B.E.BILLIMORIA & COMPANY LIMITED, MUMBAI V. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), MUMBAI

ITA 2788/MUM/2022

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B.E. Billimoria & Company Ltd. appealed against the order of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, which confirmed disallowances made by the Assessing Officer for the assessment year 2017-18. The disallowances included \\u20b9;1,26,047 under section 14A read with rule 8D of the Income Tax Act, 1961, and \\u20b9;83,06,053 for delayed payment of Employee Provident Fund & ESI contributions. The Tribunal found merit in the appellant's claim regarding the double disallowance under section 14A read with rule 8D and restored the matter to the Assessing Officer for verification. However, it upheld the disallowance related to delayed payment of ESI/PF contributions, citing the Supreme Court's decision which ruled such payments are liable for disallowance if not made within the due dates prescribed under the respective Acts.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 123171 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 25-12-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 30-10-2022
• Other Referred Cases: Checkmate Services P. Ltd. v. I.T. Commissioner
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 139; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI ABY T VARKEY (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 2788/MUM/2022 Assessment Year: 2017-18 B.E. Billimoria & Company Ltd., Shiv Sagar Estate, Block-A 2 nd floor, DR. A.B. Road, Worli Mumbai-400018. Vs. The Dy. CIT, Circle-1(1)(1), Aayakar Bhavan, Maharshi Karve Road, Mumbai-400020. PAN No. AAACB 1542 P Appellant Respondent Assessee by : None Revenue by : Mr. Chetan M. Kacha, DR Date of Hearing : 26/12/2022 Date of pronouncement : 29/12/2022 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 29.09.2022 passed by the Ld. Commissioner of Income-tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: 1. The Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, has erred in confirming the disallowance of ₹ 1,26.047/- u/s 144 r.w.r 8D ignoring the fact that the same is already disallowed in the Computation of Income, resulting same disallowance made twice. 2. The Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, has erred in disallowing Employee Provident Fund & ESI amounts of Rs 83,06,053/ on ground that the amounts were not paid within the due dates under the respective Act, in spite of the fact that the amounts were paid before the due date of filing of the tax return u/s 139 of the Income 2. Briefly stated, facts of the case are that the assessee filed return of income declaring total loss of return of income filed by the assessee was selected for scrutiny and disallowance u/s 14A of the Income Act’) r.w.r. 8D amounting to of ESI/PF of ₹83,06,053/ Assessing Officer. On further appeal, the Ld. CIT(A) upheld the disallowance. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 3. We have heard rival submission of the parties dispute and perused the relevant material on record. As far as ground No. 1 of the appeal is concerned submitted that disallowance of also disallowed in the computation of the income a double disallowance. Since, this is a mat we restore this issue to the file of the Assessing Officer for verifying B.E. Billimoria & Company Ltd. fact that the same is already disallowed in the Computation of Income, resulting same disallowance made twice. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, has erred in disallowing ee Provident Fund & ESI amounts of Rs 83,06,053/ on ground that the amounts were not paid within the due dates under the respective Act, in spite of the fact that the amounts were paid before the due date of filing of the tax return u/s 139 of the Income Tax Act, 1961. Briefly stated, facts of the case are that the assessee filed return of income declaring total loss of ₹1,14,98,11,690/ return of income filed by the assessee was selected for scrutiny and disallowance u/s 14A of the Income-tax Act, 1961 (in short ‘the Act’) r.w.r. 8D amounting to ₹1,26,047/- and for delayed payment 83,06,053/- u/s 36(1)(va) of the Act was made by the Assessing Officer. On further appeal, the Ld. CIT(A) upheld the disallowance. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. We have heard rival submission of the parties dispute and perused the relevant material on record. As far as ground No. 1 of the appeal is concerned, in the ground it is submitted that disallowance of ₹1,26,047/- u/s 14A r.w.r. 8D was also disallowed in the computation of the income and therefore, it is double disallowance. Since, this is a matter of verification we restore this issue to the file of the Assessing Officer for verifying B.E. Billimoria & Company Ltd. ITA No. 2788/M/2022 2 fact that the same is already disallowed in the Computation of Income, resulting same disallowance made twice. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, has erred in disallowing ee Provident Fund & ESI amounts of Rs 83,06,053/- on ground that the amounts were not paid within the due dates under the respective Act, in spite of the fact that the amounts were paid before the due date of filing of the tax Briefly stated, facts of the case are that the assessee filed 1,14,98,11,690/-. The return of income filed by the assessee was selected for scrutiny and tax Act, 1961 (in short ‘the and for delayed payment va) of the Act was made by the Assessing Officer. On further appeal, the Ld. CIT(A) upheld the disallowance. Aggrieved, the assessee is in appeal before the on the issue-in- dispute and perused the relevant material on record. As far as in the ground it is u/s 14A r.w.r. 8D was nd therefore, it is ter of verification therefore, we restore this issue to the file of the Assessing Officer for verifying and decide accordingly. The ground is allowed for purposes. 3.1 As far as ground No. 2 of the appeal is concerned the Hon’ble Supreme Court in the case of Commissioner of Income 2016 in decision dated 12 payment of ESI/PF are 36(1)(va) of the Act. Supreme Court (supra), the issue-in-dispute is upheld. 4. In the result, the appeal filed by the ass for statistical purposes. Order pronounced 1963 on 29/12/2022. Sd/- (ABY T VARKEY JUDICIAL MEMBER Mumbai; Dated: 29/12/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai B.E. Billimoria & Company Ltd. and decide accordingly. The ground is allowed for nd No. 2 of the appeal is concerned the Hon’ble Supreme Court in the case of Checkmate Services Commissioner of Income-tax –I in Civil Appeal No. 2833 of 2016 in decision dated 12 th October, 2022 has he payment of ESI/PF are liable for disallowance in terms of section Respectfully following the finding of Hon’ble Supreme Court (supra), the disallowance made by the Ld. CIT(A) on dispute is upheld. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced under Rule 34(4) of the ITAT Rules, /2022. Sd/- ABY T VARKEY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : B.E. Billimoria & Company Ltd. ITA No. 2788/M/2022 3 and decide accordingly. The ground is allowed for statistical nd No. 2 of the appeal is concerned the Hon’ble Checkmate Services P. Ltd. v. I in Civil Appeal No. 2833 of held that delayed in terms of section Respectfully following the finding of Hon’ble the disallowance made by the Ld. CIT(A) on essee is partly allowed under Rule 34(4) of the ITAT Rules, OM PRAKASH KANT) ACCOUNTANT MEMBER 6. Guard file. //True Copy// B.E. Billimoria & Company Ltd. BY ORDER, (Sr. Private Secretary) ITAT, Mumbai B.E. Billimoria & Company Ltd. ITA No. 2788/M/2022 4 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai