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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JM &DR. A.L.SAINI, AM
िनधा�रती क� ओर से / Assessee by : Shri Mehul Shah, C.A राज�व क� ओर से / Respondent by : Shri Vinod Kumar, Sr-DR सुनवाई क� तारीख / Date of Hearing : 23/05/2023 घोषणा क� तारीख / Date of Pronouncement: 31/05/2023 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year 2017- 18, is directed against the order passed by the National Faceless Appeal Centre (‘NFAC’ for short)/Ld. ‘CIT(A)’ dated 19.01.2023, which in turn arises out of an assessment order passed by the CPC Banglore (AO), u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 16.10.2019.
Grounds of appeal
raised by the assessee are as follows: “1. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer (Central Processing Centre, Bengaluru) in making adjustment u/s 143(1) although the same adjustment does not fall within the ambit of section 143(1)(a)(i) to 143(1)(a)(vi).
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Officer (Central Processing Centre, Bangaluru) in making addition of Rs.57,74,927/- on account of disallowance of employers and employees contribution to P.F. & ESIC u/s 36(1)(va) of the Act..
3. Without prejudice to the above ground, the Ld. CIT(A) ought to have considered the fact that out of Rs.57,74,927/- the employees’ contribution is only Rs.25,57,731/- and the remaining amount Rs.32,17,196/- pertains to employer’s which is liable to be allowed u/s 43B.
4. It is therefore prayed that the above addition made by the Assessing Officer may please be deleted.
5. Appellant crave sleave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
3. Ground No. 1 raised by the assessee is not argued/not pressed, therefore we dismiss ground No.1 raised by the assessee, as not pressed.
4. All other remaining grounds raised
by the assessee are interconnected and mixed therefore, we shall adjudicate them together.
5. At the outset, Learned Counsel for the assessee, begins by pointing out that very short issue is involved in the assessee`s appeal which pertains to employees contribution to Provident Fund and ESIC and employers’ contribution to Provident Fund & ESIC. The ld Counsel has fairly agreed that issue relating to ‘employees contribution to Provident Fund and ESIC’ is covered against the assessee, by the judgment of Hon'ble Supreme Court in the case of Checkmate Services Pvt Ltd Vs CIT-I, in Civil Appeal No. 2833 of 2016, dated 12/10/2022. Therefore, the claim of the assessee relating to employees contribution to Provident Fund and ESIC may be disallowed.
6. However, the Ld. Counsel pleaded that claim relating to employers’ contribution to Provident Fund & ESIC may be allowed u/s 43B of the Act, provided it is paid by the assessee within the due date for filing return of income under section 139(1) of the Act.
7. The ld Counsel stated that total disallowance was made by the CPC Banglore (AO) to the tune of Rs.57,74,927/- which include employee`s as well as employers` contribution to PF and ESIC, which is wrong. As per audit report, the total disallowance comes to Rs.65,44,308/- (employee +employer). Out of the total amount of Rs.65,44,308/-, the disallowance of Rs.36,88,958/- pertains to employers` contribution to Provident Fund & ESIC, which was paid before filing return of income u/s 139(1) of the Act, therefore it should be allowed. The balance amount to the tune of Rs.28,55,350/- pertains to employees contribution to Provident Fund & ESIC. Therefore Ld. Counsel contended that the employees` contribution towards Provident Fund & ESIC of Rs.28,55,350/- may be disallowed by following the judgment of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra).
8. On the other hand, Ld. Sr-DR for the Revenue has fairly agreed with the submission made by Ld. Counsel for the assessee and stated that if the employers` contribution towards Provident Fund & ESIC is paid on or before the due date of filing its return of income u/s 139(1) of the Act then the same may be allowed u/s 43B of the Act. However, so far employees` contribution towards Provident Fund & ESIC are concerned, same may be disallowed in pursuance of the order of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra).
10. We have heard both the parties and perused the materials available on record. We note that Ld. Counsel for the assessee, submitted before the Bench a table showing bifurcation of employee`s and employers` contribution towards Provident Fund & ESIC, which is reproduced below:
Therefore, we note that the employee’s contribution to Provident Fund & ESIC is to the tune of Rs.28,55,350/-, which is hereby disallowed by following the judgment of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra).
However, since the ld Counsel for the assessee claimed that employers’ contribution towards Provident Fund & ESIC to the tune of Rs.36,88,958/- was paid by the assessee on or before the due date of filing its return of income, therefore it is should be allowed.
Therefore, considering the above facts, for employer`s contribution, we direct the Assessing Officer to examine the date of payment of employers` contribution towards Provident Fund & ESIC and if he finds that said contribution was paid by the assessee, on or before the due date of filing its return of income u/s 139(1) of the Act, in that situation, the Assessing Officer should allow the said deduction of Rs.36,88,958/-. Thus, grounds of assessee’s appeal are partly allowed for statistical purposes. We order accordingly.
In the result, appeal of the assessee is partly allowed for statistical purposes, in above terms.