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Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhanatpan
Before: Shri Vijay Pal Rao, Vice-Shri Balakrishnan, S.
Per Vijay Pal Rao, Vice President
This appeal filed by the assessee is directed against the order dated 31/07/2024 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2021-22.
The assessee has raised the following grounds: “
1. The order of the CIT (A) is erroneous both on facts and in law.
2. The learned CIT (A) erred in confirming the addition made of Rs.86,904/- being late payment of PF & ESI when the Page 1 of 6 appellant in the computation has already disallowed the same. 3. The learned CIT (A) ought to have directed the Assessing Officer to delete the addition made of Rs.86,904/- when such disallowance was already made. 4. Any other ground that may be urged at the time of hearing”.
The learned AR of the assessee has submitted that the CPC while processing the return of income has made an addition of Rs.86,904/- on account of late payment of employees’ contribution to PF & ESI whereas the assessee in the computation of income has already made suo motto disallowance of Rs.86,904/- on account of belated payment towards employees’ contribution to PF & ESI. Thus, the learned AR has submitted that the disallowance made by the CPC while processing the return of income u/s 143(1) amounts to double addition. She has referred to the computation of income and pointed out that the assessee has added the said amount of Rs.86,904/- to the total income on account of belated payment towards employees’ contribution to PF & ESI, however, mistakenly the provisions of section 43B were mentioned instead of section 36(1)(va) of the I.T. Act, 1961. Thus, she has pleaded that the double addition made by the CPC may be deleted.
The learned DR, on the other hand, relied upon the orders of the authorities below.
We have considered the rival submissions as well as the relevant material available on record. In the statement of income placed at Page 2 of the paper book, the assessee has suo motto disallowed Rs.86,904/- as under:
Page 3 of 6 5.1 The assessee raised this issue before the learned CIT (A) and specifically pointed out this fact in Para 11 of statement of facts reproduced in the impugned order at page No.4 as under:
The learned CIT (A) without considering the aspect of double taxation of the said amount has simply dismissed the appeal of the assessee by following the judgment of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT [2022] 143 taxmann.com 278 (SC) held in Para 9.3.4 of his order as under:
Once the assessee has brought on record this fact that the assessee has already made a suo motto disallowance on this account, then sustaining the disallowance/addition made by the CPC towards belated payment of employees’ contribution to PF & ESI amounts to double taxation of the same income, then sustaining the addition by the learned CIT (A) which is highly arbitrary and unjustified. Accordingly, in view of the facts as discussed above, the addition made by the CPC and sustained by the learned CIT (A) is deleted. We may clarify that this disallowance attracts the provisions of section 36(1)(va) and not provisions of section 43(B) of the I.T. Act, 1961. Therefore, the assessee cannot claim on account of payment of employees’ contribution in the subsequent year u/s 43B of the I.T. Act, 1961.
In the result, appeal filed by the assessee is allowed.