Muktar Automobiles Private Limited, Verna V. DCIT, CPC, Bengaluru

ITA 47/PAN/2021

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The appeals by Goa Electronics Ltd. and Muktar Automobiles Pvt. Ltd. challenged the disallowances made under section 36(1)(va) of the Income Tax Act, 1961, due to delayed deposit of employees' contributions to PF & ESI for the assessment year 2018-19. Both companies had their returns processed by the Central Processing Centre, Bengaluru, which resulted in additions to their declared incomes due to these delays. The companies argued that the payments were made before the due date as per section 139(1) of the Act, claiming compliance with section 43B. However, the Department contended that the disallowances were necessary as the deposits were not made within the prescribed due dates under the respective Acts. The Tribunal, referencing a similar case and the Supreme Court's decision, upheld the disallowances.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136153 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: WT(D)
• Next Hearing Date: 09-07-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 23-12-2021
• Other Referred Cases: M/s Kothari Agritech Pvt. Ltd. Vs ADIT, Bengaluru, Checkmate Services P. Ltd. & Ors Vs CIT & Ors, Sonigara Gold LLP Vs ITO, ACIT Vs SMS Ltd, Purushottam Kumar Agrawal Vs ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 143(1); 250; 139(1)

Judgement Text

॥ आयकर अपीलीय न्यायाधिकरण, पणजी न्यायपीठ, पणजी में ॥ ITAT-Panaji Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL, PANJI BENCH, PUNE BEFORE HON’BLE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपीलसं. / ITA No. 41/PAN/2021 धििाारण वर्ा / Assessment Year : 2018-19 Goa Electronics Ltd., Ground Floor, Sharma Shakti Bhavan, EDC Complex, Patto, Panaji, Goa – 403 001 PAN:AAACG7029G . . . . . . . अपीलाथी / Appellant बिाम / Vs Deputy Commissioner of Income Tax Officer CPC, Bengaluru. . . . . . . .प्रत्यथी / Respondent आयकर अपीलसं. / ITA No. 47/PAN/2021 धििाारण वर्ा / Assessment Year : 2018-19 Muktar Automobiles Pvt. Ltd., Plot B-2, B-3, Phase-IA, Verna Indl. Estate Verna, Goa – 403 722 PAN:AAHCM1932D . . . . . . . अपीलाथी / Appellant बिाम / Vs Deputy Commissioner of Income Tax Officer CPC, Bengaluru. . . . . . . .प्रत्यथी / Respondent द्वारा / Appearances Assessee by : Adv. Ms Eesha Dukle for ITA No. 41/PAN/2021 & None for ITA No. 47/PAN/2021 Revenue by : Shri N. Shrikanth सुनवाई की तारीख / Date of conclusive Hearing : 10/07/2023 घोषणा की तारीख / Date of Pronouncement : 12/07/2023 ITA No.41/PAN/2021 AY : 2018-19 ITA No. 47/PAN/2021 AY : 2018-19 ITAT-Panaji Page 2 of 4 आदेश / ORDER PER G. D. PADMAHSHALI, AM; Both these appeals of the different assessee are assailed against order of National Faceless Appeal Centre, Delhi [for short ‘NFAC’] dt. 28/09/2021 & 25/10/2021 passed u/s 250 of the Income Tax Act, 1961 [for short ‘the Act’] confirming the disallowance made u/s 36(1)(va) by the Deputy Commissioner of Income Tax, Central Processing Centre, Bengaluru [for short ‘CPC’] u/s 143(1) of the Act for assessment year [for short ‘AY’] 2018-19. 2. Without rearticulating grounds from appeal memo, its apt to voice that, the sole & substantive ground of present appeals are directed against disallowance made u/s 36(1)(va) on the basis of information reported in tax audit report [for short ‘TAR’]. Since both these appeals involved the same issue for the purpose of brevity and convenience these are heard together for a common order. 3. Briefly stated, the facts of ITA No. 41/PAN/2021 3.1 The assessee is a company, filed its return of income for AY 2018-19 on 07/10/2018 declaring total income of ₹NIL after adjusting brought forward losses at (-) ₹60,90,693/-. 3.2 The return of income was processed u/s 143(1) of the Act on 07/08/2020 with an addition u/s 36(1)(va) of the Act thus determined the total income at ₹13,15,486/-, vide intimation dt. 19/10/2019. While doing so, the AO made a disallowance of ₹13,15,486/-, u/s. 36(1)(va) of the Act for delayed payment of employees’ contribution towards PF & ESI. 4. Briefly stated, the facts of ITA No. 47/PAN/2021 4.1 The appellant is a Private Limited Company having dealership of M/s. Mahindra & Mahindra Ltd., whereby they sell Mahindra & Mahindra brand vehicles in the state of Goa. ITA No.41/PAN/2021 AY : 2018-19 ITA No. 47/PAN/2021 AY : 2018-19 ITAT-Panaji Page 3 of 4 4.2 The appellant filed its return of income on 25/02/2019 declaring total income at ₹87,96,280/-. Subsequently, the return was processed by CPC u/s 143(1) of the Act by making adjustment of ₹30,05,030/-, on account of disallowance u/s 36(1)(va) of the Act. 5. Aggrieved by the aforestated additions u/s 36(1)(va) of the Act, both these assessee’s taken up the matter before first appellate authority and in the event of unsuccessful attempt, the assessees brought up the matter in appeal before the Tribunal against said disallowance alleging the action of both the tax authorities below as contra-legem. 6. It is an undisputed fact that, the TAR filed by both the assessees indicated the prescribed due dates of payment to the relevant funds under the respective Acts relating to employees share and the said amounts were deposited by both the assessees beyond such prescribed due dates but before the filing of the return u/s 139(1) of the Act. The case of the assessee before the lower tax authorities was that such payments made on or before the due date as per section 139(1) of the Act amounts to sufficient compliance of the provisions in terms of section 43B of the Act, and hence not calling for any disallowance. Per contra, the Department has set up a case that the disallowance is warranted and inevitable because delayed deposit of the employees share beyond the prescribed due date under the respective Act is unsheltered by section 43B of the Act. 7. Nota bene, a similar issue came before the co-ordinate bench of the Tribunal in the case of “M/s Kothari Agritech Pvt. Ltd. Vs ADIT, Bengaluru” vide ITA No. 320/PUN/2022 wherein the Tribunal following the latest judgement of Hon’ble Supreme Court in the case of “Checkmate Services P. Ltd. & Ors Vs CIT & Ors” reported in 448 ITR 518, has after an sumptuous discussion vide para 4 to 20 thereof, adjudicated the issue in favour of Revenue and against the assessee, by upholding the disallowance made u/s 36(1)(va) of the Act, where ITA No.41/PAN/2021 AY : 2018-19 ITA No. 47/PAN/2021 AY : 2018-19 ITAT-Panaji Page 4 of 4 the assessee failed to deposit employee’s share or contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees as the case may be, on or before the prescribed due date under the respective Act. 8. Ld. AR appearing on behalf assessee has fairy submitted that, the subject matter of adjudication is no more res-Integra in the light of Hon’ble Supreme Court decision in “Checkmate Services P. Ltd. & Ors Vs CIT & Ors” (Supra) and following the same the co-ordinate bench adjudicated the issue in favour of revenue in ‘Sonigara Gold LLP Vs ITO (ITA No. 179/PUN/2023)’, ‘ACIT Vs SMS Ltd (ITA No. 24/NAG/2022)’, and in ‘Purushottam Kumar Agrawal Vs ACIT (ITA No. 42/RPR/2022)’. 9. Since the facts in present cases are similar to that of “M/s Kothari Agritech Pvt. Ltd. Vs ADIT, Bengaluru” (supra), in the light of Hon’ble Apex Court judgement in “Checkmate Services P. Ltd. & Ors Vs CIT & Ors” (Supra), we hold that the Ld. NFAC was justified in sustaining the adjustment carried out u/s 143(1) by CPC on account of delayed deposit of employees share to the relevant funds. Ergo we approbate the disallowance with no infirmity. 10. Resultantly, both these appeals of different assessee are DISMISSED. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Wednesday 12 th day of July, 2023. -S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 12 th day of July, 2023. आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A) NFAC, Delhi 4. The Pr. CIT, Panaji 5. DR, ITAT, Panaji Bench, Panaji 6. ग र्डफ़ इल / Guard File. Ashwini आिेश नुस र / By Order, वररष्ठ दनजी सदिव / Sr. Private Secretary आयकरअपीलीय न्य य दिकरण, पुणे / ITAT, Pune.