SARJOO SAHKARI CHINI MILLS LTD. ,LAKHIMPUR KHERI vs. ACIT, SITAPUR, SITAPUR

The only issue in this appeal of the assessee is as regards to the order passed under section 143(1) of the I.T. Act by the CPC, Bangalore and confirmed by the ld. CIT(A) in regard to disallowance of the claim of deduction of Rs.1,56,25,934/- on account of Employees’ Contribution to the Provident Fund not paid within the due date as prescribed under the respective statutes i.e. Provident Fund Act. On behalf of the assessee, Shri Rajesh Kumar Pandey appeared and on behalf of the Revenue, Shri Amit Nigam, D.R. appeared.

We have heard the parties and gone through the facts and circumstances of the case. We have noted that the assessee is a cooperative society engaged in the business of manufacture and sale of sugar and its byproducts. The return of income was processed under section 143(1) of the I.T. Act by the CPC, Bangalore, vide order dated 29.4.2020, whereby the Assessing Officer disallowed the late payment of Provident Fund to the tune Rs.1,56,25,934/- being the Employee’s Contribution towards Provident Fund. We noted that this issue stands covered in favour of the Revenue and against the assessee by the decision of the Hon’ble Supreme Court in the case of Checkmate Services P Ltd vs CIT in Civil Appeal No. 2833 OF 2016. We noted that this issue has been deliberated in favour of the Revenue and against the assessee. But, in the present case, the assessee’s claim is that the correct amount claimed by the assessee is Rs.1,70,10,283/- as against the disallowance made by the CPC, Bangalore at Rs.1,56,25,934/- but, the assessee has already made the disallowance in its account and added back to the returned income of the assessee. The assessee explained before the CIT(A) and even now before us in its written submission that the difference of Rs.13,84,349/- is due to wrong reporting of dates by the Tax Auditor in form No.3CB. It was explained that the due date for payment a sum of Rs.10,44,529/- has been mentioned as 15.2.2019 instead of 15.9.2018. The date of payment of Rs.18,875/- has been wrongly mentioned as 15.4.2019 instead of 20.5.2019. The assessee explained that an amount of Rs.3,20,945/- was not entered in the tax audit report at all. It was explained that the due date for payment of the same was 15.4.2019 and the date of payment was 20.5.2019. Hence, all these amounts have been considered as late payment and added by the assessee in the total amount of Rs.1,70,10,283/-. In our view, this needs verification at the level of the Assessing Officer. The Assessing Officer is directed to verify the amount of Rs.1,70,10,283/- already disallowed by the assessee being late payment of the Provident Fund of Employees’ contribution and in case the assessee itself has disallowed, then no further disallowance should be made. This is remanded back to the file of the Assessing Officer for verification purposes only.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 01/12/2022.