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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” , HYDERABAD
Before: SHRI LALIET KUMAR, HON’BLE & SHRI MANJUNATHA G., HON’BLE
O R D E R PER LALIET KUMAR, J.M.
This appeal is filed by the assessee, feeling aggrieved by the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 13.08.2022 for the AY 2019-20 by raising the following grounds :
That on the facts of the case, the order of the NFAC is bad in law, illegal and without jurisdiction being passed against the principles of natural justice.
That on the facts and in the circumstances and in law the NFAC has erred in not allowing the claim u/s 43B of Income Of the Income tax Act, 1961 (“the Act”), 1961 made in Income Tax Return vis-à-vis not reported in Form 3CD and making an addition to the extent of INR 2,84,07,995/-.
That on the facts and in the circumstances and in law the NFAC has erred in disallowing the employee’s contribution to ESI in accordance with the provisions of Income tax Act, 1961 (“the Act”) 1961 and making an addition to the extent of INR 3,351/-.
4. That on the facts and in the circumstances and in law the NFAC has erred in not giving credit of TDS to the tune of INR 4,16,782/-. 5. That on the facts and in the circumstances and in law, NFAC has erred in holding that Adjustments u/s 143(1)(a) can be made by CPC since it only involves an arithmetical without appreciating that allowability of adjustments (as mentioned in Ground 2 and 3 above) involves legal interpretation. The above grounds are grounds without prejudice to each other. The Appellant craves leave to add, withdraw, alter, modify, amend or vary the above grounds of appeal
before or at the time of hearing.
2. At the outset, Ld.AR for the assessee submitted that in this case, notice was issued for hearing by NFAC to the assessee on 21.07.2022, however, before the said date of hearing, the assessee had made a request to the NFAC that some time may be given for adjudication of the matter, which may be posted for hearing in the month of August. However, to the surprise of the assessee, the NFAC, without considering the request of the assessee had dismissed the appeal of the assessee by passing the impugned order. It was submitted by the Ld.AR that, given a chance, the assessee would appear before the NFAC at the time and place given by the authority and submit all the detailed information to the authority. Further, the Ld.AR has submitted that the assessee is also having the case on merit.
3. On the other hand, Ld.DR had submitted that the assessee is a company and the assessee was aware about its legal rights / obligations. In this case, the issue involved is applicability of disallowance of PF / ESI on account of non fulfilment of the condition as mentioned in section 43B and 36(1)(va). Ld.DR relied on the decision of Hon'ble Supreme Court in the case of Checkmate Services (P.) Ltd. [2022] 143 taxmann.com 178 (SC) and it was submitted that the assessee failed to demonstrate that the payments of ESI/PF were made prior to the due date of depositing the amount as per ESI / PF Act. It was submitted that since the assessee failed to demonstrate before the lower authorities and also the lower authorities had rightly disallowed the claim of the assessee, it was submitted that no purpose would be served if the matter is remanded back to the file of the Ld.CIT(A).
We have heard the rival contentions and perused the material available on record. In the present case, the issue as available from the grounds of appeal is the disallowance of deduction claimed by the assessee u/s 43B of the Act. The said contention required to be satisfied on the basis of document which shows that the contributions have been deposited by the assessee prior to the date as contemplated by the PF / ESI Act. Before The said opportunity was availed by the assessee, NFAC has decided the issue while passing the order on 13.08.2022. In our considered opinion, issue is covered in favour of the Revenue by the judgement of Hon'ble Supreme Court in the case of Checkmate Services (P.) Ltd. (Supra), whereby, this issue has been adjudicated in favour of the Revenue. However, as the case may be, since it is violation of principles of natural justice, deciding the issue by not affording further opportunity to the assessee, in the interest of justice, matter is remanded to the Ld.CIT(A) after considering the decision of Hon'ble Supreme Court in the case of Checkmate Services (P.) Ltd.(supra), subject to payment of costs of Rs.10,000/- (Rupees Ten Thousand only) in favour of Prime Minister National Relief Fund which shall be payable within two months from the date of receipt of this order. Accordingly, appeal is allowed for statistical purpose.