Amitkumar S. Solanki, Vadodara V. The ITO, Ward-2, Godhra

ITA 456/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7823 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-04-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 01-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PALAK PAVAGADHI
• Section: 143(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA RAGHUNATH KAMBLE, JUDICAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 456/Ahd/2023 ( नधा रण वष / Assess ment Ye ars : 2 017-18) A mit ku ma r S So la nk i 63, N ar a ya n G ree n Ba ngl o ws, S a ma Sa vli Ro ad, V ad od ra - 39 00 24 बनाम/ V s . Th e In co me T ax O ffi ce r W ar d - 2, G od hra थायी लेखा सं./जीआइआर सं./P A N / G IR N o . : BN IP S 7 9 1 9 E (Appellant) . . (Respondent) अपीलाथ ओर से /Appellant by : Shri Palak Pavagadhi, A.R. यथ क ओर से/Respondent by : Ms. Saumya Pandey Jain, Sr. DR D a t e o f H e a r i n g 15/04/2024 D a t e o f P r o n o u n c e m e n t 17/04/2024 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NF AC) , Del hi, dated 23.11.2022 for the Assessment Year 2017-18. 2. The assessee had filed his return of inco me for A.Y. 2017- 18 declaring an inco me of Rs .49,44,188/-. The return was processed u/s. 143(1) of the Act on 20.03.2019 and while processing the return an addition of Rs.25,99,845/- was made in respect of unpaid e mplo yees ’ co ntribution to EPF/ESI u/s. ITA No.456/Ahd/2023 (Amitkumar S. Solanki vs. ITO) A.Y.– 2017-18 - 2 – 36(1)(va) of the Act. This adjust ment was made on the b asis of the tax audit report and for the reason that the e mplo yees ’ contribution to EPF/ESI was not paid within the due dates. The assessee had challenged this addition before the CIT( A), which was dis missed vide the i mpugned order and against which the present appeal has been filed. 3. The sole ground of the appeal raised by the assessee is as under: “1. The CIT(A) has erred in passing the order u/s 250 of Income Tax Act, 1961 by making the disallowance of expenditure claimed u/s. 36(1)(va) of the said Act amounting to Rs.25,99,845.” 4. Shri Palak Pavaga dhi, ld. AR for the assessee submitted that there was a dela y of 131 days in filing this appeal for the reason that the intimation u/s. 143(1) of the Act was not available with the assessee. The sa me was also not available on the e-filing portal and co mmu nications were ma de b y the assessee on various occasions for providing a copy of the inti mation. There was also a dela y on the pa rt of the previous AR of the assessee. The depart ment has not raised an y serious objecti on to the condonation of dela y. Considering the explanation of the assessee, the delay in filing of the a ppeal is condoned. 5. On merits, the ld. AR sub mitted t hat in the absence of intimation u/s. 14 3(1) of the Act, th e exact reason for addition to the return of income was not known to the assessee. It was for this reason that no proper co mpliance could be made before the ld. CI T( A). He further sub mitted that there was a wrong ITA No.456/Ahd/2023 (Amitkumar S. Solanki vs. ITO) A.Y.– 2017-18 - 3 – reporting in tax audit report based on which disallowance has been made while p rocessing the return u/s. 143(1) of th e Act. The ld. AR clarified that there was no del a y on the part of the assessee in depositing the e mplo yees ’ contribution to EPF/ESI and the sa me were deposited within the due dates as per the respective Acts. In this rega rd, the assessee h as filed additional evidences in support of the clai m of pa yme nt of EPF/ESI contributions being made within the due dates. It was further explained that these additional evidences could not be filed before the ld. CIT( A) due to non-availability of th e order under Section 143(1) of the Act. 6. The ld. DR , on the other hand, sub mitted that the disallowance has been made in the order u/s. 143(1) of the Act on the basis of audit report and that the assessee had not revised the audit report in case it was found that there was ce rtain mis- reporting in the audit report. On the issue of verif ication of payment of the e mplo yees ’ contribution to EPF/ESI, the depart ment has no objection if the matter was set aside for this purpose. 7. We have considered the submissions of both the parties. The disallowance of Rs.25,99,845/- u/s. 36(1)(va) of the Act, while processing the return u/s.143(1) of the Act, was made on the basis of tax audit report filed b y the assessee. In colu mn 26(i )(B)(b) of the tax audit report it was clearl y mentioned that ESIC of Rs.5,40,238/- and PF of Rs .20,59,606/- was not paid on or before the due date. The assesse has, however, contended that this was ITA No.456/Ahd/2023 (Amitkumar S. Solanki vs. ITO) A.Y.– 2017-18 - 4 – a mis-reported figure as the details of contributions received fro m e mplo yees f or various funds as referred in section 36(1)(va) of the Act was to be reported in co lu mn 20(b) of the tax audit report. According to the assesse the outstanding emplo yees ’ contribution of P F & ESI for Mar ch was Rs.11,21,444/- only which should have been reported in c olumn 20(b) of the tax audit report. Further, outstanding e mployer ’s contribution of EPF & ESI for M arch was Rs .14,08,372/- which should have been reported in column 26(i)(B)(a) o f the tax audit r eport. The balance a mount of Rs.70,028/- was stated to be administrative charges. 8. It is seen fro m the tax audit report that the figures reported in column 26 of t he report are in re spect of provision of section 43B of the Act. Therefore, no addition in respect of outstanding e mplo yees ’ contribution of EP F & ESI could have been made on the basis of the figures as reported in column 26. The e mplo yees ’ contribution was to be reported in column 20 and not in column 26. Thus the contention of the assesse that there was mi sreporting in the tax audit report is found to be apparently corr e ct. It was further submitted that the outstanding emplo yees ’ as well as e mplo yer ’s contribution to EPF & ESI were all paid within the due dates for which additional evidences have been brought on record. These fact s as well as the a dditional evidences filed by the assessee in the course of this appeal are required to be verified in order t o ascertain whether the addition was correctl y made while proc essing the return of inco me. Ther efore, the mat ter is set aside to th e file of the AO to verif y the actual ITA No.456/Ahd/2023 (Amitkumar S. Solanki vs. ITO) A.Y.– 2017-18 - 5 – liability on account of e mployees ’ / e mplo yer ’s contribution of EPF/ESI and whether the sa me were paid within the due dates of the respect Acts / within the due date as per Inco me Tax Act. After car r ying out the necessary ver ification the AO ma y decide the issue afresh in accordance with the provisions of law. The assessee ma y be allowed a reasonable opportunity to p roduce the evidence for pa yments made towards the outstanding e mplo yees ’/e mployer ’s contribution to EPF/ ESI as reflected in the tax audit report. 9. In the result, appeal preferred b y the assessee is allowed for statistical purposes. This Order pronounced on 17/04/2024 Sd/- Sd/- (SUCHITRA RAGHUNATH KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 17/04/2024 S. K. SINHA True Copy आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. "वभागीय &त&न ध, आयकर अपील)य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड/ फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad