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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH & DR. ARJUN LAL SAINI
O R D E R
PER PAWAN SINGH, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of Learned Commissioner of Income Tax (Appeals), [in short ‘ld. CIT(A)], National Faceless Appeal Centre (in short ‘NFAC’), Delhi dated 28.09.2021, for the Assessment Year (AY) 2018-19. The assessee has raised following grounds of appeal:
1. 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, 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 on the subject, the learned CIT(A) has erred in confirming the action of assessing officer (CPC) in making addition of Rs.10,80,366/- on account of disallowance of employees contribution to P.F. & ESIC u/s 36(1)(va) of the Act.
/AY.2018-19 Vishal Fashions Pvt. Ltd. 3. It is therefore prayed that addition made by the assessing officer and confirmed by CIT(A) may please be deleted.
4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
Brief facts of the case are that assessee-company filed its return of income for assessment year (A.Y.).2018-19 on 12.10.2018 declaring total income of Rs.4,85,51,329/-. The case was selected for scrutiny and return was processed by Central Processing Centre (CPC), Bangalore and intimation under section 143(1) dated 15.11.2019 was sent to the assessee. In the intimation under section 143(1), the Assessing Officer made addition of Rs.10,80,366/- on account of delay in payment of employees’ contribution to Provident Fund (PF) and Employees State Insurance (ESI).
Aggrieved by the additions in the order under section 143(1), the assessee filed appeal before ld. CIT(A). The appeal of assessee was transferred migrated/National Faceless Appeal Center (NFAC) in term of CBDT notification dated 25.09.2020. The assessee before NFAC submitted that in the recent decision of Chennai Tribunal in the case of Doosan Power Systems India Pvt. Ltd, decided the similar issue in favour of assessee. The assessee also relied upon the decision of CIT vs Rajasthan State Beverages Corporation Ltd. (2017) 250 Taxman 0016 (Raj.) wherein the assessee submitted that in the said case was held that a payment was remitted
/AY.2018-19 Vishal Fashions Pvt. Ltd. beyond due date prescribed under the relevant Act but before due date of filling return of income, whether it was employee’s contribution or employer’s contribution. No part of PF or ESI contribution disallowed under section 43B or section 36 of the Act. The NFAC by considering the submission of assessee held that Section 143(1)(a)(iv) provides that where return has been made under section 139 or in response to notice under sub- section (1) of Section142 then return shall be processed. The NFAC also referred various decisions of the different High Courts on the issue and held that there are conflict decisions of different High Courts on the issue. The latest amendment by way of Finance Act, 2021 which is purely clarificatory, to clear a meaning of a provision of a principle Act which was clearly implicit. Based on judicial decisions, it can be safely concluded that amendment brought out by Finance Act, 2021 will be applicable to this issue in the instant appeal for earlier year also and ultimately dismissed the appeal of assessee. Aggrieved by the decisions of NFAC/CIT(A), the assessee has filed present appeal before this Tribunal.
We have heard the submission of Learned Authorized Representative (ld. AR) of the assessee and Learned Senior Departmental Representative (ld. Sr. DR) for the Revenue. The ld. AR of the assessee submits that no adjustment by way of addition
/AY.2018-19 Vishal Fashions Pvt. Ltd. can be made in the return of income by CPC. The CPC has made addition without giving opportunity of hearing and the same is liable to be deleted/ set-aside. The ld. AR during his submission fairly agreed that the decision of jurisdictional High Court in case of CIT vs Gujarat State Road Transport Corporation (GSRTC) reported 41 taxmann.com 100 (Guj.), on the similar issue is against the assessee. However, the ld.AR for the assessee in alternative submission submits that Hon'ble Gujarat High Court in the recent decision in Salasar Laminates Ltd. vs DCIT in Tax Appeal No.1186 of 2018 dated 01.10.2018 while considering the similar question noted that appeal against the decision of Gujarat High Court in CIT vs GSRTC is pending before Hon'ble Supreme Court and Special Leave has been granted. The Hon'ble High Court on the prayer of assessee in the said case allowed that as and when the decision is rendered in the said case and in case judgment of High Court is reversed and in case the said appeal is allowed, the assessee may approach the High Court to claim the benefit of the judgment. The ld. AR for the assessee submits that a direction may be given to the ld. CIT(A) or Assessing Officer in case the decision of GSRTC is reversed by Hon'ble Supreme Court, the assessee may be allowed similar relief.
On the other hand, Ld. Sr. DR for the Revenue supported the order of lower authorities.
/AY.2018-19 Vishal Fashions Pvt. Ltd. 6. We have considered the rival submission both the parties and perused the order of lower authorities carefully. We find that CPC/AO disallow the deduction of ESI and PF as the same was not remitted to the authorities concerned before the due date. The ld. CIT(A)/NFAC uphold the order of CPC by taking view was a divergent view of the High Court. We find that at this stage that the grounds of appeal raised by assessee is squarely covered against the assessee. However, we find a little merit in the alternative grounds of ld. AR of the assessee on the basis of decision of Hon'ble Jurisdiction in subsequent decision in Salsar Laminates Ltd. vs DCIT (supra), wherein the Hon'ble High Court, though dismiss the appeal, however it was directed that if the decision of GSRTC VS DCIT (supra) is reversed by Hon'ble Apex Court, the assesse is given opportunity to revive his appeal by filing application for such purpose. Therefore, following the similar direction of the Hon’ble Jurisdictional High Court, the appeal of the assessee is dismissed at this stage, however the Assessing Officer is directed that in the decision of GSRTC Vs DCIT (supra) is reversed by Hon'ble Apex Court, the assessee be allowed deduction of Rs.10,80,366/-. With this direction, the appeal of the assessee is dismissed.
7. In the result, the appeal of the assessee is dismissed.
/AY.2018-19 Vishal Fashions Pvt. Ltd. Order pronounced on 22/03/2022, in open Court and the result was placed on notice board.