M/S. DATA PATTERNS (INDIA) LTD,CHENNAI vs. AO, CORPORATE CIRCLE 1(1), CHENNAI

The assessee-company has filed its return of income on 31.10.2018 declaring total income of Rs. 2,58,01,957/-. The return of income was processed u/s. 143(1) determining total income of Rs.4,84,52,856/- by making adjustment of disallowance u/s. 43B of the Act of Rs.1,95,30,970/- and disallowances u/s 36(1)(via) Rs. 31,19,929/- . The assessment was picked up for limited scrutiny and assessment was completed u/s. 143(3) of the Act without making any addition.

The assesse before Ld. CIT(A) has submitted that the assessee has already made disallowance at Rs. 1,95,30,970/- and added under Section 43B of the Act of in the return of income, but AO in the assessment order u/s 143(3) of the Act has taken the income as per intimation u/s 143(1) of the Act in which double disallowances u/s 43B of the Act was made. The assessee submitted that amount of Rs.1,95,30,970/- was wrongly keyed in column No.Part-A-OI S.No.6(c) and 6(q) instead of keying in Part A-OI S.No.11(b), 11(c) and 11(f)

The Ld. AR before us has argued that the A.O in the assessment passed order u/s. 143(3) of the Act after scrutiny should have considered the details submitted that the assessee has already added Rs. 1,95,30,970/- u/s. 43B of the Act in the total income in the return itself and further addition again made while processing u/s. 143(1) of the Act is the double addition.

The Ld. DR has relied on the orders of the authorities below.

We have heard the rival submissions, perused the copy of return of income filed, section 143(1) intimation, Form-3CD and Section 143(3) order. The CPC while processing order u/s. 143(1) of the Act has added Rs.1,95,30,970/- u/s. 43B of the Act as the assessee has keyed in amount disallowable u/s 43B in wrong coloumn. As the A.O in the order u/s. 143(3) of the Act is required to determine correct income, he should have corrected the double disallowances made u/s. 43B of the Act in intimation u/s. 143(1), if he had accepted the return of income u/s. 143(3) of the Act. The A.O is therefore, directed to reduce the disallowance of Rs.1,95,30,970/- which has already been added in the return of income.

As regard to disallowance of Rs. 31,19,929/-, the assessee has submitted that it has wrongly keyed in figures in column No. Part-A-OI S.No.6(c) and 6(q) instead of keying in Part A-OI S.No.11(b), 11(c) and 11(f). It was seen that late payment of employee contribution to PF and ESI of Rs.31,19,929/- was not added in return of income. The assessee in the submission has argued if such payment has been made before due date of filing of return of income, the same are allowable as held by various courts. We do not agree with the assessee’s submission as this issue has now been settled by the decision of Hon’ble Supreme Court in the case of M/s. Checkmate Services P. Ltd. v. CIT, as correctly relied by Ld. CIT(A). In view of above, the disallowance made u/s. 36(1)(va) of the Act of Rs. 31,19,329/- is upheld.

In the result, the appeal filed by the assessee is partly allowed.