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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee company against the order of the Learned Commissioner of Income Tax (Appeals)-12, (hereinafter ‘the Ld.CIT(A)’), Chennai, dated 03.11.2023 for the Assessment Year (hereinafter ‘AY’) 2022-23.
(AY 2022-23) M/s.Macmillan Education India Pvt. Ltd. :: 2 ::
At the outset, Ld.AR of the assessee submitted that there are two issues in this appeal preferred by the assessee. The first issue is regarding disallowance of Rs.18,22,155/- made by the CPC due to delay in payment of employee’s contribution to ESI/PF; and secondly, disallowance of deposit of Labour Welfare Fund contribution amounting to Rs.7,309/-, despite, assessee suo-moto having disallowed it which tantamount to double taxation.
Regarding the first issue of disallowance of employee’s contribution to ESI/PF, the assessee pointed out that the CPC has disallowed the same only because of erroneous recording of “due date” shown in the Tax Audit Report (hereinafter ‘TAR’), even though, assessee had in fact remitted the employee’s contribution well before the “due date” prescribed by the respective statutes (PF/ESI Act). For buttressing his contention, the Ld.AR drew our attention to Page No.12 of the order of the Ld.CIT(A), wherein, we note, inter alia, that employees contribution for PF for the month of July, 2021 was 15th August, 2021, however, the auditor of assessee in the TAR/Form No.3CD had shown the same wrongly as 15th July, 2021; and therefore, even though, the assessee had deposited employyes contribution towards PF well before the due date, as per the requirement of relevant statute i.e. 15th August, 2021 (actual payment
(AY 2022-23) M/s.Macmillan Education India Pvt. Ltd.
:: 3 :: made by assessee on 11.08.2021), the CPC had disallowed the same due to inadvertent mistake reflected in Form No.3CD/TAR. We note from perusal of the chart showing the payment/deposit of PF/ESI, the assessee had deposited the employee’s contribution well before the actual date as prescribed in the relevant statute (PF/ESI Act); and the whole confusion was due to inadvertent error which crept in to the incorrect wrong dates reported in Form No.3CD/TAR. For convenience, the chart shows the date of actual payment of employees’ contribution of ESI/PF and the due-date as per PF/ESI Act, which fact has been taken note by the Ld.CIT(A) at Page No.12 of his order and which is reproduced as under:
Actual date Type of Incorrect due Actual Sl. as per Employee Welfare Month date reported date of No. relevant contribution Fund in Form 3CD payment statute Provident 11-Aug- 1 July-2021 15-Aug-2021 15-Jul-2021 18,13,700 Fund 2021 May- 14-Jun- 2 ESI 15-Jun-2021 15-May-2021 2021 2021 187 June- 12-Jul- 3 ESI 15-Jul-2021 15-Jun-2021 152 2021 2021 11-Aug- ESI 4 July-2021 15-Aug-2021 15-Jul-2021 152 2021 14-Sep- ESI 5 Aug-2021 15-Sep-2021 15-Jul-2021 2021 152 Sept- 15-Oct- 6 ESI 15-Oct-2021 15-Aug-2021 157 2021 2021 10-Nov- ESI 7 Oct-2021 15-Nov-2021 15-Aug-2021 174 2021 14-Dec- 8 ESI Nov-2021 15-Dec-2021 15-Sep-2021 172 2021 Total 18,14,846
(AY 2022-23) M/s.Macmillan Education India Pvt. Ltd. :: 4 ::
From perusal of the aforesaid chart, it is noted that the assessee has deposited employee’s contribution to PF/ESI on or before the due date as prescribed by the respective statute (ESI/PF). In such a scenario, no disallowance was warranted. However, in order to verify the relevant facts, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO with a limited purpose/direction to verify as to whether the assessee has remitted the employee’s contribution to PF/ESI on or before due date for deposit of employee’s contribution and if it is found that the assessee’s claim (supra) is correct, then, no disallowance is warranted. Needless to say that proper opportunity may be given to the assessee while verifying the question of fact regarding deposit of employee’s contribution as discussed (supra).
The next issue is regarding disallowance made by CPC alleging delayed deposit of Labour Welfare Fund contribution amounting to Rs.7,309/-. It has been submitted by the Ld.AR that this amount has already been disallowed by assessee suo-moto in its computation and therefore, no disallowance was warranted, because, such an action will tantamount to double taxation, which is not permissible. Since, we have restored the aforesaid issue to the file of the AO for the limited purpose/ verification, this issue also to be verified by the AO; and if the assessee’s
(AY 2022-23) M/s.Macmillan Education India Pvt. Ltd. contention is found to be correct, then, no disallowance of Labour Welfare Fund is warranted.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 17th day of May, 2024, in Chennai.