MUKTAR AUTOMOBILES PRIVATE LIMITED,VERNA vs. DCIT, CPC, BENGALURU

Without rearticulating grounds from appeal memo, its apt to voice that, the sole & substantive ground of present appeals are directed against disallowance made u/s 36(1)(va) on the basis of information reported in tax audit report [for short ‘TAR’]. Since both these appeals involved the same issue for the purpose of brevity and convenience these are heard together for a common order.

Briefly stated, the facts of 3.1 The assessee is a company, filed its return of income for AY 2018-19 on 07/10/2018 declaring total income of ₹NIL after adjusting brought forward losses at (-) ₹60,90,693/-.

Briefly stated, the facts of 4.1 The appellant is a Private Limited Company having dealership of M/s. Mahindra & Mahindra Ltd., whereby they sell Mahindra & Mahindra brand vehicles in the state of Goa. ITAT-Panaji Page 2 of 4 AY : 2018- 4.2 The appellant filed its return of income on 25/02/2019 declaring total income at ₹87,96,280/-. Subsequently, the return was processed by CPC u/s 143(1) of the Act by making adjustment of ₹30,05,030/-, on account of disallowance u/s 36(1)(va) of the Act.

Aggrieved by the aforestated additions u/s 36(1)(va) of the Act, both these assessee’s taken up the matter before first appellate authority and in the event of unsuccessful attempt, the assessees brought up the matter in appeal before the Tribunal against said disallowance alleging the action of both the tax authorities below as contra-legem.

It is an undisputed fact that, the TAR filed by both the assessees indicated the prescribed due dates of payment to the relevant funds under the respective Acts relating to employees share and the said amounts were deposited by both the assessees beyond such prescribed due dates but before the filing of the return u/s 139(1) of the Act. The case of the assessee before the lower tax authorities was that such payments made on or before the due date as per section 139(1) of the Act amounts to sufficient compliance of the provisions in terms of section 43B of the Act, and hence not calling for any disallowance. Per contra, the Department has set up a case that the disallowance is warranted and inevitable because delayed deposit of the employees share beyond the prescribed due date under the respective Act is unsheltered by section 43B of the Act.

Nota bene, a similar issue came before the co-ordinate bench of the Tribunal in the case of “M/s Kothari Agritech Pvt. Ltd. Vs ADIT, Bengaluru” vide wherein the Tribunal following the latest judgement of Hon’ble Supreme Court in the case of “Checkmate Services P. Ltd. & Ors Vs CIT & Ors” reported in 448 ITR 518, has after an sumptuous discussion vide para 4 to 20 thereof, adjudicated the issue in favour of Revenue and against the assessee, by upholding the disallowance made u/s 36(1)(va) of the Act, where ITAT-Panaji Page 3 of 4 AY : 2018- the assessee failed to deposit employee’s share or contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees as the case may be, on or before the prescribed due date under the respective Act.

Ld. AR appearing on behalf assessee has fairy submitted that, the subject matter of adjudication is no more res-Integra in the light of Hon’ble Supreme Court decision in “Checkmate Services P. Ltd. & Ors Vs CIT & Ors” (Supra) and following the same the co-ordinate bench adjudicated the issue in favour of revenue in ‘Sonigara Gold LLP Vs ITO (ITA No. 179/PUN/2023)’, ‘ACIT Vs SMS Ltd (ITA No. 24/NAG/2022)’, and in ‘Purushottam Kumar Agrawal Vs ACIT (ITA No. 42/RPR/2022)’.

Since the facts in present cases are similar to that of “M/s Kothari Agritech Pvt. Ltd. Vs ADIT, Bengaluru” (supra), in the light of Hon’ble Apex Court judgement in “Checkmate Services P. Ltd. & Ors Vs CIT & Ors” (Supra), we hold that the Ld. NFAC was justified in sustaining the adjustment carried out u/s 143(1) by CPC on account of delayed deposit of employees share to the relevant funds. Ergo we approbate the disallowance with no infirmity.

Resultantly, both these appeals of different assessee are DISMISSED. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Wednesday 12th day of July, 2023.