NEERUS ENSEMBLES PRIVATE LIMITED,HYDERABAD vs. DCIT, CIRCLE-16(1), HYDERABAD

This appeal filed by the assessee is directed against the order dated 22/11/2022 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2019-20.

Facts of the case, in brief, are that the assessee is a company engaged in the business of retail in garments and other accessories. Assessee filed its return of income for the A.Y 2019- 20 on 21.10.2019 declaring total income of Rs.6,95,37,230/-. The CPC sent an intimation u/s 143(1) of the Act by determining total income of the assessee at Rs.7,14,16,250/- wherein disallowance of Rs.18,79,022/- was made on account of delayed payment of employee’s contribution to PF & ESI and disallowance of Rs.27,25,000/- u/s 37 of the Act.

The assessee filed appeal before the CIT (A) NFAC who dismissed the appeal filed by the assessee.

Aggrieved with such order of the learned CIT (A) NFAC, the assessee is in appeal before the Tribunal by raising the following grounds:

So far as grounds of appeal No. 2 & 3 are concerned, the same relate to the disallowance of Rs.18,79,022/- by the CPC u/s 36(1)(va) which has been confirmed by the learned CIT (A) NFAC.

The learned Counsel for the assessee filed a copy of the audit report and drew the attention of the Bench to clause 20(b) and submitted that the assessee has paid some of the statutory dues on or before the due dates as prescribed under the PF & ESI Acts and therefore, suitable direction should be given to the Assessing Officer to give necessary relief after due verification. In absence of any objection from the side of the learned DR, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to give an opportunity to the assessee to substantiate with evidence to his satisfaction that the amount of Rs.18,79,022/-has bene paid on or before the due date prescribed under the relevant Act and decide the issue as per fact and law. While doing so, the Assessing Officer is directed to keep in mind the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd. Vs. CIT reported in (2022) 143 taxmann.com 178 (S.C)/448 ITR 518 dated 12.10.2022. The grounds raised by the assessee are accordingly allowed for statistical purposes.

Grounds of appeal No. 4 & 5 relate to the order of the learned CIT (A) NFAC in confirming the disallowance of Rs.27,25,000/- u/s 37 of the I.T. Act.

The learned Counsel for the assessee at the outset drew the attention of the Bench to the computation of total income and submitted that the assessee has already suo moto disallowed an amount of Rs.28,41,847/- which includes the amount of Rs.27,25,000/-. Therefore, the addition of the same by the CPC and confirmed by the learned CIT (A) NFAC amounts to double addition. Considering the totality of the facts of the case and considering the fact that an amount of Rs.28,41,847/- has been suo moto disallowed by the assessee in the computation of total income, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to verify the same and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. Grounds 4 & 5 raised by the assessee are accordingly allowed for statistical purposes.

Grounds 6 & 7 were not pressed by the learned Counsel for the assessee therefore, the above two grounds are dismissed as not pressed.

In the result, appeal filed by the assessee is allowed for statistical purposes.