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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI
Per B.M. Biyani, A.M.:
THIS APPEAL:
This appeal filed by the assessee is directed against the order dated 18.10.2021 of learned Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre [“Ld. CIT(A)”], which in turn arises out of the intimation of assessment dated 18.11.2019 passed by the learned DCIT (CPC), Bangalore [“Ld. AO”] u/s 143(1) of the Income-tax Act, 1961 [“the Act”] for the Assessment-Year 2018-19.
ITA No.263/Ind/2021 A.Y. 2018-19 Page 2 of 6 BACKGROUND:
Brief facts are such that the assessee filed return declaring a total income of Rs. 10,48,730/-. The Ld. AO passed intimation of assessment u/s 143(1) at a total income of Rs. 12,22,480/- after making (i) disallowance of Rs. 4,635/- on account of delayed payment of employees’ contribution to PF / ESI, (ii) disallowance of bonus expenditure of Rs. 1,66,621/- u/s 43B and (iii) disallowance of professional tax of Rs. 2,500/- u/s 43B. Being aggrieved by the disallowances made by Ld. AO, the assessee filed appeal to Ld. CIT(A). The Ld. CIT(A) confirmed the disallowance of Rs. 4,635/- but did not adjudicate upon the disallowance of Rs. 1,66,621/- and Rs. 2,500/- on account of bonus expenditure and professional tax respectively. Being aggrieved by the order of Ld. CIT(A), the assessee has filed this appeal and now before us.
GROUNDS:
The assessee has raised following grounds:
“1. That the order passed by learned CIT(A) is bad in law and against the facts of the case. 2. On the fact and circumstances of the case and in law, Ld. CIT(A) erred in passing the order towards the upward adjustment made by the DCIT(CPC) without even discussing or taking into consideration all of the grounds submitted by the appellant. 3. On the fact and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming incorrect amount of INR 61,730/- towards late payment of employees’ contribution of ESIC, even though the upward adjustment made by the DCIT(CPC) on account of the same was INR 4,635/- by applying provisions of section 36(1) and the same was paid by appellant before due-date of filling return. 4. On the fact and circumstances of the case and in law, the Ld. CIT(A) has erred in not deciding the upward adjustment made by the DCIT(CPC) on account of payment of bonus of INR 1,66,621/- though the same was paid before due-date of filing return which allowable u/s 43B.
ITA No.263/Ind/2021 A.Y. 2018-19 Page 3 of 6 5. On the fact and circumstances of the case and in law, the Ld. CIT(A) has erred in not deciding the upward adjustment made by the DCIT(CPC) on account of payment of professional tax of INR 2,500/- which was disallowable u/s 43B and was already offered to tax by the appellant. 6. On the fact and circumstances of the case and in law, Ld. CIT(A) erred in not taking into consideration various judgments by higher authorities passed in the favour of the assessee. 7. The appellant craves leave to add, amend alter or otherwise raise any other ground of appeal.” ISSUES:
Precisely stated, the following issues emanate from the various Grounds raised by the assessee:
(i) The Ld. CIT(A) has wrongly confirmed the disallowance of employees’ contribution to Employee State Insurance (ESI) of Rs. 4,635/- [Ld. CIT(A) has inadvertently mentioned as Rs. 61,730/-] u/s 36(1)(va).
(ii) The Ld. CIT(A) has erred in not deciding the ground raised by the assessee with regard to the disallowance of bonus expenditure of Rs. 1,66,621/- made by Ld. AO u/s 43B.
(iii) The Ld. CIT(A) has erred in not deciding the ground raised by the assessee with regard to the disallowance of professional tax expenditure of Rs. 2,500/- made by Ld. AO u/s 43B.
ISSUE No. 1 – EMPLOYEE’S CONTRIBUTION TO PF / ESI:
The first issue is the disallowance of Rs. 4,635/- [Ld. CIT(A) has inadvertently mentioned as Rs. 61,730/-] on account of the late payment of Employees’ Contribution to ESI after the due dates under the applicable laws.
The issue is squarely covered in favour of assessee by various decisions of this Bench. This Bench has consistently held that the employees’ contribution to PF / ESI which are collected and paid by the
ITA No.263/Ind/2021 A.Y. 2018-19 Page 4 of 6 employer, though after the due dates applicable under the laws governing PF / ESI but upto the due date specified u/s 43B of the Income-tax Act, 1961 i.e. upto the due date for filing of Return u/s 139(1), does not attract disallowance. This Bench has recently held so and therefore deleted the disallowance made by Ld. AO in various orders including the following:
(a) ITA No. 175 / Ind / 2021 Shri Virendra Kumar Tiwari Vs. CIT(A), NFAC, order dated 30.03.2022
(b) ITA No. 184 / Ind / 2021 M/s Prestige Fabricators Pvt. Ltd. Vs. ACIT-4(1), Indore order dated 30.03.2022
(c) ITA No. 223 / Ind / 2021 Kamal Kumar Jain Vs. DCIT, CPC, Bangalore, order dated 30.03.2022
Hence we delete the disallowance of Rs. 4,635/- made by Ld. AO. Accordingly, this issue of assessee is allowed.
ISSUE No. 2 and 3 – DISALLOWANCE OF BONUS EXP. OF RS. 1,66,621/- AND PROFESSIONAL TAX OF RS. 2,500/-:
The next issues are the disallowance of Rs. 1,66,621/- and Rs. 2,500/- on account of bonus expenditure and professional tax respectively, made by Ld. AO u/s 43B of the Act. The Ld. AR carried our attention to Page No. 2 of the order of Ld. CIT(A) where the Ld. CIT(A) has clearly mentioned that the assessee raised Grounds to challenge these disallowances before him. Thereafter, the Ld. AR carried our attention to the rest of order passed by Ld. CIT(A) and demonstrated that the Ld. CIT(A) has nowhere dealt with those Grounds and hence those Grounds remained un-adjudicated at the level of Ld. CIT(A). Therefore the Ld. AR requested to remand these issues back to Ld. CIT(A) with necessary direction.
Ld. DR concurred with the submissions of Ld. AR and agreed that these issues may be remanded back to the Ld. CIT(A).
ITA No.263/Ind/2021 A.Y. 2018-19 Page 5 of 6 9. On a careful consideration, we are satisfied that the Ld. CIT(A) has not adjudicated the Grounds involving these issues of the assessee. Hence we find it appropriate to remit these two issues, viz. (i) disallowance of bonus expenditure of Rs. 1,66,621/- u/s 43B, and (ii) disallowance of professional tax of Rs. 2,500/- u/s 43B to the Ld. CIT(A). The Ld. CIT(A) shall decide these issues on merit after giving an opportunity of hearing to the assessee. Accordingly, these issues are allowed for statistical purpose.
DISPOSITION:
In the result, this appeal of assessee is partly allowed for statistical purpose.
Order pronounced as per Rule 34 of I.T.A.T. Rules 1963 on this 1st day of June, 2022.
Sd/- Sd/-
(SUCHITRA KAMBLE) (B.M. BIYANI)
Judicial Member Accountant Member
Indore, 01, June, 2022
Patel/ Sr. P.S. Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
ITA No.263/Ind/2021 A.Y. 2018-19 Page 6 of 6
Date of taking dictation 25.5.22 2. Date of typing & draft order placed before the Dictating Member 3. Date on which the approved draft comes to the Sr. P.S./P.S. 4. Date on which the fair order is placed before the Dictating Member for pronouncement 5. Date on which the file goes to the Bench Clerk 6. Date on which the file goes to the Head Clerk
Date on which the file goes to the Assistant Registrar for signature on the order
Date of despatch of the Order