Mallika Alloy Cast P Ltd, Indore V. The ACIT 1 (1), Indore

ITA 344/Ind/2022

AI Insights

Mallika Alloy Cast Private Limited appealed against the order of the Commissioner of Income-Tax (Appeals), which arose from a rectification order passed by the Centralized Processing Center (CPC), Bangalore. The dispute centered on the disallowance of Rs. 5,66,338 made by the AO during the processing of the tax return under section 143(1) of the Income-tax Act, 1961. This disallowance was based on a Tax Audit Report in Form No. 3CD, which erroneously reported '0' amounts for contributions that were actually paid. The assessee admitted a delay in the payment of Rs. 6,338, which was acknowledged by both parties during the hearing. The Tribunal found that the auditors had made a mistake in the original reporting but corrected it in a revised report submitted after the first appeal decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130731 (ITAT-INDORE)
• Duration Of Justice: 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 19-09-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: WAY OF CONTRIBUTION
• Keywords: Rectification of order
• Section: 154; 143(1)

Judgement Text

Page 1 of 4 आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.344/Ind/2022 Assessment Year: 2019-20 Mallika Alloy Cast Private Limited, 403, Varshadeep Apartments, South Tukoganj, Street No.1, Indore. बनाम/ Vs. ACIT, 1(1), Indore. (Assessee / Appellant) (Revenue / Respondent) PAN: AAECM7496H Assessee by Shri Rajesh Mehta, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 19.07.2023 Date of Pronouncement 20.07.2023 आदेश / O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by appeal-order dated 25.07.2022 passed by learned Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre [“Ld. CIT(A)”], which in turn arises out of rectification order dated 24.06.2020 passed by CPC, Bangalore u/s 154 for Assessment-Year [“AY”] 2019-20, the assessee has filed this appeal. Mallika Alloy Cast P.Ltd.v. ACIT, Indore ITA No.344/Ind/2022 Assessment year 2019-20 Page 2 of 4 2. Heard the learned Representatives of both sides at length and case- records perused. 3. The sole grievance of assessee in present appeal is the disallowance of Rs. 5,66,338/- made by the AO on account of disallowance of Employees’ Contribution to PF/ESI u/s 36(1)(va) of the Income-tax Act, 1961 alleged to have been paid by assessee beyond the due dates prescribed under PF/ESI laws. 4. Ld. AR for assessee drew our attention to the order passed by CPC u/s 154/143(1) wherein the impugned disallowance had been made on the basis of Tax Audit Report in Form No. 3CD dated 31.08.2019 issued by Mr. Sanjay Kumar Airen, Chartered Accountant, auditors of assessee. Referring to the reporting made by the auditors in clause no. 20(b) of said Form 3CD with respect to the amounts received by assessee by way of contribution from employees, Ld. AR demonstrated that the auditors have given datewise details under the headings Sl.No., Nature of fund, Sums received from employees, Due date for payment, Actual amount paid and Actual date of payment. Ld. AR pointed out that the auditors have given all details correctly but they have made a mistake in the information provided in column titled “Actual amount paid” which is quite apparent on the first look itself that the auditors have mentioned “O” amount against all dates. Ld. AR submitted that the AO has made impugned disallowance in the processing u/s 143(1) just because of “0” amount reported by auditors in actual Mallika Alloy Cast P.Ltd.v. ACIT, Indore ITA No.344/Ind/2022 Assessment year 2019-20 Page 3 of 4 payment. Therefore, the disallowance made by AO is wrong in as much as the assessee had made all payments. However, Ld. AR frankly admitted that out of various sums, there was in fact delay in making payment of one sum of Rs. 6,338/- appearing against item No. 4 reported by auditors for which due date was 15.08.2018 but the assessee made payment on 16.08.2018. Ld. AR submitted that during the course of first-appeal, the assessee has filed challans of all payments but the CIT(A) has not taken into account. Ld. AR further submitted that the assessee has also filed a revised audit report on 12.08.2022 to Income-tax Department, signed by same auditor, Mr. Sanjay Kumar Airen, copy placed before us in which “0” has been replaced by actual amount paid. Therefore, according to Ld. AR, out of disallowance of Rs. 5,66,338/- made by AO, disallowance of Rs. 6,338/- is only sustainable and balance is liable to be deleted. Ld. AR prays to pass order accordingly. Ld. DR for the revenue fairly agreed to the submissions of the Ld. AR. 5. We have considered submissions of both sides and perused the material held on record. After careful consideration, we find that the disallowance has been made for the precise reason that in the original report dated 31.08.2019, the auditors have made wrong reporting as narrated above but in the revised-report, they have rectified the mistake. Although the revised report is filed on 12.08.2022, which is after decision of first- appeal, but it establishes a fact that the auditors have made mistake in original reporting. Needless to mention that the Ld. AR standing at the bar has made a clear assertion that all challans were submitted to the Ld. CIT(A) during first hearing and that all payments had been made by due dates under PF/ESI laws except a sum of Rs. 6,338/-. We also find that the Ld. Mallika Alloy Cast P.Ltd.v. ACIT, Indore ITA No.344/Ind/2022 Assessment year 2019-20 Page 4 of 4 DR for the Revenue was also convinced with the submission of Ld. AR. Therefore, we are satisfied that the disallowance of Rs. 6,338/- is only required to be upheld and remaining disallowance is liable to be deleted. We order Ld. AO to pass order accordingly. 6. Resultantly, this appeal is partly allowed. Order pronounced in the open court on 20.07.2023. Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore Ǒदनांक /Dated : 20.07.2023 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore