IPF VIKRAM INDIA PRIVATE LIMITED,CHANDIGARH V. DY. COMMISSIONER OF INCOME TAX, CIRCLE, PANCHKULA, PANCHKULA

ITA 1204/CHANDI/2024

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The case involves IPF Vikram India Private Limited, which appealed against the order of the Ld. CIT(A)/NFAC, Delhi, pertaining to the Assessment Year 2014-15. The primary contention was regarding the reopening of the assessment by issuance of notice under section 148 of the Income Tax Act, which the assessee argued was based on an audit objection without any actual escapement of income. The Tribunal found that the reopening was upheld on incorrect premises and that the factual examination regarding the employees' contribution to PF/ESI was incomplete. Consequently, the Tribunal decided to set aside the order and remand the matter back to the Assessing Officer for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 824509 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 12-12-2024
• Other Referred Cases: Checkmate Services Pvt. Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: TEJMOHAN SINGH
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Audit objection; Reason to believe
• Section: 147; 148; 143(3); 142(1); 271(1)(c)

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी क ृणवȶ सहाय, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No. 1204/Chd/ 2024 िनधाŊरण वषŊ / Assessment Year : 2014-15 IPF Vikram India Private Limited C/o Tejmohan Singh, Advocate # 527, Sector 10D, Chandigarh- 160011 बनाम The Dy. CIT, Panchkula ˕ायी लेखा सं./PAN NO: AAACI3719F अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Tejmohan Singh, Advocate राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 18/12/2025 उदघोषणा की तारीख/Date of Pronouncement : 30.12.2025 आदेश/Order PER KRINWANT SAHAY, A.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 26/08/2024 pertaining to Assessment Year 2014-15. 2. At the outset, the Registry has pointed out that the present appeal is barred by limitation by 42 days, for which, the Ld. Counsel for the assessee filed a condonation application along with an affidavit seeking condonation of the said delay. 3. The Ld. DR strongly opposed the condonation of delay. 4. We have considered the condonation application filed by the assessee and the submissions made by both the parties. The assessee has explained that the delay occurred due to bona fide reasons and was neither intentional nor deliberate. 4.1 After considering the facts and circumstances of the case, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed period and that there is no material on record to indicate any mala fide intention or negligence on the part of the assessee. Accordingly, in the interest of justice, the delay of 42 days in filing the appeal is condoned and the appeal is admitted for adjudication on merits. Printed from counselvise.com 2 5. In the present appeal Assessee has raised the following grounds: 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in upholding the reopening the assessment by issuance of notice u/s 148 of the Act in as much as there has been no escapement of income and as such the order passed is illegal, arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax(Appeals) has erred in law as well as on facts in as much in upholding of the assessment in as much as there has been no reason to believe that there was an escapement of income which is based only on an audit objection and as such the order passed is illegal, arbitrary and unjustified. 3. That the Ld. Commissioner of Income tax(Appeals) has erred in law as well as on facts in holding that no regular assessment was framed which is contrary to the facts in as much as regular assessment was framed u/s 143(3) on 29.09.2016 and as such upholding of reopening on wrong facts is illegal, arbitrary and unjustified. 4. Without prejudice to the above, the Ld. Commissioner of Income Tax(Appeals) has erred in directing the assessing officer to verify the payment of Rs.18,63,488/- with the due dates of the Employees contribution on the basis of decision of the Apex Court rendered in the case of Checkmate Services Private Limited which in fact were statutory liabilities as explained time and again but not appreciated in the light of evidence placed on record by the Assessing Officer and Commissioner of Income Tax (A) which renders the addition made to be arbitrary and unjustified. 5. That the Ld. Commissioner of Income Tax(Appeals) has without considering the replies and evidence set aside the matter for verification of due dates which is not the issue at hand and as such the directions of the Commissioner of Income Tax(A) are misplaced. 6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 7. That the order of the Ld. Commissioner of Income Tax(Appeals) Officer is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable. 6. Briefly, the facts of the case are that the assessee, IPF Vikram India Private Limited, filed its original return of income for Assessment Year 2014-15 on 27/09/2014, declaring a total income of Rs. 6,08,79,760/-. The regular assessment under section 143(3) of the Income-tax Act, 1961, was initially completed on 29/09/2016, at the returned income. Subsequently, the Assessing Officer (AO) observed from the records that the assessee had created a provision of Rs. 18,63,488/- on account of employee benefits which was not added back to the taxable income. Believing this amount had escaped assessment, the AO issued a notice under section 148 on 30/03/2021. In response, the assessee filed a return on 27/04/2021, declaring a revised total income of Rs. 6,09,83,270/-. During the reassessment proceedings, statutory notices under sections 143(2) and 142(1) were issued, and a draft assessment order with a show-cause notice was served on 23/03/2022. The assessee submitted replies on 01/01/2022, 04/03/2022 and 26/03/2022, providing details of employee contribution entries, due dates, and payment challans. Printed from counselvise.com 3 7. The AO rejected the assessee’s contentions and the documentation provided regarding the deposit of employee contributions. The AO noted that while the auditor had furnished specific details in Column No. 20(b) of the audit report regarding contributions received from employees under section 36(1)(va), the assessee failed to submit a complete list of all entries. Upon verification, the AO found that the dates on the submitted challans did not match the corresponding serial numbers or due dates in the list provided by the assessee. Consequently, the AO concluded that it was not clear whether the deposits were made on or before the statutory due dates and characterized the assessee's submission as an attempt to mislead the proceedings. Relying on the auditor's report as the more authentic record, the AO held that the provision of Rs. 18,63,488/- for employee benefits was omitted from the taxable income and must be added back under section 36(1)(va). The total income was reassessed at Rs. 6,27,43,248/-, interest was charged under sections 234A, 234B, 234C, and 234D, and penalty proceedings under section 271(1)(c) were initiated for concealment of income. 8. Against the order of the AO the assessee went in appeal before the Ld. CIT(A). The Ld. CIT(A), after considering the submissions of the assessee and the material on record, upheld the validity of reopening under section 147 by observing that the notice under section 148 was issued on the basis of audit information and that no earlier assessment had been completed for the relevant year. Accordingly, the challenge to reopening was rejected. Against the order of the Ld. CIT(A), this appeal has been filed before the Tribunal. During proceedings before us, submissions were made by both partners. 9. On merits, the Ld. CIT(A) held that employees’ contribution to PF/ESI is governed by sections 2(24)(x) and 36(1)(va) of the Act and is allowable only if deposited within the due dates prescribed under the respective welfare statutes. Relying on the decision of the Hon’ble Supreme Court in Checkmate Services Pvt. Ltd., it was held that payment made after the statutory due date is not deductible, even if paid before the filing of return. However, the Assessing Officer was directed to verify the due dates and dates of deposit and allow deduction wherever the payments were made within the prescribed due dates. Consequently, the appeal was partly allowed. Printed from counselvise.com 4 9.1 We have considered the rival submissions, perused the orders of the lower authorities and the material on record. We note that the assessee was subjected to a regular assessment under section 143(3) on 29.09.2016, whereas the Ld. CIT(A) upheld the reopening on the incccorrect premise that no regular assessment had been framed. Further, the reassessment has been initiated on the basis of audit information and the issue relating to employees’ contribution to PF/ESI involves verification of due dates and actual dates of payment, which has not been conclusively examined. 10 On merits also, though the Ld. CIT(A) relied on the decision of the Hon’ble Supreme Court in Checkmate Services Pvt. Ltd., the matter has been restored for verification of facts, indicating that proper factual examination is still required. In these circumstances, we deem it appropriate, in the interest of justice, to set aside the impugned order and restore the matter to the file of the Assessing Officer for de novo adjudication in accordance with law after affording due opportunity of being heard to the assessee. Accordingly, the appeal of the assessee is allowed for statistical purposes. 11. In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 30.12.2025. Sd/- Sd/- लिलत क ुमार क ृणवȶ सहाय (LALIET KUMAR) (KRINWANT SAHAY) Ɋाियक सद˟ /JUDICIAL MEMBER लेखा सद˟/ ACCOUNTANT MEMBER AG/rkk आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "