DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX vs. PRESS2 DRYCLEANING AND LAUNDRY PRIVATE LIMITED, MUMBAI

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ITA 2765/MUM/2023Status: DisposedITAT Mumbai19 March 2024AY 2020-21Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S RIFAUR RAHMAN (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the addition amount was Rs. 9,03,193/- with a tax effect of Rs. 2,34,830/-. The Tribunal observed that the tax effect was significantly below the limit prescribed by CBDT Circular No. 17/2019 for filing appeals. No exceptional circumstances were presented to justify filing the appeal despite the low tax effect.

What were the facts?

The Revenue filed an appeal against an order dated 30/05/2023 passed by NFAC, Delhi, which involved an adjustment made in the intimation under section 143(1). The grounds raised by the Revenue pertained to the disallowance of employee contributions to provident fund and ESIC made after the due date.

What were the issues?

Whether the disallowance of employee contributions to PF/ESIC made after the due date is outside the scope of section 143(1)(a)(iv) and whether the appeal of the Revenue should be dismissed on account of low tax effect.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 36(1)(va),Section 36(1)(ve)

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Income Tax Appellate Tribunal, ‘SMC ‘ BENCH

For Appellant: Shri Prinyank Ghia
For Respondent: Shri R.R.Makwana
Hearing: 19/03/2024Pronounced: 19/03/2024

आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the Revenue against order dated 30/05/2023 passed by NFAC, Delhi in relation to the adjustment made in the intimation u/s. 143(1). 2. Following grounds have been raised by the Revenue:- “On the facts and circumstances of the case, whether the Ld CIT(A) has erred in holding that the adjustment made u/s 36(1)(va) of the IT Act towards the Employee Contribution to Press2 Dry Cleaning and Laundry Pvt. Ltd provident Fund and ESIC is outside the scope of section 143(1)(a)(iv) of the Income Tax Act. 2 On the facts and circumstances of the case, whether the Ld.CIT(A) has erred in treating that the adjustment made u/s 36(1)(ve) of the IT Act towards the Employee Contribution to Provident fund and ESIC without appreciating decision of the Hon'ble SC in the case of Checkmate Service Private Limited wherein it was held that disallowance u/s 36(1)(va) of the Act is applicable in case the payment to PF/ESIC fund is made after the due date as per relevant welfare Act. 3 On the facts and circumstances of the case, whether the Ld.CIT(A) has erred in ignoring the fact that due opportunity was given to the assessee by the CPC and after considering the response of the assessee, disallowance w/s 36(1)(va) of the IT Act was made in view of the decision of jurisdictional ITAT in the case of Kalpesh Synthetics (P) Ltd Vs Dy. CIT(2022) 137 taxmann.com 475/195 ITD 142(mumb. Trib.)”.

2.

At the outset, it is seen that the addition is only of Rs.9,03,193/- and tax effect is Rs.2,34,830/- as per Memorandum of Appeal. Nowhere in the authorization Memo any exceptional circumstances have been stated as to why the CBDT Circular No. 17/2019 dated 08/08/2019 prescribing tax limit for filing of appeal which is Rs.50,00,000/- has not been provided. Admittedly the tax affect is much below the prescribed limit and no exception circumstances mentioned in the said circular is applicable. Accordingly, the appeal of the Revenue is dismissed on account of low tax effect in view of CBDT Circular No.17/2019 dated 08/08/2019.

Press2 Dry Cleaning and Laundry Pvt. Ltd

3.

In the result, appeal of the Revenue is dismissed.

Order pronounced on 19th March, 2024.

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