Utkranti Solutions Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-4(1)(1), Ahmedabad

ITA 407/AHD/2022

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9461 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 10-10-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 27-10-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 154; 234B; 143(1); 250

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: Ms. Suchitra Kamble, Judicial Member Utkranti Solution Pvt. Ltd. A/46, 3 rd Floor, ‘Nobles’, Opp. Nehru Bridge, Ashram Road, Ahmedabad-380009 PAN: AABCU1620L (Appellant) Vs The Income Tax Officer, Ward-4(1)(1), Ahmedabad, (Respondent) Assessee by: Shri Hemanshu Shah, A.R. Revenue by: Ms. Saumya Pandey Jain, Sr. D.R. Date of hearing : 11-10-2023 Date of pronouncement : 20-12-2023 आदेश/ORDER This is an appeal filed against the order dated 23-09- 2022 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2017-18. 2. The grounds of appeal are as under:- ITA No. 407/Ahd/2022 Assessment Year 2017-18 I.T.A No. 407/Ahd/2022 A.Y. 2017-18 Page No. Utkranti Solution Pvt. Ltd. vs. ITO 2 “1. In law and in facts and circumstances of the Appellant's case, the learned Commissioner of Income-tax (Appeals) has erred in points of law and facts 2. In law and in the facts and circumstances of the Appellant's case, the learned Commissioner of Income Tax (Appeals) has grossly erred in passing order u/s 250 of the I.T. Act on 23.09.2022 though adjournment was sought upto 23.09.2022 The order passed on 23.09.2022 is, therefore, void and have no legal force. 3. In law and in facts and circumstances of the Appellant's case, the learned Commissioner of Income tax (Appeals) has grossly erred in dismissing the appellant's ground in making disallowance of delay in making payment of contributions to Provident Fund Rs. 21,52,502/- and ESI for Rs 1,15,936/ 4. In law and in facts and circumstances of the Appellant's case, the learned Commissioner of Income-tax (Appeals) has grossly erred in confirming charging interest u/s 234B of I.T. Act of Rs 25,200/- 5. In law and in facts and circumstances of the Appellant's case, the learned Commissioner of Income-tax (Appeals) has grossly erred in confirming charging interest u/s 234C of IT Act of Rs 5,091/-. 3. Rectification order u/s. 154 of the Income Tax Act was passed in assessee’s own case on 19-11-2019 thereby determining the total income at Rs. 32,43,440/-. As there was a delay in payment of contribution of provident fund and ESI aggregating to Rs. 22,68,438/- which was added to the total income of the assessee. Interest u/s. 234B of the Income Tax Act at Rs. 25,200 and u/s. 234C of the Income Tax Act at Rs. 5091/- was raised for Rs. 131,100/-. I.T.A No. 407/Ahd/2022 A.Y. 2017-18 Page No. Utkranti Solution Pvt. Ltd. vs. ITO 3 4. Being aggrieved by the rectification order u/s. 154 of the Act, the assessee filed appeal before the ld. CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. At the time of hearing, the assessee submitted that the claim was not made incorrectly as the matter was pending before the Supreme Court conflicting decision of Hon’ble High Courts and as regards to reference u/s. 143(1)(a)(iv) of the Act the ld. A.R. submitted that the audit report has correctly disclosed the factual position and there was no need to disallow the computation as the matter was pending before the Hon’ble Supreme Court. The ld. A.R. has filed written note which is as follows:- “Appeal was in connection with the disallowance of belated payment of PF and ESI for Rs 22,68,438. The details of payments were mentioned in the table on paper book page-12. Belated payment list is enclosed marked Ann A. Ld CIT(A) confirmed the disallowance. Main contentions 1) The return of income was filed on 04-06-2018. Intimation u/s 143(1) of I.T. Act was passed on 15-04-2019. Hon'ble SC passed order in case of Checkmate Services Pvt. Ltd. On 12-10-2022. Till the intimation u/s 143(1) of I.T. Act was passed on 15-04- 2019, the matter was not finally settled by Hon'ble SC. Till that, various High Courts decided the issue either in favour of revenue or against the revenue. Hon'ble Gujarat High Court decided the issue in case of GSRTC in favour of revenue. Hence, in view of the divergent decisions of Hon'ble High Courts and the matter pending before Hon'ble SC, the issue is, at least, a debatable which cannot be subject matter of disallowance made in the intimation u/s 143(1) of I.T. Act. The scope of adjustment is very limited. I.T.A No. 407/Ahd/2022 A.Y. 2017-18 Page No. Utkranti Solution Pvt. Ltd. vs. ITO 4 2) Following two Tribunals decided the issue against revenue. a) Arihant Authomobiles Vs ITO 137 taxmann.com 258 (Jaipur Tribunal) b) Jasbir Singh Kaberwal Vs ADIT- 1787/Mum/2021 (Mumbai Tribunal) The decisions of these two Tribunals were given in the paper book. The decision of Hon'ble Gujarat High court in the case of GSRTC and decision of Hon'ble SC in the case of Checkmate Services were referred. 3) In the Intimation, disallowance was made on account of following two reasons. (i) Incorrect claim u/s. 143(1)(a)(ii) (ii) Disallowance u/s. 143(1)(a)(iv) Please refer to page-23 of the paper book. a) The claim was not made incorrectly as the matter was pending before Hon'ble SC with conflicting decisions of Hon'ble HCs. The claim was legitimately made in the return of income. c) As regards reference to section 143(1)(a)(iv) of I.T. Act, it is submitted that audit report has correctly disclosed the factual position. There was no need to disallow in the computation as the matter was pending before Hon'ble SC. d) It is also pertinent that CPC cannot make disallowance in different subsections, It can make disallowance applying either of one sub section. Two alternate reasons for disallowance shows non application of mind. Details of PF / ESI payments made a) Employees' contribution to ESI: Sr. no. Particulars Amount (Rs.) Due date of payment Actual date of payment 1 ESI 7,459 15-10-2016 06-04-2017 I.T.A No. 407/Ahd/2022 A.Y. 2017-18 Page No. Utkranti Solution Pvt. Ltd. vs. ITO 5 2 14,511 15-11-2016 21-04-2017 3 12,717 15-12-2017 21-04-2017 4 14,824 16-01-2017 21-04-2017 5 23,687 15-02-2017 26-04-2017 6 22,277 15-03-2017 26-04-2017 7 20,461 17-04-2017 26-04-2017 Total 1,15,936 b) Employees' contribution to provident fund: Sr. no. Particulars Amount (Rs.) Due date of payment Actual date of payment 1 PF 21,8331 16-05-2016 01-07-2016 2 23,3919 15-06-2016 15-09-2016 3 24,1401 15-07-2016 16-09-2016 4 22,4253 15-08-2016 06-02-2017 5 20,2677 15-09-2016 08-02-2017 6 20,4385 15-10-2016 08-02-2017 7 20,1578 15-11-2016 20-02-2017 8 18,7731 15-12-2016 20-02-2017 9 21,6421 16-01-2017 21-02-2017 10 21,6805 15-02-2017 21-02-2017 11 5,001 15-08-2016 21-02-2017 Total 21,52,502 I.T.A No. 407/Ahd/2022 A.Y. 2017-18 Page No. Utkranti Solution Pvt. Ltd. vs. ITO 6 Grand Total 22,68,438 6. The ld. D.R. submitted that in assessee’s own case for A.Y. 2000-2001 the matter was decided in light of Hon’ble Apex Court’s decision in case of Checkmate Services Pvt. Ltd. vs. CIT order dated 12-10-2022, Civil Appeal No. 2833 of 2016 which was decided against the assessee in case of the provident fund and ESI dues were paid after the statutory due dates. The ld. D.R. relied upon the rectification order and the order of the CIT(A). 7. Heard both the sides and perused all the relevant materials available on record. The contention of the ld. A.R. that the issue be debatable and as regards reference to section 143(1)(a)(iv) of the Act audit report correctly disclosed the factual position will not come to rescue the assessee as the Jurisdictional High Court at that particular time that of Gujarat Road Transport Corporation (2014) 41 taxman.com 100 was already against the assessee on the same issue which was ultimately confirmed by the Hon’ble Apex Court in case of Checkmate Services Pvt. Ltd. (supra). Both the decisions decides this issue categorically and in fact the plea of the assessee/ld. A.R. will not be correct as the assessee was very well aware about the decision of jurisdictional High Court . I.T.A No. 407/Ahd/2022 A.Y. 2017-18 Page No. Utkranti Solution Pvt. Ltd. vs. ITO 7 The claim made under delay to provident and ESI as per the statutory limb should not be allowed as per section 36 of the Income Tax Act as held by the Jurisdictional High Court which was subsequently confirmed by the Apex Court and therefore the contention of the ld. A.R. that this will not be applicable in assessee’s case appears to be incorrect. Hence, the appeal of the assessee is dismissed. 8. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 20-12-2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad : Dated 20/12/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप /सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद