NKG INFRASTRUCTURE LIMITED,DELHI vs. DCIT, CENTRAL CIRCLE-27, DELHI

That on the facts and circumstances of the case, Ld. CIT(A) erred in law in upholding disallowance of Rs 44,39,102/- made by AO by passing rectification order u/s 154 of the Income Tax Act, 1961 without appreciating the fact that subject matter of rectification of mistake apparent from record, must be an obvious and patent mistake and not which could be established by long drawn process of reasoning.

Without prejudice to the Ground of Appeal No. 1, the Ld. CIT(A) erred in law in upholding disallowance of Rs 44,39,102/- on account of employee's contribution to PF and ESI deposited after the due date of relevant Acts as per the provisions of section 36(1)(va) r.w.s 2(24)(x) of the Act, without considering the fact that the appellant has deposited the same before the due date of filing of return of income under section 139 of the Act.

The appellant craves leave to add, amend or alter any of the grounds of appeal.

Suffice to say, there is no dispute between the parties that both the learned lower authorities herein have taken recourse of section 154 rectification so as to disallow the assessee’s PF/ESI contribution of Rs.44,39,102/- on the ground that the same had to be deposited on or before the “due” date under the corresponding statute(s) than that of filing return under section 139(1) of the Act. 5. Learned departmental representative vehemently argues that given the fact that the hon’ble apex court’s recent landmark decision in Checkmate Services Pvt Ltd Vs. CIT [2022] 143 taxmann.com 278 (SC) has already settled the issue against the assessee and in department’s favour, section 154 rectification proceedings finalized against the appellant deserves to be upheld. 3 | P a g e

We have given our thoughtful consideration to the assessee’s pleadings Revenue’s foregoing vehement contentions. We are of the considered view that given the fact that the learned lower authorities have taken section 154 rectification root to disallow the assessee’s impugned PF/ESI contribution in light of hon’ble apex court decision, we hold that such a subsequent rectification is not sustainable in law going by M/s. Infantry Security and Facilities Vs. ITO in Civil Writ Petition 17175/2024 dated 03.12.2024 (Bom). This is indeed coupled with the fact that the assessee’s further argument that it was not even heard u/s 154(3) of the Act which has gone unrebutted from the Revenue side. 7. This assessee’s appeal is allowed in above terms. Order pronounced in the open court on 28th January, 2025 (S. RIFAUR RAHMAN) JUDICIAL MEMBER