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Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘B’, CHANDIGARH
Before: SHRI A.D. JAIN & DR KRINWANT SAHAY
आदेश/Order Per Dr. Krinwant Sahay, A.M.:
Appeal in this case has been filed by the Assessee against the order dated 30.05.2022 of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi on the following Grounds:
That the order dated 30.05.2022 passed under section 250 by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre,
556 --Chd-2022 – M/s Punjab Small Industries and Export Corporation Ltd, Chandigarh 2
Delhi in Appeal No. ITBA/NFAC/S/250/2022- 23/1043241599 (1) is contrary to law and facts of the case.
2. That in the facts and circumstances of the case Learned Commissioner of Income Tax (Appeals) gravelly erred in upholding the action of the ld. Assessing Officer who had made an addition of Rs. 41,23,564/- on the alleged ground that the payments in respect of ESI/PF were made late. Although, the appellant had made the payments much before the due date of filing of the Income Tax Return.
(a) That in the presence of documentary evidence regarding the payment of bonus amounting to Rs. 68,50,825/-, ld. Commissioner of Income Tax (Appeals) gravelly erred in setting aside the issue of payment of bonus for verification to the ld. Assessing Officer.
(b) That in the facts and circumstances of the case, ld. Commissioner of Income Tax (Appeals) gravelly erred in making disallowance of Rs. 33,811/- [Rs.68,84,636/- minus Rs. 68,50,825/-] under section 43(B) with respect to the payment of bonus.
(c). Without prejudice to the above ground, payment of bonus of Rs. 33,811/- may kindly be allowed in the A.Y.2020-21.
That the appellant craves to add, amend or alter any ground of appeal before or at the time of hearing of appeal, with the permission of the 556 --Chd-2022 – M/s Punjab Small Industries and Export Corporation Ltd, Chandigarh 3
Hon'ble Income Tax Appellate Tribunal, Chandigarh.
Ground No.1 is general in nature.
3. Appeal on Ground No. 2 is against the disallowance of Rs. 41,23,564/- of the late payment of ESI / PF u/s 36(1)(va) of the Act. Brief facts of the case and submissions of the Assessee are that during the processing of the Assessee’s ITR, the Asstt. Director of Income Tax, CPC, Banglore disallowed this amount of Rs. 41,23,564/- as late payment of ESI/PF and this disallowance was confirmed by the ld. CIT(A) in his order. During the proceedings before us, the ld. Counsel of the Assessee submitted that the Assessee is a limited company wholly owned by the Govt. of Punjab which derived income as a Nodal Agency for the State and Central Govt. to help the entrepreneurs in the State to set up new industries. The original return was filed on 29.10.2019 declaring an income of Rs. 49,10,74,520/-. Thereafter, the Assessee has filed the revised return on 29.10.2019 declaring an income of Rs. 49,08,24,170/-. The return was e-filed and the Audited Report in Form No. 3CA / 3CD was duly submitted online. Subsequent to that intimation order under Section 143(1) of the Income Tax Act, 1961 was received vide Communication
556 --Chd-2022 – M/s Punjab Small Industries and Export Corporation Ltd, Chandigarh 4 No.CPC/1920/V6/2008047246 wherein following additions were made by the Asstt. Director of Income lax. CPC, Banglore.
1. Addition of Rs. 41,23,564/- on the alleged ground that the payments in respect of ESI/PF were made late. Although, the Assessee had made the payments much before the due date df filing of Income Tx Return.
2. Disallowing the expenses of bonus paid at Rs 68,84,636/- under section 43B of the Income Tax Act. 1961. 4. The ld. DR relied on the order of the ld. CIT(A).
We have considered the arguments made by the ld. Counsel of the Assessee and his written submissions filed during the proceedings before us. The Hon'ble Supreme Court in the case of ‘Checkmate Services Pvt. Ltd vs. CIT’, in Civil Appeal No. 2833 of 2016 dated 12.10.2022 has clearly held that the late payment of ESI / PF as per the ESI / PF Act is not allowable u/s 36(1)(va) of the Act. However, the Cuttack Bench of the ITAT in the case of ‘Nirakar Security & Consultancy Services Pvt. Ltd vs. ITO’, in order dated 17.10.2022 held that the disallowed amount of PF and ESI u/s 36(1)(va) of the Act is an income in the hands of the Assessee.
556 --Chd-2022 – M/s Punjab Small Industries and Export Corporation Ltd, Chandigarh 5 However, all subsequent payments of the same, it would be business expenditure which can be claimed u/s 37(1) of the Income Tax Act, 1961. The ld. Counsel of the Assessee also requested that issue may kindly be set aside to the lower authorities for afresh adjudication.
Accordingly, Appeal on this Ground is remanded to the ld. CIT(A) for fresh adjudication in view of the order of the Cuttack Bench of the ITAT in the case of ‘Nirakar Security & Consultancy Services Pvt Ltd. v ITO’, (supra). The Ground of appeal is allowed for statistical purposes.
7. Appeal on Ground No. 3 is against the disallowance of Rs. 68,84,636/- u/s 43B of the Income Tax Act, 1961. The findings of the ld. CIT(A) on this issue is as under:-
“This pertains of disallowance of bonus of Rs. 68,84,636/-by CPC u/s 43B of the Act. In this regard, the Appellant has submitted details of bonus paid on or before the due date of filing the return u/s 139(1). The Appellant has also furnished supporting vouchers as well. As per Appellant's contention the bonus amount of Rs.68,50,825/-has been paid on or before the due date of filing the return i.e. 31/10/2019. Therefore, this amount of Rs.68,50,825/-is allowable u/s 43B as per the proviso to the said section. I have considered the arguments of the Appellant and also perused copies of various vouchers in support of 556 --Chd-2022 – M/s Punjab Small Industries and Export Corporation Ltd, Chandigarh 6 payment of bonus amounting to Rs.68,50,825/-. However, it would be apt that the Appellant furnishes all these details online for the' AO to verify. Accordingly, the Appellant is directed to furnish online all relevant details before the AO for verification. The AO is directed to verify whether the amount of bonus and ex gratia of Rs.68,50,825/- has been actually paid by the Appellant on or before the due date of filing the return of income u/s 139(1) for A.Y.2019-20. If the claim of the Appellant is found correct, the amount of Rs. 68,50,825/- (out of the disallowed amount of Rs. 68,84,636/-by CPC u/s 43B ) is directed to be deleted. If found contrary, the action of the CPC stands upheld. Therefore, to that extent, the ground is allowed for statistical purpose. As regards, the remaining amount of Rs. 33,811/- (Rs.68,84,636 - Rs. 68,50,825/-), since the same has not been paid on or before the due date of filing the return u/s 139(1), the disallowance made by CPC u/s 43B stands confirmed to the extent of Rs. 33,811/- only. The AO is directed to allow this amount of Rs. 33,811/- in the financial year in which it has been actually paid. The Appellant may furnish online such details before the AO for verification.”
During the proceedings before us, the ld. Counsel for the Assessee has filed a written submission on this issue which is as under:-
“GROUND NO. 3 that the Ld. Assistant Director of Income tax, CPC. had disallowed the expenses of bonus paid at Rs. Rs. 68,50.825/- under section 43B of the Income Tax
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Act. 1961. Before the Commissioner of Income Tax (Appeals), the appellant had filed all supporting vouchers and details that bonus of Rs. 68,84,636/- was paid before the due date of filing of the Income tax Return i.e. 31.10.2019. Even after accepting the evidence and verifying the same, the Hon'ble Commissioner of Income Tax (Appeals) directed the appellant to furnish the said details online for verification by the Assessing Officer whether the amount of bonus has been paid by the appellant on or before the due date of filing of return. As submitted supra, complete details along with supporting documents were duly filed before the Commissioner of Income fax (Appeals). The ld. Commissioner of Income Tax (Appeals) even after examining the documents, had directed the appellant to file the same online whereas there is no provision on the portal to file online submissions of documents to the assessing officer, till the proceedings are not pending or open, as such it is not possible for the appellant to upload the documents.”
The ld. DR relied on the order of the ld. CIT(A).
We have considered the findings of the ld. CIT(A) on this issue and we have also considered the written submissions filed by the ld. AR during the proceeding before us. We think that the facts narrated by the Counsel of the Assessee are correct to the extent that in ITBA system there is no provision on the portal to file online submission of documents to the Assessing Officer till the proceedings are not 556 --Chd-2022 – M/s Punjab Small Industries and Export Corporation Ltd, Chandigarh 8 pending or open, therefore, ld. CIT(A) is hereby directed to verify the documents filed by the Counsel of the Assessee and decide the issue afresh in accordance with the provisions of the Income Tax Act, 1961.
Ground No.4 is general is nature.
In the result, the appeal of the Assessee is allowed for statistical purposes.
Order pronounced on 27.06.2024