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Facts
The assessee filed an appeal against the order of the LdAddl.CIT/JCIT(A)-1, Chandigarh, for assessment year 2019-20. Two main issues were raised: addition of provision for gratuity and addition of employees' contribution towards PF/ESI. The CIT(A) had dismissed the appeal as time-barred, despite the assessee arguing that the delay was within the extended period granted by the Supreme Court due to the Covid-19 pandemic.
Held
The Tribunal held that the CIT(A) was not justified in dismissing the appeal as time-barred, considering the extension granted by the Supreme Court due to the Covid period. Regarding the merits, the assessee did not press the ground relating to the disallowance of employees' PF/ESI contribution, which was confirmed. For the provision for gratuity, the Tribunal noted the assessee's claim of voluntary disallowance and that the CPC made a subsequent disallowance, leading to a potential double disallowance.
Key Issues
Whether the appeal was time-barred and if the disallowance for provision for gratuity resulted in double disallowance.
Sections Cited
43B, 36(1)(va), 143(1)(a)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: JUSTICE (RETD.) C V BHADANG, HON’BLE& SHRI B.R. BASKARAN
PER B.R. BASKARAN, ACCOUNTANT MEMBER :
The assessee has filed this appeal challenging the order dated 31-01-2024 passed by LdAddl.CIT/JCIT(A)-1, Chandigarh and it relates to the assessment year 2019-20. Following two issues are urged in this appeal:-
(a) Addition of Provision for Gratuity made u/s 43B of the Act. (b) Addition of employees contribution u/s 36(1)(va) of the Act. 2. The Ld A.R appearing for the assessee submitted that the above said two adjustments were made by CPC u/s 143(1) of the Act while processing the return of income filed by the assessee and they were challenged before Ld CIT(A). However, the Ld CIT(A) dismissed the appeal of the assessee on the ground that there is delay in filing the appeal. He submitted that the assessee received the intimation u/s 143(1) of the Act during Covid period on 15-09-2020 and the assessee filed the appeal before Ld CIT(A) on 21-09-2021, which was also during Covid period. He submitted that the limitation period has been extended by Hon’ble Supreme Court upto 90 days from 01-03-2022, vide its order dated 10th January, 2022 passed in Miscellaneous Application No.21 of 2022.However, the Ld CIT(A) did not notice this important aspect. Accordingly, he submitted that the appeal filed before Ld CIT(A) was well within the time limit granted by the Hon’ble Supreme Court.
With regard to the merits of the case, the Ld A.R submitted that the assessee does not press the ground relating to the addition of employees PF/ESI made u/s 36(1)(va) of the Act.
With regard to the addition of Provision for Gratuity, the Ld A.R submitted that the assessee itself had voluntarily disallowed the same while computing total income. However, the CPC has again disallowed the very same amount while processing return of income without noticing that the assessee had already disallowed the same and the same has resulted in double disallowance of same amount.
We heard Ld D.R and perused the record. Having regard to the facts submitted by Ld A.R, we notice that there was no delay in filing appeal before Ld CIT(A). Hence, we are of the view that the Ld CIT(A) was not justified in dismissing the appeal of the assessee treating the same as time barred.
On merits, we notice that the assessee did not press the ground relating to disallowance of employees PF/ESI made u/s 36(1)(va) of the Act. Hence the said addition requires to be confirmed.
The remaining issue relates to the disallowance of Provision for Gratuity. The Ld A.R submitted that the assessee has voluntarily disallowed the said expenditure while computing total income and the CPC has again disallowed the same while processing the return of income, resulting in double disallowance of same amount. There cannot be any dispute that double disallowance of same expenditure is not permitted. However, we are of the view that the above said claim of the assessee requires verification at the end of the AO. Accordingly, we restore this issue to the file of the AO with the direction to verify the above said claim of the assessee and delete the disallowance made u/s 143(1)(a), if the assessee had already disallowed the said amount while computing total income. Accordingly, the order passed by Ld CIT(A) is set aside.