WANBURY LIMITED, MUMBAI V. ASSISTANT DIRECTOR OF INCOME TAX, CENTRAL PROCESSING CENTRE , BENGALURU

ITA 109/MUM/2023

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Wanbury Limited appealed against the order of the Commissioner of Income Tax (Appeals)/NFAC, which upheld the CPC's disallowance of Rs. 3,29,22,239 for late deposit of Employees' Contributions to ESIC and PF for the assessment year 2019-20. The CPC had initially processed the assessee's return and issued an intimation under section 143(1) of the Act, recalculating the assessee's loss from Rs. 11,13,89,199 to Rs. 7,84,66,819. The main legal contention revolved around the correct application of section 143(1)(A)(ii) versus section 143(1)(A)(vi) of the Act in the context of the disallowance. The Tribunal dismissed the appeal, citing precedents that support the disallowance under section 36(1)(va) for late deposits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299326 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 14-03-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 12-01-2023
• Other Referred Cases: M/s. Checkmate Services Pvt. Ltd. Vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM AND SHRI AMARJIT SINGH, AM आयकरअपीलसं/ I.T.A. No. 109/Mum/2023 (निर्धारणवर्ा /Assessment Year: 2019-20) Wanbury Limited 10 th Floor, Section 30- A BSEL Tech Park, B wing, Opp. Vashi Railway Station, Vashi Mumbai 400705 बिधम / Vs. ADIT, CPC 1 st Floor, Prestige Alpha No 48/1 48/2, BeratenaagrahareaBegur, Hosur Rd, UttarahalliHobli, Bengaluru 560100 स्थायीलेखासं/.जीआइआरसं/.PAN/GIR No. : AABCP5939P (अपीलाथी /Appellant) .. (प्रत्यथी /Respondent) सुनवाईकीतारीख /Date of Hearing: 15/03/2023 घोषणाकीतारीख /Date of Pronouncement: 26/04/2023 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assesseecompany against the order of the Commissioner of Income Tax (Appeals)/NFAC dated 16.11.2020 for AY 2019-20. 2. The main grievance to the assessee is against the action of the CPC making adjustment/disallowance u/s 36(1)(va) of the Income Tax Act, 1961[hereinafter the Act] to the tune of Rs. 3,29,22,239/-on account of late Assessee by: Shri Madhur Agarwal Revenue by: Shri Krishna Kumar deposit of Employees’ Contribution to ESIC and PF, while passing intimation u/s 143(1) of the Act. 3. Brief facts are that assessee company for AY 2009-10 filed return on 31-10-2019 declaring total loss of Rs. 11,13,89,199/-. Subsequently, the assessee’s return of income was processed by CPC; and assessee received intimation u/s 143(1) of the Act dated 27.03.2022, wherein CPC disallowed u/s 36(1)(va) of the Act, Rs. 3,29,22,239/-on account of late deposit of Employees’ Contribution to ESIC and PF and thus loss of the assessee company was re-computed at Rs. 7,84,66,819/-. Being aggrieved, assessee preferred appeal before Ld. CIT(A) and raised grounds/issue regarding disallowance of Rs. 3,29,22,389/- u/s 36(1)(va) of the Act which was dismissed. Aggrieved by the action of Ld. CIT(A)/NFAC, the assessee is before us. 4. The main grievance, of the assessee is that from a perusal of page no 7 of the impugned intimation order it can be seen that an amount of Rs 3,29,22,389/- was disallowed u/s 36(1) (va) of the Act u/s 143(1)(A)(vi) of the Act which action of the CPC was wrong because it could have been done by the CPC only u/s143(1)(A)(ii) of the Act. Therefore, the adjustmentmade by CPC is per-se wrong. 5. However, we do not agree with the aforesaid contention of the Ld. AR of the assessee because it is well settled that mention or application of a wrong provision of law to a given facts of case itself does not make the authority incompetent to deal with the factual situation unless there is no provision, which can take care of the jurisdictional fact [Refer Hazari Md 41 ITR 12 Supreme Court] 6.. Further we note that the Hon’ble Supreme Court in the case of M/s. Checkmate Services Pvt. Ltd. Vs. CIT in Civil Appeal No. 2833 of 2016 dated 12.10.2022 has held that the late deposit of Employees’ Contribution in respect of PF/ESIC as prescribed under the respective Acts (PF/ESIC) would attract disallowance u/s 36(1)(va) of the Act; and therefore, we are inclined to dismiss the appeal of the assessee. And the CPC/AO was empowered to disallow the deduction claimed by assessee regarding Employee’s Contribution u/s 143(1)(A)(ii) of the Act, if the remittance was made in the relevant funds after the due-date prescribed under the PF/ESIC Act. 7. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on this 26/04/2023. Sd/- Sd/- (AMARJIT SINGH) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; दिनांकDated : 26/04/2023. Aniket Rajput आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकरआयुक्त / CIT 4. दवभागीयप्रदतदनदि ,आयकरअपीलीयअदिकरण ,मुंबई / DR, ITAT, Mumbai 5. गार्डफाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपतप्रदत //True Copy// उि/सहधयकिंजीकधर /(Dy./Asstt.Registrar) आयकरअिीिीयअनर्करण ,मुंबई / ITAT, Mumbai