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Facts
The assessee filed its return of income, which was processed, disallowing deductions claimed under sections 43B and 36(1)(va). The assessee appealed, and the CIT(A) partly allowed the appeal.
Held
The Tribunal held that the disallowance under section 43B should be remanded to the AO for verification of payment dates. For the disallowance under section 36(1)(va), the Tribunal found that the assessee had demonstrated timely payment and directed the AO to delete the disallowance.
Key Issues
Whether disallowance of deductions claimed under sections 43B and 36(1)(va) was justified, considering the payment dates and evidence provided by the assessee.
Sections Cited
43B, 36(1)(va), 143(1), 154, 250, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi in Appeal No. NFAC/2018-19/10208014 dated 15.01.2025 u/s 250 of the Income Tax Act, 1961 for Assessment Year 2019-20 arising out of the order passed u/s 154 of the Income Tax Act, 1961 dated 12.12.2012 by the CPC, Bengaluru.
Brief facts of the case are that assessee had filed its return of income on 29.11.2019 declaring total income of Rs. 69,31,88,730/-. The return was processed u/s 143(1) of the Act on 17.09.2020 wherein the deduction of expenditure claimed u/s 43B and u/s 36(1)(va) were disallowed. The assessee Natwest Digital Services India Private Limited Successor Entity to NWM Services India Private Limited vs. ACIT filed a rectification application u/s 154 of the Act on 02.12.2020, 25.11.202 and 31.03.2021 and the said applications were rejected by the CPC vide order dated 21.12.2022 passed u/s 154 of the Act.
Against this order, the assessee filed appeal before the Ld. CIT(A), who partly allowed the appeal of the assessee, therefore, the assessee is in appeal before the Tribunal wherein the other disallowance of Rs.29,94,64015/- made u/s 43B of the Act and of Rs.1,09,16,485/- u/s 36(1)(va) of the Act were challenged by the assessee.
Ground of appeal No.1 to 1.3 are in relation to the disallowance of Rs.29,94,64,015/- u/s 43B of the Act.
Heard both the parties and perused the materials available on record. It is seen that assessee has filed all the relevant details with respect to the date of payment of the deduction claimed u/s 43B along with documentary evidences before the Ld. CIT(A), however, the same were not considered by the Ld. CIT(A). The copies of the said documentary evidences are available in PB pages 192 to 232 filed by the assessee. The claim of the assessee is that the payments were made in accordance with law much before the due date of filing of the return of income and necessary evidences so filed requires verification on the part of the AO. In view of these facts, order of CIT(A) on this issue is set aside and this issue is remand to the file of the Assessing Officer with the direction to verify actual dates of payments made and decide the issue in accordance with law. The assessee is also directed to file all the necessary evidences regarding the claim of payment made within the stipulated period before the Assessing Officer as and when required. With these directions, ground of Appeal No.1 of the assessee is partly allowed for statistical purposes.
Natwest Digital Services India Private Limited Successor Entity to NWM Services India Private Limited vs. ACIT 6. Ground of appeal No.2 of the assessee is in relation to the disallowance u/s 36(1)(va) being delayed payment of Employee’s contributions to provident fund at Rs.1,09,16,485/-.
Heard both the parties and perused the materials available on record. Before us, claim of the assessee was that the amount of employees contribution was paid through challan which was deposited well within the stipulated time period and the funds were also debited from the bank account of the assessee on 12.10.2018 however, due to the technical glitches, the amount was credited to the account of EPFO on 17.101.2018 therefore, the receipt was issued by them on 17.10.2018. The AR of the assessee drew our attention to PB page 236 which is copy of the challan of gross amount paid towards PF contribution of Rs.2,63,89,905/- deposited with the Employees Provident Fund Organization on 11.11.2018. He further referred page 234 of PB which is copy of statement of assessee’s bank account wherein the said payment of Rs.2,63,89,905/- was debited on 12th October, 2018. On careful consideration of these facts and on perusal of the bank statement filed by the assessee, we find that assessee has successfully demonstrated that Rs.2,63,89,905/- pertaining to the payment of PF Contribution including Employees Contribution for the month of September, 2018 was deposited by the assessee on 11th October, 2018 and the said amount stood debited from the bank account of the assessee on 12.10.2018 and the due date for payment was 15.10.2018. Solely for reason that due to technical glitches with the bank the same was credited in the account of the recipient i.e. EPFO Bank Account on 17.10.2018, the assessee could not be held responsible. The assessee is not at fault as is evident from the receipts according to which it has deposited the contribution well within the stipulated time allowed under statute and such amount was also debited from the bank account of the assessee before the due date. Therefore, in our considered opinion, there is no fault on the part of the assessee as the realization of the said amount in the account of the recipient i.e. EPFO is beyond the control of the assessee. In view of these facts, we direct the AO to delete this disallowance made u/s 36(1)(va) of the Act. The grounds of appeal No.2 is allowed.
Ground of appeal No.3 is with regard to the levy of interest u/s 234B and 234C which are consequential in nature and AO is directed to charge the interest on the income finally computed after giving effect to the order of the Tribunal in the present appeal.
In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 10.09.2025.