INDO-MIM LIMITED,HYDERABAD V. DCIT., CIRCLE-2(1), HYDERABAD

ITA 587/HYD/2025

AI Insights

The case involves INDO-MIM Ltd, which appealed against the order of the CIT (A)-NFAC Delhi, concerning the assessment year 2020-21. The primary issue was the addition of Rs.4,41,99,512 made by the Assessing Officer for belated payments towards PF & ESI, which were made before the due date of filing the return of income under section 139(1) of the I.T. Act, 1961. The Tribunal had previously set aside a similar issue for the assessment years 2019-20 and 2020-21, directing proper verification and adjudication in accordance with the law. The Department of Revenue argued that the issue was covered by the Supreme Court's judgment in Checkmate Services (P) Ltd vs. CIT. However, the Tribunal found that the Assessing Officer had not independently examined the relevant facts and law, leading to the decision to remand the matter back for further verification and proper adjudication.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705624 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: Checkmate Services (P) Ltd vs. CIT
• Laws Referred To: I.T. Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Set aside
• Section: 143(3)

Judgement Text

" ITA No 587 of 2025 INDO MIM Ltd Page 1 of 6 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB-B ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.587/Hyd/2025 (िनधाŊरण वषŊ/Assessment Year: 2020-21) M/s. INDO-MIM Ltd Hyderabad PAN:AABCI0484L Vs. Dy.CIT Circle 2(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri P Murali Mohan Rao, CA राज̾ व Ȫारा/Revenue by:: Dr. Sachin Kumar, DR सुनवाई की तारीख/Date of hearing: 25/06/2025 घोषणा की तारीख/Pronouncement: 30/06/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President This appeal filed by the assessee is directed against the order dated, 3/3/2025 of the learned CIT (A)-NFAC Delhi, for the A.Y.2020-21. 2. The assessee has raised the following grounds of appeal: ITA No 587 of 2025 INDO MIM Ltd Page 2 of 6 3. The solitary issue arises in this appeal of the assessee is whether the learned CIT (A) is justified in upholding the ITA No 587 of 2025 INDO MIM Ltd Page 3 of 6 addition of Rs.4,41,99,512/- made by the Assessing Officer on account of belated payments towards PF & ESI but before the due date of filing the return of income u/s 139(1) of the I.T. Act, 1961. 4. The learned AR of the assessee has submitted that this addition was initially made by the CPC u/s 143(1) of the Act dated 20/12/2021 which was challenged by the assessee before the learned CIT (A) and thereafter before this Tribunal. The learned AR has pointed out that this Tribunal vide order dated 26/08/2024 in ITA Nos. 595 & 596/Hyd/2024 for the A.Ys 2019- 20 and 2020-21 has set aside this issue to the record of the Assessing Officer for proper verification of the relevant facts and then adjudication in accordance with the law. He has filed a copy of the order of the Tribunal dated 26/08/2024 arising from the intimation u/s 143(1) of the Act. Thus, the learned AR has submitted that in view of the earlier decision of this Tribunal, this matter is required to be remanded to the record of the Assessing Officer. 5. On the other hand, the learned DR has submitted that the issue involved in the appeal of the assessee is squarely covered by the judgment of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT reported in (2022) 448 ITR 518. Thus, he has relied upon the impugned order of the learned CIT (A). 6. We have considered the rival contentions as well as the relevant material available on record. The Assessing Officer while ITA No 587 of 2025 INDO MIM Ltd Page 4 of 6 framing the assessment u/s 143(3) has made an addition as the income computed by the CPC u/s 143(1)(a) of the Act. Thus, it is clear from the assessment order that the Assessing Officer has not given any decision on this issue by examining the relevant facts and law independently of the adjustments made by the CPC u/s 143(1) of the Act. The adjustment made by the CPC u/s 143(1) was challenged by the assessee in a separate appeal and the matter was carried to this Tribunal. This Tribunal while deciding the appeals of the assessee for the A.Ys 2019-20 and 2020-21 in ITA Nos. 595 & 596/Hyd/2024 vide composite order dated 26/08/2024 has held in para 7 & 8 as under: “7. We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. The Assessing Officer/CPC, while processing return of income of the appellant for both the A.Ys has made adjustment towards contribution to various welfare funds, including ESI/Gratuity and other welfare funds on the ground that the assessee has failed to deposit contribution to the said funds on or before the due date prescribed under the relevant acts. The learned CIT (A) sustained the addition made by the Assessing Officer by following the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT (Supra). It is the argument of the learned Counsel for the assessee that in respect of contribution to ESI, the appellant has contributed the amount on or before the due date prescribed under the Act, except for one month where the contribution has been paid one day later because the previous day was general holiday on account of Independence Day. In respect of contribution to Gratuity and other welfare funds, the said contributions does not cover under the ESI & PF and further said contributions are even paid on or before the due date of furnishing of the return of income. The appellant has furnished the relevant details along with the return of income. The Assessing Officer without considering the relevant dates simply disallowed contribution to various funds. 8. We find that, in so far as the contribution to ESI, it is not ascertainable from the assessment order or from the order of the learned CIT (A), whether it is pertains to employees contribution or employers contribution. In case, the amount paid by the assessee pertains to employees contribution, then ITA No 587 of 2025 INDO MIM Ltd Page 5 of 6 it is covered against the assessee by the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT (Supra). In case, the contribution pertains to employer contribution, then the date of payment needs to be verified with reference to the date of furnishing of return of income. In case of contribution to Gratuity and other welfare funds, those contributions needs to be verified with reference to the due date for furnishing of return of income, because contribution of above two funds is not covered by the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT. The facts are not clear and needs further verification from the Assessing Officer. Therefore, we are of the considered view, the issue needs to go back to the file of the Assessing Officer for further verification. Thus, we set aside the order passed for both the A.Ys and restore the issue back to the file of the Assessing Officer. The Assessing Officer is directed to verify the contributions in light of our discussion given herein above and also in light of the decision of Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd and decide the issue in accordance with law. “ 7. Thus, this adjustment made by the CPC u/s 143(1) which was also added to the total income of the assessee by the Assessing Officer u/s 143(3) has already been set aside by this Tribunal and remanded back to the file of the Assessing Officer for proper verification and examination of the relevant facts and then adjudication of the same in accordance with the law. Once the Tribunal has already set aside this issue and remanded the matter to the record of the Assessing Officer, then the addition made by the CPC u/s 143(1) of the Act was no more in existence and consequently, the addition made by the Assessing Officer while framing the scrutiny assessment u/s 143(3) shall also have no legs to stand. Since the assessment order was passed prior to the order of this Tribunal remanding the matter back to the record of the Assessing Officer, therefore, in the facts and circumstances of the case and in view of the earlier decision of this Tribunal dated 26/08/2024, the matter is remanded to the ITA No 587 of 2025 INDO MIM Ltd Page 6 of 6 record of the Assessing Officer to give effect to the earlier directions of this Tribunal dated 26/08/2024. 8. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 30th June, 2025. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 30th June, 2025 Vinodan/sps Copy to: S.No Addresses 1 INDO MIM Ltd c/o P Murali & Co. CAs, 6-3-655/2/3 Somajiguda, Hyderabad 500082 2 Dy.CIT circle 2(1) Hyderabad 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "