“CIT(A)” in short) dated 24.08.2021 for Assessment Year 2019-20 and the solitary issue involved therein relates to the addition of Rs.22,88,026/- made by the Assessing Officer and confirmed by the SP No.2/Ahd/2022 & Softnautics LLP Vs. ADIT AY : 2019-20 2 learned CIT(A) on account of the alleged delayed payment of employees’ contribution to ESIC and PF by the assessee.

The assessee, in the present case, is a LLP which is engaged in the business of providing IT and IT Enables Services as well as Computer and related services. The return for the year under consideration was filed by it on 25.09.2019 declaring total income at Rs.1,20,35,030/-. The said return was processed at Centralized Processing Center (CPC) and an intimation under Section 143(1) of the Act was issued on 05.03.2020 making an adjustment by way of disallowance of employees’ contribution towards ESIC and PF allegedly paid by the assessee belatedly. Against the intimation issued by the Assessing Officer under Section 143(1) of the Act, an appeal was preferred by the assessee before learned CIT(A) challenging the disallowance made on account of the alleged belated payment of contribution towards employees’ PF & ESIC. During the course of appellate proceedings before the learned CIT(A), it was submitted on behalf of the assessee that all the payments towards employees’ contribution to PF and ESIC were made within the due date prescribed in the relevant statute and there was no delay warranting any disallowance. It was contended that there was a typographical mistake in the Tax Audit Report in mentioning the due date of payment of employees’ contribution towards PF & ESIC and on this basis the disallowance was made in the intimation issued under Section 143(1) of the Act which was not warranted. The learned CIT(A) did not accept this contention raised on behalf of the assessee and proceeded to confirm the disallowance made by the Assessing Officer on account of the alleged delayed payment towards employees’ contribution to ESIC and PF. Aggrieved by the order of the learned CIT(A), the assessee has preferred this appeal before the Tribunal.

We have heard the arguments of both the sides and also perused the relevant material available on record. The learned Counsel for the assessee SP No.2/Ahd/2022 & Softnautics LLP Vs. ADIT AY : 2019-20 3 has invited our attention to the relevant details placed on record to point out that all the payments towards employees’ contribution to PF & ESIC were made for the year under consideration before the due date prescribed in the relevant statute and there being no delay in the said payments as alleged by the authorities below, the impugned disallowance made is not warranted. The learned Departmental Representative, on the other hand, has pointed out that the claim made by the assessee of having been paid employees’ contribution towards PF & ESIC within due date prescribed in the relevant statute requires verification by the Assessing Officer. We find force in this contention of the learned DR. Since the learned Counsel for the assessee also has no objection for getting such verification done by the Assessing Officer, we set aside the impugned order of the learned CIT(A) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh after verifying the claim of the assessee that all the payments in question towards employees’ contribution to PF and ESIC having been made within the prescribed date specified in the relevant statute, there was no delay and no disallowance is called for. As a result of the disposal of the appeal of the assessee being Stay Application filed by the assessee being SA No.2/Ahd/2022 has become infructuous and the same is liable to be dismissed.

In the result, the appeal of the assessee is allowed for statistical purposes; whereas the Stay Application filed by the assessee is dismissed.