Aztec Shiva Handicrafts & Arts Pvt. Ltd., JODHPUR V. ACIT, JODHPUR

ITA 161/JODH/2022

AI Insights

The case involves Aztec Shiva Handicrafts & Arts Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre (NFAC), CIT(A) for the assessment year 2015-16. The primary contention was regarding the disallowance of Rs. 3,54,886/- made under section 154 of the Income Tax Act, concerning the employee's contribution to PF/ESI which was not paid within the prescribed due dates. The assessee argued that the issue was debatable and thus not applicable under section 154, which led to the appeal. The Tribunal considered the legal grounds raised and decided to restore the matter to the AO for a detailed examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122714 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-01-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 24-11-2022
• Other Referred Cases: Checkmate Services P. Limited Vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure; Set aside
• Section: 154; 143(3); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND Dr. S. SEETHALAKSHMI, JUDICIAL MEMBER ITA Nos. 161/Jodh/2022 (ASSESSMENT YEARS- 2015-16) Aztec Shiva Handicrafts & Arts Pvt. Ltd. E-589-595 Epip Ind. Area, Boranada, Jodhpur-342021. Vs ACIT, Circle-3 Jodhpur. (Appellant) (Respondent) PAN NO. AACCA 3071 E Assessee By Shri T.L. Jain-C.A. Revenue By Ms. Nidhi Nair, JCIT-DR Date of hearing 20/01/2023 Date of Pronouncement 13/03/2023 O R D E R PER: Dr. S. Seethalakshmi, JM This is an appeal filed by the assessee aggrieved from the order of the National Faceless Appeal Centre, Delhi (herein after referred as “ NFAC” ), Ld. CIT(A) for the assessment years 2015-16 dated 31.10.2022. 2. The assessee has raised the following grounds:- “01. That the order passed by Ld. AO u/s 154 on 29.04.2021 and the order passed by Ld. CIT(A) u/s 250 on 31.10.2022 are bad in law and bad on facts. 2 ITA Nos. 161/Jodh/2022 Aztec Shiva Handicrafts and Arts Pvt. Ltd. 02. On the facts and in the circumstances, the Ld. AO has grossly erred in making an addition of Rs 3.54.886/- by invoking section 154 as the section 154 is not applicable to a debatable issue and the deduction of employees contribution to PF/ESI paid after due date under respective laws is a debatable issue and therefore the order passed by Ld. AO is violative of section 154 and and the Ld CIT(A) has grossly erred in upholding such illegal action of Ld. AO. 03. On the facts and circumstances and in the law, the Ld. AO was not justified in making an addition of Rs. 3,54,886/- without considering the response dated 26.03.2021 submitted by the appellant and therefore the action of Ld. AO is illegal being violative of section 154 and hence the Ld. CIT(A) is not justified in upholding such illegal action of Ld. AO. 04. Without prejudice to the above, even if the employees contribution to PF/ESI is not allowable u/s 36(1)(va) then the same is allowable u/s 37(1) as business expenditure. 05. That the appellant reserves the right to add, alter, vary, substitute or amend any or all of the grounds of appeal at or before the time of hearing. 06. That the appellant prays for justice and relief.” 3. Briefly the facts of the case are that the assessee filed its return of income on 29.09.2015 declaring total income of Rs. 98,53,860/- which was processed U/s 143(3) of the Income Tax Act it made disallowance of Rs. 3,54,886/- towards employee’s contribution towards ESI and PF. On appeal, the ld. CIT(A), NFAC has confirmed the disallowance made U/s 143(3) on 3 ITA Nos. 161/Jodh/2022 Aztec Shiva Handicrafts and Arts Pvt. Ltd. account of assessee’s failure to pay the employee’s contribution of PF/ESI within the prescribed due dates as per Section 36(1)(va) of the Act. 4. Now the assessee is in appeal. 5. The ld. Sr. DR relied upon the orders of the lower authorities and contended that the lower authorities has passed the order on merit and Ld DR strongly placing reliance on the recent decision of the Hon’ble Supreme Court in the case of Checkmate Services P. Limited Vs. CIT in Civil Appeal No. 2833 of 2016 dated 12.10.2022, the impugned order disallowances to be dismissed. 6. We have considered the submission and perused the materials available on record. We note that the assessee seeks to raise certain legal grounds. Hence, we are of the view that all issues may be restored to the file of the AO for examine the issues that may be urged by him. Accordingly, we set aside the order of the ld. CIT(A) and restore all issues to the file of the AO for verification and fresh hearing by providing adequate opportunity to the assessee. Thus the appeal of the assessee is allowed for statistical purposes as per direction mentioned above. 4 ITA Nos. 161/Jodh/2022 Aztec Shiva Handicrafts and Arts Pvt. Ltd. In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced on 13/03/2023. Sd/- Sd/- (B. R. BASKARAN) (Dr. S. SEETHALAKSHMI) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated :13 /03/2023 *S antosh Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR 6. Guard File Assistant Registrar Jodhpur Bench