M/s. Indus TMT Industries Limited, Bengaluru V. Assistant Director of Income Tax, CPC, Bengaluru

ITA 1159/BANG/2022

AI Insights

M/s. Indus TMT Industries Limited appealed against the order of the CIT(A) which confirmed the disallowance of Rs.23,67,025, the total amount contributed towards ESI and PF by the employees, irrespective of the payment delays. The assessee argued that the payments were made before the filing of the income tax return, albeit some were delayed. The Tribunal found merit in the assessee's argument that the payments made within the due date of filing the return should be allowable and remanded the matter back to the CIT(A) for detailed verification of the payment challans submitted.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129241 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-03-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 21-12-2022
• Other Referred Cases: CHECKMATE SERVICES PVT LTD VS CIT-1 in CIVIL APPEAL 2833/2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(1); 153

Judgement Text

ITA No.1159/Bang/2022 M/s. Indus TMT Industries Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No.1159/Bang/2022 Assessment Year: 2020-21 Indus TMT Industries Limited #164/1, 1 st Floor, Jayanagar Sakama Garden Kanakpura Main Road Basavanagudi Bangalore 560 004 PAN NO : AACCC5973B Vs. ACIT CPC Bangalore APPELLANT RESPONDENT Appellant by : Shri H. Ganpatlal Kawad, A.R. Respondent by : Shri Gudimella VP Pavan Kumar, D.R. Date of Hearing : 08.03.2023 Date of Pronouncement : 21.03.2023 O R D E R PER BEENA PILLAI, JUDICIAL MEMBER: Present appeal is filed by assessee against order dated 4.11.2022 passed by NFAC for assessment year 2020-21 on following grounds of appeal: “1. The learned Assessing Officer had erred in passing the intimation in the manner passed by him and the learned CIT(A) National Faceless Appeal Centre has erred in confirming the same. The impugned order as confirmed being bad in law is required to be quashed. 2.1 In any case the learned Assessing Officer had erred in disallowing the entire amount of employees share of ESI/PF including late payment of PF/ESI beyond the due dates prescribed in respective acts but within the due date of filling of ROI. The disallowance being ITA No.1159/Bang/2022 M/s. Indus TMT Industries Limited, Bangalore Page 2 of 4 against the law, the additions made by AO was bad in law and CIT(A) National Faceless Appeal Centre has erred in confirming the same. 2.2 The lower authorities have not properly appreciated the facts of the case and law applicable. On proper appreciation of facts and applicable law it will be clear that the payments made with in due date is allowable. 3. In view of the above and on other grounds to be adduced at the time of hearing, it is requested that the impugned order as confirmed by CIT(A) National Faceless Appeal Centre be quashed or at least the payment made on time as per the late payment of PF/ESI has to be allowed.” 2. Brief facts of the case are as under:- 2.1 The assessee is a company and had filed its original return of income for the year under consideration on 22.2.2021 declaring total income of Rs.28,18,89,620/-. The assessee received communication of proposed adjustment u/s 133(1A) of the Act on 22.9.2021 wherein there was a disallowance of Rs.23,67,025/- being contribution to ESI & PF. 2.2 The assessee submitted a response disagreeing to the proposal for adjustment. Assessee submitted that only few months were paid after due date but before the filing of IT return. Thereafter, the assessee received the intimation, which was passed on 24.12.2021 adding the entire amount of Rs.23,67,025/- irrespective of whether there was a delay or not in the payment. 2.3 Aggrieved by the order of the ld. AO, the assessee filed appeal before the ld. CIT(A). 2.4 The assessee submitted that it had received from employees a sum of Rs.21,35,700/- towards their contribution to PF and Rs.2,31,325/- towards their contribution to ESI. The assessee submitted that sum of Rs.26,182/- towards ESI & PF and Rs.5,49,399/- towards PF was remitted after the due date prescribed under the respective Act. The Ld. AR referring the page 128 to 129 of paper book submitted that the payment challan for financial year 2019-20 in respect of ESI & PF were filed before the ld. CIT(A). ITA No.1159/Bang/2022 M/s. Indus TMT Industries Limited, Bangalore Page 3 of 4 2.5 It was submitted that in the tax audit report at page 79, the said amount was not reflected due to some technical mistake which the assessee could not explain. However, the ld. CIT(A) upheld the disallowance made by the order passed u/s 143(1) of the Act. Aggrieved by the order of the ld. CIT(A) assessee is in appeal before this Tribunal. 2.6 It is submitted that the assessee had belatedly paid only a sum of Rs.5,75,851/- being the employee contribution towards PF & ESI beyond the statutory due dates. It was unjustified if the entire contribution to be disallowed without being verified and by merely going by the details filed that appeared in the tax audit report. He submitted that all the challans in respect of payment made towards the contribution of employees under ESI & PF have been filed before the ld. CIT(A) which has not been verified. In the interest of justice he prayed for the appeal to be remanded for necessary verification. 3. The ld. D.R. though supported the orders passed by authorities below could not controvert the challans that has been placed at pages 128 to 153 of the paper book. 4. We have perused the submissions advanced by both sides. The challans that is related by the ld. A.R. pertaining to the payments made towards ESI & PF has been filed before the ld. CIT(A). Admittedly, the ld. A.R. submitted that some payments have been belatedly filed. Further, due to certain technical mistake, the tax audit report do not reflect the payment made by the assessee under Annexure 20B, towards the contribution received from employees. In the interest of justice, we think it is fit and appropriate to remand the issue to the ld. CIT(A) for necessary verification. The ld. CIT(A) shall verify each and every payment made by the assessee vis-a-vis the challans placed. We direct that the disallowance as per the directions of Hon’ble Supreme Court in the case of CHECKMATE SERVICES PVT LTD VS CIT-1 in CIVIL APPEAL 2833/2016 vide its judgment dated 12 ITA No.1159/Bang/2022 M/s. Indus TMT Industries Limited, Bangalore Page 4 of 4 October 2022 should be made only in respect of those contributions that was filed belatedly and, the payments made within the statutory period should be allowed in the hands of the assessee. With the above directions, we allow the grounds filed by the assessee for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 21 st Mar, 2023 Sd/- (Chandra Poojari) Accountant Member Sd/- (Beena Pillai) Judicial Member Bangalore, Dated 21 st Mar, 2023. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(Judicial) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.