INSCRIBE GRAPHICS LTD,CHENNAI vs. DCIT, CORPORATE CIRCLE- 1(1), CHENNAI

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ITA 359/CHNY/2024Status: DisposedITAT Chennai01 May 2024AY 2018-19Bench: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI (Judicial Member)3 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the disallowance under Section 143(1) was permissible and that the issue on merits was covered by the Supreme Court decision. However, the CIT(A) had not adjudicated the specific ground regarding PF remittance within 15 days of salary disbursement.

What were the facts?

The assessee's return was processed under Section 143(1) where a disallowance of Rs. 19.46 Lacs was made for non-deposit of employees' ESI/PF contributions before the due date. The assessee argued that this adjustment was beyond the scope of Section 143(1) and that PF was remitted within the permissible period.

What were the issues?

Whether disallowance for delayed deposit of employee's contribution to PF/ESI can be made under Section 143(1), and whether the assessee's explanation for delayed remittance was properly considered.

Which sections of the Income-tax Act were involved?

Section 143(1)

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2018- 19 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 17-01-2024 in the matter of an intimation issued by CPC u/s 143(1) on 17.06.2020. In the intimation, CPC disallowed a sum of Rs.19.46 Lacs on account of failure to deposit employees’ contribution to ESI / PF before due date as specified in respective welfare acts.

1.

During appellate proceedings, the assessee contended that the adjustment was beyond the scope of Sec. 143(1) since it was a debatable issue. It was also contended that PF was remitted within 15 days from the disbursement of salary as permitted under the act. The Ld. CIT(A), relying on the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (143 Taxmann.com 178), confirmed the disallowance. The Ld. CIT(A) also held that this adjustment could be made while processing return of income u/s 143(1) as per various decisions of Tribunal. Aggrieved, the assessee is in further appeal before us.

2.

The Ld. AR reiterated that this adjustment could not be made u/s 143(1). The Ld. AR also submitted that the ground that PF was remitted within 15 days from the disbursement of salary as permitted under the act, was not adjudicated by Ld. CIT(A). The Ld. Sr. DR opposed any interference in the impugned order.

3.

We find that the issue on merits is squarely covered against the assessee by the cited decision of Hon’ble Supreme Court. This adjustment could also be made u/s 143(1) as per various decision of Tribunal including the decision of Chennai Tribunal in M/s Shree Gokulam Chit & Finance Co. Pvt. Ltd. (MA Nos. 97/Chny/2023 & ors. dated 31.07.2023). So far as the argument that PF was remitted within 15 days from the disbursement of salary as permitted under the act, is concerned, this aspect has not been dealt with by Ld. CIT(A). For the aforesaid limited purpose, we restore the matter back to the file of Ld. CIT(A) to deal with the same. The assessee is directed to substantiate the same.

4.

The appeal stand partly allowed for statistical purposes. Order pronounced on 1st May, 2024

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