ELCON (INDIA),NEW DELHI vs. ITO, WARD-29(1), DELHI

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ITA 306/DEL/2023Status: DisposedITAT Delhi31 March 2023AY 2020-213 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowed amount was employer's contribution to PF and ESI, which was paid before the due date of filing the return. The Commissioner (Appeals) erred by sustaining the addition without considering the rectification.

What were the facts?

The assessee's return was processed by CPC, which disallowed Rs. 3,77,812 under Section 43B, mistakenly believing it was employee PF/ESI not paid on time. A rectification order later deleted this adjustment.

What were the issues?

Whether the disallowance under Section 43B was justified when the amount was paid before the due date and subsequently rectified. Whether the Commissioner (Appeals) correctly adjudicated the appeal despite a rectification order deleting the addition.

Which sections of the Income-tax Act were involved?

Section 43B,Section 143(1),Section 154,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI

Before: SHRI SAKTIJIT DEY

Hearing: 20.03.2023Pronounced: 31.03.2023

ORDER This is an appeal by the assessee against order dated 14.12.2022 passed by National Faceless Appeal Centre (NFAC) pertaining to assessment year 2020-21.

2.

The dispute in the present appeal is with regard to disallowance/addition of Rs.3,77,812 under section 43B of the Income-tax Act, 1961.

3. Briefly the facts are, while processing the return of income filed by the assessee, the Centralized Processing Centre (CPC) disallowed an amount of Rs.3,77,812/- under section 43B of the Act under a misconception that the amount was not paid before the due date. After receiving the intimation received under section 143(1) of the Act, the assessee filed an application for rectification under section 154 of the act. Simultaneously, challenging the intimation under section 143(1) of the Act, the assessee filed an appeal before learned Commissioner (Appeals). On 14.02.2022, the CPC passed a rectification order deleting the adjustment of Rs.3,77,812/-. However, this fact could not be brought to the notice of the first appellate authority in course of appellate proceeding. Therefore, while disposing of assessee’s appeal, learned Commissioner (Appeals) sustained the adjustment/addition made under section 43B by holding that employees contribution to PF/ESI was not paid before the due date.

3.

Having considered rival submissions, I find that the first appellate authority has completely misconceived the facts while sustaining the adjustment. From the facts on record, it is clearly evident that the amount in dispute does not represent employees’ contribution to PF/ESI. Rather, the amount includes employer’s contribution to PF and ESI. Undisputedly, the amount was paid 2 | P a g e before the due date of filing of return of income under section 139(1) of the Act. Having verified the aforesaid factual position, the CPC deleted the adjustment in the rectification order passed under section 154 of the Act.

4.

In view of the aforesaid, I reverse the impugned order of learned Commissioner (Appeals) qua the addition of Rs.3,77,812 and delete the addition. Grounds are allowed.

5.

In the result, appeal is allowed.

Order pronounced in the open court on 31st March, 2023

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