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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 31.01.2024 passed by learned Addl./JCIT (A)-3, Delhi [First Appellate Authority “FAA”] which in turn arises out of intimation of assessment dated 12.03.2019 passed by learned CPC, Bangaluru [“AO”] u/s 143(1) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2018-19, the assessee has filed this appeal on following grounds:
“1. On the facts and circumstances of the case, the learned CIT (A) erred in sustaining disallowance of share of employer's contribution to ESI of Rs.47,056/- and Provident fund of Rs.1,55,577/- (aggregating to Rs.2,02,633/-), which is the difference of actual amount paid and contribution by employees shown in column 20(b) of the Tax Audit Page 1 of 3 Vindas Chemical Industries Private Limited AY 2018-19 Report paid few days late, but allowable under section 43B of the Income Tax Act, 1961. Thus, disallowance of Rs.2,02,633/- is also wrong, illegal, and unjustified.
The learned CIT (A), NFAC failed to appreciate the fact that in point 20(b), the actual amount paid in column shows higher amount than the employee's contribution to PF and ESI portion to these items, which reveal the difference between both as employer's contribution to PF and ESI paid which are allowable under section 43B of the Income Tax Act, 1961.
3. The learned CIT (A) should have allowed under section 43B of the Income Tax Act, 1961, the employers contribution to PF and ESI of Rs. 47,056/- &Rs.1,55,577/- respectively paid late, but before the prescribed limit under section 139(1) of the Income Tax Act, 1961.
The appellant prays for the relief.
Without prejudice to the above, the disallowance sustained by the Hon'ble CIT(A) is excessive.
The appellant craves leave to add, alter, delete, or amend any of the Grounds of Appeal
as and when the necessity or occasion arises.”
2. Ld. AR for assessee made a straight forward submission that the AO has made disallowance of both employees’ contribution and employer’s contribution to PF/ESI while passing the aforesaid intimation u/s 143(1).
Now, the assessee is in present appeal qua the disallowance of employer’s contribution of Rs. 1,55,577/- to PF and Rs. 47,056/- to ESI only as mentioned in the grounds. Ld. AR submitted that the employer’s contribution is not hit by section 36(1)(va)/2(24)(ix); the same is allowable as a deduction provided the assessee has paid the same to PF/ESI Fund upto due date for filing of return u/s 139(1) as per section 43B. Ld. AR submitted that the assessee has actually paid employer’s contribution to PF/ESI Fund upto due date for filing of return u/s 139(1) as required by section 43B and hence no disallowance was required to be made by AO qua the employer’s contribution. Therefore, the disallowance made by AO to that extent, which is not as per law, is to be deleted. Ld. DR agreed to the legal submission of Vindas Chemical Industries Private Limited AY 2018-19 assessee but, however, proposed to remand this matter back to the file of AO for factual verification and thereafter deleting disallowance. After a careful consideration, we restore this issue to AO for carrying out necessary factual verification with regard to the payments of employer’s contribution made by assessee in terms of section 43B and modify assessment-order to delete the appropriate amount of disallowance accordingly.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 24/07/2024