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Facts
The assessee filed an appeal against an order of the CIT(A) for assessment years 2018-19, challenging an addition of Rs. 8,25,275/- made by the AO. The addition was on account of disallowance of EPF and ESI employer's contribution due to no corresponding salary payment being noted. The assessee claimed this was an inadvertent mistake where salary was wrongly categorized.
Held
The Tribunal noted a delay of 673 days in filing the appeal, which was condoned due to the assessee being a cancer patient with adverse medical issues. The Tribunal found some veracity in the assessee's claim, considering the business turnover and staff welfare expenses, and decided to allow the assessee one last opportunity.
Key Issues
The primary issue was whether the addition of Rs. 8,25,275/- for disallowance of EPF and ESI employer's contribution was justified, and if the assessee should be given an opportunity to rectify the mistake in categorization of salary.
Sections Cited
250
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed against the order bearing DIN & Order No.ITBA/NFAC/S/250/2022-23/1043638319(1) dated 28.06.2022 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2018- 19. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 28.06.2022 passed by NFAC, Delhi.
2.0 It has been noted that there is a delay of 673 days in the case, in filing of this appeal before the tribunal. In its affidavit the assesse has pleaded that the assesse is a cancer patient and was having adverse medical issues which contributed to the delay. All these activities contributed to the delay which was neither willful nor wanton. The assesse submitted that there will not be case of any non-compliance now. We have considered the justification put forth by the assesse and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. The Ld. DR did not pose any serious objections to the delay. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal. 3.0 The only issue under consideration is the addition of Rs.8,25,275/- made by the Ld. AO through its assessment order dated 24.12.2020. The Ld. Counsel for the assessed informed that the impugned addition was made by the Ld. AO on the premise that the impugned addition of Rs.8,25,275/- was on account of disallowance of EPF and ESI employers contribution and for which there was no corresponding salary payment noted. The Ld. Counsel for the assesse informed that the assesse engaged in the business of selling electrical goods and working as electrical contractor in the name and style of radiant engineering. It was submitted that by an inadvertent mistake the amount of salary was wrongly put under the head customs duties and taxes paid in Column-7 (i) of ITR form. It was stated that the assesse had paid salary to its employees who were working on site of other companies like Chennai Metro Rail Limited, Royal Enfield Ltd from whom electrical contract work is taken. The Ld. Counsel for the assesse further indicated that it had revised correct details through a belated filed return. It was accordingly pleaded that the matter be restored to the file of the Ld. AO to verify the facts and readjudicate the matter. The Ld. DR relied upon order of the authorities below. 4.0 We have heard rival submissions in the light of material available on records. We have noted that there exists some veracity in the claims of the assesse. The assesse has done a business and shown turnover of nearly Rs.16.97Crs in its profit and loss account for the year ended 31.03.2018. The same cannot be achieved without any employees. In fact the profit and loss account also shows staff welfare expenses are Rs. 6 lakhs app. We are of the view that ends of justice would be met if the assessee is given one last opportunity to present its case and filed supporting evidences before the Ld.AO. Accordingly, placing reliance upon the decision in the case of TIN box 249 ITR 216 the matter is restored to the file of the AO for assessment de novo. We therefore set aside the order of lower authorities on this issue and we direct the Ld. AO