TRIO JEWELS PRIVATE LIMITED , MUMBAI V. THE ASSISTANT DIRECTOR OF INCOME TAX, CPC, BENGALURU

ITA 297/MUM/2023

AI Insights

The case involves Trio Jewels Private Limited appealing against the order of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, which confirmed the adjustments made by the CPC, Bengaluru. These adjustments pertained to disallowances of deductions amounting to Rs. 8,80,023, which were initially made by the CPC under Section 143(1)(a) of the Income-tax Act, 1961. The primary contention of the assessee was that these adjustments were made without prior intimation and disregarded the disclosures made in the Tax Audit Report. The Tribunal examined the Tax Audit Report and found that the payments in question were indeed made before the due dates prescribed under the relevant acts, thus aligning with Section 43B of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123409 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 12-04-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 31-01-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 43B; 143(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI ABY T VARKEY (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 297/MUM/2023 Assessment Year: 2020-21 Trio Jewels Private Limited, GJ-02, Seepz-SEZ, J.V.L.R. Andheri East, Mumbai-400096. Vs. The ACIT CPC, Bengaluru Karnataka-560 500 PAN No. AABCT 7791 D Appellant Respondent Assessee by : Mr. Aamod Prabhudesai, AR Revenue by : Ms. Richa Gulati, DR Date of Hearing : 13/04/2023 Date of pronouncement : 20/04/2023 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 28.12.022 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2020-21 in relation to intimation/processing order passed u/s 143(1) of the Income-tax Act, 1961 (in short ‘the Act’) by the Central Processing Centre, Bangalore. The grounds raised by the assessee are reproduced as under: “In the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the adjustments made by the Ld. ADIT, CPC aggregating to Rs. 8,80,023/ factual aspects: (a) Same are made without complying to the stipulated under 1st proviso to Section 143(1)(a) of the Act requiring service of prior intimation of proposing such adjustments; (b)Same are made disregarding the disclosure(s) made in the Tax Audit Report and (c)Same are not covered by any of t 143(1)(a). Without prejudice to the above and in the alternate 2. confirming the adjustment made by the Ld. ADIT, CPC of Rs. 8,79,915 / (a)on the presumption that the sums aggregating to Rs. 8,79,915/-represent employees' contributi which were not paid on or before the due date prescribed under the respective Act and (b) disregarding the disclosure made vide Clause 26)(B) of the Tax Audit Report that these sums are covered by Section 43B; which were paid on or before return of income u/s. 139(1) of the Act. 3. confirming the adjustment made by the Ld. ADIT, CPC of employees' contribution to MLWF of Rs. 108/ presumption that the same was not paid on or before the due date prescrib disclosure made vide Clause 20(b) of the Tax Audit Report that the same was paid before the prescribed due date. It is humbly prayed that the reliefs as prayed for hereinabove should be granted. the facts and circumstances of the case and in law, the Ld. CIT(A) erred in- confirming the adjustments made by the Ld. ADIT, CPC aggregating to Rs. 8,80,023/- disregarding the following factual aspects: Same are made without complying to the stipulated under 1st proviso to Section 143(1)(a) of the Act requiring service of prior intimation of proposing such adjustments; (b)Same are made disregarding the disclosure(s) made in the Tax Audit Report and (c)Same are not covered by any of the clauses of Section Without prejudice to the above and in the alternate confirming the adjustment made by the Ld. ADIT, CPC of Rs. 8,79,915 /-: (a)on the presumption that the sums aggregating to Rs. represent employees' contribution to PF and ESIC which were not paid on or before the due date prescribed under the respective Act and disregarding the disclosure made vide Clause 26)(B) of the Tax Audit Report that these sums are covered by Section 43B; which were paid on or before the due date of furnishing the return of income u/s. 139(1) of the Act. confirming the adjustment made by the Ld. ADIT, CPC of employees' contribution to MLWF of Rs. 108/ presumption that the same was not paid on or before the due date prescribed under the respective Act; disregarding the disclosure made vide Clause 20(b) of the Tax Audit Report that the same was paid before the prescribed due date. It is humbly prayed that the reliefs as prayed for hereinabove should be granted. Trio Jewels Pvt. Ltd. 2 ITA No. 297/M/2023 the facts and circumstances of the case and in law, the Ld. confirming the adjustments made by the Ld. ADIT, CPC disregarding the following Same are made without complying to the condition stipulated under 1st proviso to Section 143(1)(a) of the Act requiring service of prior intimation of proposing such (b)Same are made disregarding the disclosure(s) made in the he clauses of Section Without prejudice to the above and in the alternate confirming the adjustment made by the Ld. ADIT, CPC of (a)on the presumption that the sums aggregating to Rs. on to PF and ESIC which were not paid on or before the due date prescribed disregarding the disclosure made vide Clause 26)(B) of the Tax Audit Report that these sums are covered by Section 43B; the due date of furnishing the confirming the adjustment made by the Ld. ADIT, CPC of employees' contribution to MLWF of Rs. 108/- on the presumption that the same was not paid on or before the due ed under the respective Act; disregarding the disclosure made vide Clause 20(b) of the Tax Audit Report that the same was paid before the prescribed due date. It is humbly prayed that the reliefs as prayed for hereinabove 2. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. In ground No. 1, the assessee has challenged adjustment Act without prior intimation of proposing such adjustment. On being questionedby the Bench for filing the e with the Department, the assessee express unavailability in producing correspondence and therefore in absence of any evidence supporting the allegation of non accordingly dismissed. 3. In ground No. 2 of Rs.8,79,915/- has been wrongly made by the CPC. The Ld. Counsel of the assessee referred to the clause No. 26(i)(B)(a) of the Tax Audit Report filed online. The said is reproducedbelow for ready reference : 26(i)(B)(a) Paid on or before the due date for furnishing the return of income of the previous year under section 139(1) S. No. Section 2. Sec 43(c)-sum 3. Sec 43(b)- gratuity, other fund 4. Sec 43B(f)-leave encashment 4. On perusal of the above information filed by the assessee tax audit report, which is the basis of adjustment by the Central Processing Centre, we find that sum of Rs.8,48,354/ bonus payment which is allowed subject to the provisions of secti 43B of the Act i.e. payment before due date of filing of return of income. The payment of Rs.20,000/ d rival submission of the parties on the issue dispute and perused the relevant material on record. In ground No. 1, the assessee has challenged adjustment mad u/s 143(1)(a) of the Act without prior intimation of proposing such adjustment. On the Bench for filing the e-mail correspondence the Department, the assessee express unavailability in producing correspondence and therefore in absence of any evidence supporting the allegation of non-intimation. The ground of appeal dingly dismissed. 2, the assessee has challenged that adjustment has been wrongly made by the CPC. The Ld. Counsel of the assessee referred to the clause No. 26(i)(B)(a) of the Tax Audit Report filed online. The said clause of the tax audit report for ready reference : Paid on or before the due date for furnishing the return of income of the previous year under Nature of liability sum referred to u/s 36(1)(ii) Bonus -provident, superannuation, gratuity, other fund Emoployers contribution to provident fund leave encashment Leave Encashment On perusal of the above information filed by the assessee which is the basis of adjustment by the Central Processing Centre, we find that sum of Rs.8,48,354/ us payment which is allowed subject to the provisions of secti 43B of the Act i.e. payment before due date of filing of return of income. The payment of Rs.20,000/- relates to leave encashment Trio Jewels Pvt. Ltd. 3 ITA No. 297/M/2023 d rival submission of the parties on the issue-in- dispute and perused the relevant material on record. In ground No. u/s 143(1)(a) of the Act without prior intimation of proposing such adjustment. On mail correspondence the Department, the assessee express unavailability in producing correspondence and therefore in absence of any evidence intimation. The ground of appeal is , the assessee has challenged that adjustment has been wrongly made by the CPC. The Ld. Counsel of the assessee referred to the clause No. 26(i)(B)(a) of the clause of the tax audit report Paid on or before the due date for furnishing the return of income of the previous year under Nature of liability Amount 848354 Emoployers contribution to 11561 Leave Encashment 20000 On perusal of the above information filed by the assessee in which is the basis of adjustment by the Central Processing Centre, we find that sum of Rs.8,48,354/- is towards us payment which is allowed subject to the provisions of section 43B of the Act i.e. payment before due date of filing of return of relates to leave encashment which also is subject to section 43B of the Act. The third item is employer contribution to provident fund and which is als to section 43B of the Act. Therefore, the Assessing Officer of the CPC has wrongly made adjustment for total amount of Rs.8,79,915/- under the assumption that said amount being employee’s contribution the adjustment without verification of the application of mind. In view of above payment of Rs.8,79,915/ being employee’s contribution to PF and ESI deleted. The order of the Ld. CIT(A) on the issue accordingly set aside. allowed. 5. The ground No. 3 relates to ‘Maharashtra Labour Welfare Fund again CPC has adjusted/disallowed holding that same after the due date prescribed under the respect Act. 6. Before us, the Ld. Counsel of the assessee referred to the clause 20(b) of the tax audit report and Rs.108/- for ‘Maharashtra Labour Welfare Fund 13.01.2022 which is before the due date of the payment i.e. on 15.1.2020. In view of the above facts, the sum paid being within the due date prescribed under the relevant Act adjustment/disallowance made by the CPC and upheld by the Ld. CIT(A) is deleted. The ground No. 3 of the appeal is allowed. which also is subject to section 43B of the Act. The third item is employer contribution to provident fund and which is als to section 43B of the Act. Therefore, the Assessing Officer of the CPC has wrongly made adjustment for total amount of under the assumption that said amount being contribution to PF/ESI. The Ld. CIT(A) has also upheld adjustment without verification of the factual information and application of mind. In view of above payment of Rs.8,79,915/ contribution to PF and ESI, the disallowance deleted. The order of the Ld. CIT(A) on the issue accordingly set aside. The ground No. 2 of the appeal is accordingly The ground No. 3 relates to employee’s contribution to Maharashtra Labour Welfare Fund’( MLWF) of Rs.108 again CPC has adjusted/disallowed holding that same after the due date prescribed under the respect Act. Before us, the Ld. Counsel of the assessee referred to the clause 20(b) of the tax audit report and submitted that the Maharashtra Labour Welfare Fund’ was paid before 3.01.2022 which is before the due date of the payment i.e. on 15.1.2020. In view of the above facts, the sum paid being within the due date prescribed under the relevant Act adjustment/disallowance made by the CPC and upheld by the Ld. ) is deleted. The ground No. 3 of the appeal is allowed. Trio Jewels Pvt. Ltd. 4 ITA No. 297/M/2023 which also is subject to section 43B of the Act. The third item is employer contribution to provident fund and which is also subject to section 43B of the Act. Therefore, the Assessing Officer of the CPC has wrongly made adjustment for total amount of under the assumption that said amount being PF/ESI. The Ld. CIT(A) has also upheld factual information and application of mind. In view of above payment of Rs.8,79,915/- not the disallowance is deleted. The order of the Ld. CIT(A) on the issue-in-dispute is The ground No. 2 of the appeal is accordingly contribution to the of Rs.108/-. which again CPC has adjusted/disallowed holding that same was paid after the due date prescribed under the respect Act. Before us, the Ld. Counsel of the assessee referred to the submitted that the sum of was paid before 3.01.2022 which is before the due date of the payment i.e. on 15.1.2020. In view of the above facts, the sum paid being within the due date prescribed under the relevant Act,therefore, the adjustment/disallowance made by the CPC and upheld by the Ld. ) is deleted. The ground No. 3 of the appeal is allowed. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on Sd/- (ABY T VARKEY JUDICIAL MEMBER Mumbai; Dated: 20/04/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 20/0 Sd/ ABY T VARKEY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Trio Jewels Pvt. Ltd. 5 ITA No. 297/M/2023 In the result, the appeal of the assessee is allowed. 04/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai