Kreem Foods Private Limited, Alappuzha V. The DCIT Corporate Circle, Alappuzha, Alappuzha

ITA 573/COCH/2022

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 1204 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Appeal Filed On: 03-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Chandra Poojari, AM & Shri George George K, JM ITA No.573/Coch/2022 : Asst.Year 2020-2021 M/s.Kreem Foods Private Limited XIV, Chemical Industrial Estate Alleppy – 688 534. PAN : AAACK8728L. v. The Assistant Director of Income-tax, CPC Bangalore. (Appellant) (Respondent) Appellant by : Sri.V.M.Veeramani, CA Respondent by : Smt.J.M.Jammuna Devi, Sr.DR Date of Hearing : 01.08.2022 Date of Pronouncement : 01.08.2022 O R D E R Per George George K, JM : This appeal at the instance of the assessee is directed against CIT(A)’s order dated 13.04.2022. The relevant assessment year is 2020-2021. 2. The grounds raised read as follows: “1. The Order of the intimation of CPC is against law. 2. NFAC is not correct in confirming the order of CPC making prima adjustments are made u/s 143(1)(a) of the Act while processing the return of income and disallowing belated payment of employee contribution of Rs.48,182 for the month of May 2020 which was paid on 27.6.2020. CPC is entitled to make prima adjustment of only those items enumerated under clause (i) to (vi) of section 143(1)(a) and disallowance of belated payment of employee contribution of ESI is not among the prima adjustments. The claim of the appellant is supported by various decision of the High Court / Supreme Court. Hence the action of the CPC is beyond the powers granted u/s 143(1) of the Act. We rely on the decision of ITAT ITA No.573/Coch/2022. M/s.Kreem Foods Private Limited. 2 Delhi Bench in the case of Maksat Technologies Private Ltd. v. DCIT (191 ITD 175). 3. NFAC failed to follow the decision of the jurisdictional ITAT decision on the same point where it was held that CPC was not correct in making prima facie adjustment in respect of a debatable issue. The ITAT had held that since there was an earlier decision of the Kerala High Court in favour of the assessee and later decision of Merchem Ltd. was without considering the earlier decision and when there are decisions of the same High Court both in favour and against the assessee, the issue is debatable and hence cannot be considered for prima facie adjustment under section 143(1) while processing the return of income.” 3. The brief facts of the case are as follows: The assessee is a private company. For the assessment year 2020-2021, the return of income was filed declaring total loss of Rs.10,69,55,184. The CPC processed the return u/s 143(1) of the I.T.Act. The CPC in the intimation u/s 143(1) of the I.T.Act, disallowed sum of Rs.1,83,042 on account of delayed remittance of employees’ contribution to PF and ESI. 4. Aggrieved, the assessee filed appeal before the first appellate authority. The CIT(A) by placing reliance on the judgment of the Hon’ble jurisdictional High Court in the case of Popular Vehicles & Services Private Limited v. CIT reported in (2018) 406 ITR 150 affirmed the disallowance made u/s 143(1) of the I.T.Act. 5. Aggrieved by the order of the CIT(A), the assessee has filed appeal before the Tribunal. The learned AR, apart from relying on the grounds, had raised an alternate plea that payments have been made within the extended due date under the respective Acts. In this context, the learned AR had ITA No.573/Coch/2022. M/s.Kreem Foods Private Limited. 3 detailed the extended due dates for making payment under the respective Act, actual date of payments by assessee, etc. 6. The learned Departmental Representative relied on the order of the CIT(A). 7. We have heard rival submissions and perused the material on record. The assessee had claimed deduction for delayed remittance of employees’ contribution to PF and ESI stating that the same has been deposited before the due date of filing the return u/s 139(1) of the I.T.Act. The Hon’ble jurisdictional High Court in the case of Popular Vehicle & Services Pvt. Ltd. v. CIT (supra) had clearly held that employees’ share of PF and ESI, which was not deposited within the due date under the respective Acts is not an allowable deduction u/s 36(1)(va) of the I.T.Act. The relevant finding of the Hon’ble Kerala High Court has been elaborately extracted at para 5 of the impugned order of the CIT(A), hence, the same is not reproduced here. In view of the judgment of the Hon’ble jurisdictional High Court, cited supra, we hold that adjustment made u/s 143(1) of the I.T.Act is correct and in accordance with law. Therefore, by following the judgment of the Hon’ble jurisdictional High Court in the case of Popular Vehicle & Services Pvt. Ltd. v. CIT (supra), we hold that the employees’ contribution to PF and ESI not deposited within the due date specified in the relevant Acts cannot be allowed as a deduction u/s 36(1)(va) of the I.T.Act. ITA No.573/Coch/2022. M/s.Kreem Foods Private Limited. 4 8. Alternatively, the assessee has raised the contention that the assessee had made payment within the extended due date. It was stated that due to Covid National lockdown from 23 rd March, 2020, EPFO had issued Notification extending the due date for making payments under the respective Acts. The details of the extended due date and the actual date of payment, according to the assessee, are as follows:- Branch Employee contribution Due date of payment Actual date of payment Remarks Aroor 5,357 15.05.2020 06.05.2020 Paid within extended due date Bangalore 3,522 15.05.2020 15.04.2020 Paid within due date Hyderabad 9,170 15.05.2020 15.04.2020 Paid within due date Aluva 4,290 15.05.2020 15.05.2020 Paid within extended due date Perinthalmanna 12,172 15.05.2020 12.05.2020 Paid within extended due date Paruthikuzhy 6,137 15.05.2020 27.06.2020 Chennai 7,534 15.05.2020 15.05.2020 Paid within extended due date 48,182 9. According to the above table, only with regard to the Paruthikuzhy Branch an amount of Rs.6,137 is paid after the extended due date. This issue was not raised before any of the authorities below. Therefore, the matter is restored to the A.O. The A.O. shall examine the alternative claim of the assessee and shall take a decision in accordance with law. It is ordered accordingly. ITA No.573/Coch/2022. M/s.Kreem Foods Private Limited. 5 10. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced on this 01 st day of August, 2022. Sd/- (Chandra Poojari) Sd/- (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER Kochi ; Dated : 01 st August, 2022. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)-NFAC, Delhi. 4. The CIT, Cochin. 5. The DR, ITAT, Cochin. 6. Guard File. Asst.Registrar/ITAT, Cochin