BRISK INDIA PVT LTD, Pune V. Deputy Commissioner of Income Tax, Circle-1(1), Pune, Pune

ITA 515/PUN/2023

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Brisk India Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals)-11, Pune, which confirmed the disallowance made by the Central Processing Center, Bangalore, regarding deductions for employee contributions to PF/ESIC and a deduction under section 80JJAA for the assessment year 2019-20. The Tribunal examined the compliance with statutory due dates for depositing employee contributions and the timing of filing the income tax return. The Tribunal referenced the Supreme Court's decision in Checkmate Services P. Ltd., which clarified that deductions for employee contributions are only allowable if the contributions are deposited within the statutory due dates. Additionally, the Tribunal found that the assessee's return was filed beyond the extended due date, thus disallowing the deduction under section 80JJAA as well.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132836 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-07-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 27-04-2023
• Other Referred Cases: Checkmate Services P. Ltd. in Civil Appeal No. 2833 of 2016, Finolex Industries Ltd. Employee's Co-op. Credit Society Ltd. in ITA No. 76/PUN/2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 132; 139; 153A; 143(1); 80P; 139(1)

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.515/PUN/2023 निर्धारण वर्ा / Assessment Year : 2019-20 Brisk India Pvt. Ltd., 4 th Floor, 403, Western Court Building d, Bhamburda, Shivaji Nagar, Pune – 411016 PAN : AADCB7000M .......अपीलधर्थी / Appellant बिधम / V/s. DCIT, Central Circle – 1(1), Pune ......प्रत्यर्थी / Respondent Assessee by : Shri Nikhil S. Pathak Revenue by : Shri Keyur Patel सुिवधई की तधरीख / Date of Hearing : 19-07-2023 घोर्णध की तधरीख / Date of Pronouncement : 26-09-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 28-02-2023 passed by the Commissioner of Income Tax (Appeals)-11, Pune [‘CIT(A)’] for assessment year 2019-20. 2. Ground No. 1 raised by the assessee is general in nature, hence, requires no adjudication. 2 ITA No.515/PUN/2023, A.Y. 2019-20 3. Ground Nos. 2 to 4 raised by the assessee challenging the action of CIT(A) in confirming the addition disallowance by the CPC u/s. 36(1)(va) of the Act. 4. Heard both the parties and perused the material available on record. We note that the assessee is a company filed return of income on 01-02- 2020. The CPC, Bangalore disallowed an amount of Rs.5,80,68,573/- for not depositing the employee’s contribution of PF/ESIC before prescribed due dates under the respective Act. Having aggrieved, the assessee preferred an appeal before the CIT(A). The assessee contended that the assessee is entitled to claim deduction if the employee’s contribution is paid before due dates of filing return of income. The CIT(A) on an examination of Tax Audit Report held that the assessee did not deposit an amount of Rs.5,80,68,573/- which is employee’s contribution towards PF/ESIC before the due date under the respective Act and confirmed the disallowance made by the CPC, Bangalore for delay in depositing the said employee’s contribution before due dates concerning the relevant Act. The ld. DR placed on record the decision of Hon’ble Supreme Court in batch of the appeals, lead case being Checkmate Services P. Ltd. in Civil Appeal No. 2833 of 2016 and submitted that the assessee is not entitled to claim deduction if the employee’s contribution is not paid within due dates of respective statutes. On careful reading of the said decision of Hon’ble Supreme Court held that Section 2(24)(x) deems amount received from the employees as income and the amounts retained by the employer from out of the employee’s income by way of deduction etc. were treated as income in the hands of the employer (assessee). Further, it held unless the conditions spelt by Explanation to section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or 3 ITA No.515/PUN/2023, A.Y. 2019-20 before the due date of respective statutes, the assessee is not entitled to claim benefit of deduction from the total income. Therefore, in our opinion, essential condition for claiming such deduction if such amounts are deposited on or before due date of respective statutes. It is evident from the impugned order that the assessee deposited the employee’s contribution to PF/ESI after the prescribed due date of relevant Act which is not disputed by the ld. AR. Therefore, following the decision of Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. (supra) we find no infirmity in the order of CIT(A) in holding the assessee is not entitled to claim deduction for its failure to deposit employee’s contribution before due date prescribed under the relevant statutes. Thus, the grounds Nos. 2 to 4 raised by the assessee are dismissed. 5. The ld. AR drew our attention to the two additional grounds of appeal challenging the action of CIT(A) in confirming the disallowance made by the CPC, Bangalore u/s. 143(1) of the Act on account of deduction u/s. 80JJAA of the Act in the facts and circumstances of the case. 6. We note that the assessee claimed deduction u/s. 80JJAA of the Act under Part-C Chapter-VIA of the Act. The CPC, Bangalore denied the said deduction for not filing return of income within due date specified u/s. 139(1) of the Act. The same was challenged before the CIT(A) and through para 18 of the impugned order, the CIT(A) confirmed the disallowance made by the CPC, Bangalore by recording reasons. The ld. AR placed on record order of this Tribunal in the case of Finolex Industries Ltd. Employee’s Co-op. Credit Society Ltd. in ITA No. 76/PUN/2023 for A.Y. 2019-20 and argued that the deduction of section 80P was included in 4 ITA No.515/PUN/2023, A.Y. 2019-20 Clause-v of section 143(1)(a) of the Act by Finance Act, 2021 and the disallowance confirmed by the CIT(A) is not justified as the deduction u/s. 80JJAA of the Act is similar to the deduction u/s. 80P of the Act. The ld. DR relied on the order of CIT(A). In the present case, the assessee claimed deduction under the provisions of Chapter-VIA under the heading “C- Deductions in respect of certain incomes” and the disallowance warrants u/s. 143(1)(a)(v) of the Act if the return of income filed beyond the due date provided under sub-section (1) of section 139 of the Act. Admittedly, the assessee filed return of income on 01-02-2020 and the due date for filing original return of income u/s. 139(1) of the Act is 30-09-2019, further, the said due date is extended up to 31-10-2019 which is evident from the intimation passed u/s. 143(1) of the Act by the CPC, Bangalore. Before the CIT(A), it was contended that the assessee is not required to file return of income u/s. 139(1) of the Act as the assessee was subjected to search. It is noted from the statement of facts filed before the CIT(A), a search and seizure action u/s. 132 of the Act was carried out on 25-07-2019 and the CIT(A) held that the said contention is incorrect as there is no provision in the Act that the assessee is not required to file return of income u/s. 139 of the Act after search, can only file return u/s. 153A of the Act. We note that a search was on 25-07-2019 i.e. well before the time limit provided i.e. 30-09-2019 and further, said due date is extended up to 31-10-2019, but however, the assessee preferred to file return of income on 01-02-2020 under the provisions u/s. 139 of the Act, but not under specified due date provided under sub-section (1) of section 139 of the Act. Therefore, in our opinion, the order of CIT(A) is justified. 7. Coming to the order of this Tribunal in the case of Finolex Industries Ltd. Employee’s Co-op. Credit Society Ltd. (supra), wherein, it was held 5 ITA No.515/PUN/2023, A.Y. 2019-20 that section 143(1)(a)(v) of the Act spells out that if any deduction is claimed under any of the provisions Chapter-VIA which include deduction u/s. 80P of the Act such deduction has to be allowed only if the return is filed within due date specified u/s. 139(1) of the Act. In other words, if any return is filed beyond due date u/s. 139(1) of the Act then no deduction u/s. 80P of the Act shall be allowed. Since, the Clause-v of section 143(1)(a) was inserted by the Finance Act, 2021 w.e.f. 01-04-2021 and the assessment year being 2019-20, therein, held section 143(1)(a)(v) of the Act is not applicable, since, deduction u/s. 80P of the Act is included under Clause-v of section 143(1)(a) of the Act w.e.f. 01-04-2021. The deduction claimed by the assessee in the present case is u/s. 80JJAA of the Act which falls under deduction under the heading “C-Deductions in respect of certain incomes” under Chapter- VIA which could be allowed only on furnishing the return of income within due date specified u/s. 139(1) of the Act. We note that the Clause-v of section 143(1)(a) of the Act provides disallowance of deduction claimed under any provision of Chapter-VIA under the heading “C-Deductions in respect of certain incomes” if the return is furnished beyond the due date specified under sub-section (1) of section 139 of the Act. As we discussed above, it is evident that the assessee did not file return of income within extended due date i.e. 31-10-2019 which is the specified time u/s. 139(1) of the Act is evident from intimation u/s. 143(1) of the Act passed by the CPC, Bangalore. Therefore, the order of this Tribunal in the case of Finolex Industries Ltd. Employee’s Co-op. Credit Society Ltd. (supra) is not applicable and we agree with the reasons recorded by the CIT(A) from paras 18 to 21 of the impugned order, are justified in confirming the disallowance made by the CPC, Bangalore. Thus, we find no infirmity in the order of CIT(A) and the additional grounds Nos. 1 and 2 raised by the assessee are dismissed. 6 ITA No.515/PUN/2023, A.Y. 2019-20 8. In view of our decision in additional grounds Nos. 1 and 2, the original grounds Nos. 5 and 5.1 becomes academic, requiring no adjudication. 9. In the result, the appeal of assessee is dismissed. Order pronounced in the open court on 26 th September, 2023. Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 26 th September, 2023. रदि आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A)-11, Pune. 4. The Pr. CIT (Central), Pune. 5. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune