SOLUTION MANPOWER & MEDIA PVT. LTD, MUMBAI V. DY CIT CPC, BENGALURU/ MUMBAI

ITA 2577/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9575 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Appeal Filed On: 29-09-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No. 2577/Mum/2021 (Assessment Year 2017-18) S o l u t i o n Ma n p o we r & Me d i a P vt . L t d . F - 2 0 1 , P r a n a y Na g a r , V a z ir Na k a , B o r i wa l i W es t , Mu m b a i- 4 0 0 0 9 2 Vs. The DCIT Central Processing Centre (CPC) Bengaluru-560100 (Appellant) (Respondent) PAN No. AARCS 9744 F Assessee by : Shri Mehul Shah, AR Revenue by : Shri Hoshang B. Irani-DR Date of hearing: 01.06.2022 Date of pronouncement : 07.07.2022 O R D E R PER PRASHANT MAHARISHI, AM: 01. This appeal is filed by the assessee/ appellant against the order passed by the National Faceless Appeal Centre (NFAC) Delhi, [ The Ld CIT (A) ] for A.Y. 2017-18 on 20 th July, 2021, wherein the appeal filed by the assessee against the order passed under Section 143(1) of the Income-tax Act, 1961 (The Act) dated 29 th March, 2019 issued by the Assistant Director of Income Tax, CPC, (The Learned Assessing Officer), wherein disallowance made towards deposit of Provident Fund and ESIC beyond due dates prescribed under the respective tax laws but before the due date of filing of return of income was disallowed by the learned Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals). Page | 2 ITA No. 2577/Mum/2021 Solution Manpower & Media Pvt. Ltd.; A.Y. 17-18 02. Assessee has preferred the following grounds of appeal:- “On the facts and circumstances of the case as well as law on the subject, the learned CIT (A) has erred in confirming the action of Assessing Officer (Central Processing Centre, Bengaluru) in making adjustment u/s 143(1) although the same adjustment does not fall within the ambit of section 143(1) (a)(i) to 143(1)(a)(vi). 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer(CPC) in making addition of Rs.11,70,897/- on account of disallowance of employees contribution to P.F. & ESIC us.36(1)/va) of the Act. 3. Without prejudice to the above ground, the Ld. CIT(A) ought to have considered the tact that out of Rs.11,70,897/- the employees' contribution is only Rs.3,20,196/-and the remaining amount Rs. 8,50,701/- pertains to employer's which is liable to be allowed u/s 43B. 4. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing the appellate order without providing any opportunity of being heard. The only notice of the hearing issued fixed the date of hearing on 20.07.2021 and when the assessee tried to file his submission on 20.07.2021, the assessee discovered that the appellate order was already passed on 20.07.2021. 5. It is therefore prayed that addition made by the assessing officer and confirmed by CIT(A) may please be deleted.” Page | 3 ITA No. 2577/Mum/2021 Solution Manpower & Media Pvt. Ltd.; A.Y. 17-18 03. Brief facts of the case shows that assessee is a company, who filed its return of income on 25 th October, 2017, declared total income of ₹41,99,330/-. This income was assessed under Section 143(1) of the Act by the learned Assessing Officer as per order dated 29 th March, 2019, at ₹53,70,230/-. The only difference being the business income shown by the assessee at ₹41,99,328/- was determined at ₹53,70,226/-. Only adjustment is ₹11,70,897/- with respect to the Provident Fund and ESIC payments made before the due date of filing of the return but not before the due date prescribed under the respective PF / ESIC laws. 04. The assessee preferred an appeal before the NFAC, where the appeal of the assessee was dismissed. 05. We have heard the rival contentions perused the orders of the lower authorities. We find that out of the sum of ₹11,70,897/-, employees contribution to the Provident Fund is only ₹3,20,196/- and employers’ contribution is ₹8,50,701/-. The claim of the assessee is that the above adjustment does not fall within the ambit of Section 143(1)(a) of the Act. It is also contested that the NFAC did not provide any opportunity of hearing to the assessee. 06. The learned Departmental Representative reiterated the orders of NFAC. 07. The facts are not in dispute that assessee has deposited the Provident Fund dues before the due date of filing of the return of income. If the employers’ contribution of ₹8,50,701/- has been paid before the due date of filing of the return, there would not have been any reason for making the above disallowance. Further, with respect to the employees contribution of ₹3,20,196/- disallowed under Section 143(1) of the Act, we find that issue is squarely covered in favour of the assessee by the decision of co-ordinate Bench in case of Kalpesh Syntehtics Private Limited V DCI wherein it has been held that no such adjustment could have been made in the hands of the assessee. Accordingly, the disallowance could not have been made. Page | 4 ITA No. 2577/Mum/2021 Solution Manpower & Media Pvt. Ltd.; A.Y. 17-18 As the issue is squarely covered in favour of the assessee by the decision of the co-ordinate Bench, respectfully following the same, we direct the learned lower authorities to delete the disallowance of late payment of employees contribution of Provident Fund of ₹3,20,196/- and ₹8,50,701/- being employers contribution which are deposited before the due date of filing of the return of income. In the result, ground no. 3 of the appeal of the assessee is allowed. 08. In view of our decision in ground no. 3, all other grounds become infructuous and hence dismissed. Accordingly, appeal of the assessee is partly allowed. Order pronounced in the open court on 07.07.2022. Sd/- Sd/- (KAVITHA RAJAGOPAL) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 07.07.2022 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai