BALAJEE CONSTRUCTION AND REAL ESTATE, GUWAHATI V. INCOME TAX OFFICER-W-1(2), GUWAHATI

ITA 6/GTY/2024

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 1358 (ITAT-GUWAHATI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 08-01-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 154; 143(1); 48; 43B

Judgement Text

आयकर अपीलीय अिधकरण ग ु वाहाटी पीठ , कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH AT KOLKATA [वच ु र् अल कोट र् ] [Virtual Court] श्री मनमोहन दास, न्याियक सदस्य एवं श्री संजय अवस्थी, ल े खा सदस्य क े सम� Before SRI MANOMOHAN DAS, JUDICIAL MEMBER & SRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No.: 6/GTY/2024 Assessment Year: 2017-18 Balajee Construction and Real Estate......................................Appellant [PAN: AANFB 4074 G] Vs. ITO, Ward-1(2), Guwahati.....................................................Respondent Appearances: Assessee represented by: S.P. Bhati, FCA. Department represented by: Kausik Ray, JCIT. Date of concluding the hearing : August 8 th , 2024 Date of pronouncing the order : September 4 th , 2024 ORDER Per Sanjay Awasthi, Accountant Member: In this case, some disallowances have been made in the case of the appellant at the stage of processing by CPC, Bangalore u/s 143(1)(a) of the Income Tax Act, 1961 (in short the 'Act'). Thereafter, the appellant filed a rectification application u/s 154 of the Act which was, on the issues before us, rejected vide order dated 03.04.2021. Aggrieved with this action of CPC, Bangalore the appellant approached the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as ld. 'CIT(A)'] who vide order dated 16.11.2023 dismissed the appeal pertaining to disallowances u/s 43B I.T.A. No.: 6/GTY/2024 Assessment Year: 2017-18 Balajee Construction and Real Estate. Page 2 of 4 & 36(1)(va) of the Act. While for the disallowance u/s 43B of the Act, ld. CIT(A) held that the appellant did not present any challan showing that the requisite amount had been paid before the due date and for the disallowance on account of PF & ESI (u/s 36(1)(va) of the Act) reliance was placed on an information given in tabular form by the appellant in which it was allegedly shown that some amounts were deposited after the due date of the respective Act. Thereafter, ld. CIT(A) relied on the case of Checkmate Services (P.) Ltd. vs. CIT reported in [2022] 448 ITR 518 (SC) to deny any relief. Aggrieved with this action, the appellant is before us through the following grounds of appeal: “1. The learned CIT (A), erred in law in confirming the action of CPC in making adjustments in the returned income which are not permissible under section 143(1), of the Act and thereby determined the total income- Rs. 1,18,20,507/-as against the returned income at Rs. 80,88,198/-, in the rectification order dated 03.04.2021 issued under section 154 of the ACT, without appreciating the facts and circumstances of the case. 2. For that the Learned CIT (Appeals) is not justified in upholding the addition of Rs.18,90,213/- on account of non-payment of service tax liability u/s 43B on the ground that the appellant has not submitted any supporting documents as evidence of such payment despite the fact that the appellant duly submitted the copy of the tax payment challan before the CIT(A). 3. Fort that the Learned CIT(A) erred in upholding the disallowance of Rs. 17,84,089/- made by CPC, under section 36(1)(va) of the Act on account of delayed payment on account of employees contribution towards provident fund and ESIC of employees, without appreciating that the same is not permissible adjustment under section 143(1) of the Act. 4. The Appellant craves the leave to take Additional Grounds and/or withdraw or modify the above grounds at the time of hearing of Appeal.” 2. Before us, the appellant has relied on certain orders of Coordinate Bench of ITAT, Mumbai and vehemently argued that regarding the provisions of Section 43B of the Act he should be allowed relief since the necessary payments were made before the due date and ld. CIT(A) disregarded the evidences placed before him in this regard. Regarding the disallowance u/s 36(1)(va) of the Act, it has been averred that the case of Checkmate Services (P.) Ltd. (supra) would apply when the matter would be dealt u/s 143(3) of the Act and would not apply when it was being dealt u/s 143(1)(a) of the Act. In any case it has been averred that the ld. CIT(A) has not duly noted the factual I.T.A. No.: 6/GTY/2024 Assessment Year: 2017-18 Balajee Construction and Real Estate. Page 3 of 4 position regarding payments made within the due date and has dismissed the appeal on this ground altogether. 2.1. The ld. D/R on the other hand, read out para 7.2 & 7.3 from the impugned order to demonstrate that the action of ld. CIT(A) was in consonance with the law laid down in the case of Checkmate Services (P.) Ltd. (supra). 3. We have considered the rival submissions and gone through the documents filed through a paperbook before us. Regarding the disallowance u/s 43B of the Act amounting to Rs. 18,90,213/-, it appears from the records that actually the necessary payments have been made before the due date of filing of return. However, since the ld. CIT(A) has not considered the documents placed before him, it would be in the fitness of things to direct him to consider the challans etc., as available with the appellant, and grant relief in case the necessary payments have been made within the due date of filing of return of income. 3.1. Regarding the disallowance of Rs. 17,84,089/- u/s 36(1)(va) of the Act we are unable to agree with the ld. A/R that the treatment given to the disallowance would differ in case it is being done u/s 143(1)(a) of the Act as compared to any treatment possible u/s 143(3) of the Act. In this regard, the relevant portions from the case of Rohan Korgaonkar vs. DCIT reported in [2024] 298 Taxman 159 (Bombay) deserves to be extracted as under: “Checkmate Services Pvt. Ltd. v. CIT [2022] 143 taxmann.com 178/290 Taxman 19/448 ITR 518 (SC) holds that the deductions can be claimed or adjustments can be made under section 141(1)(a)(iv), read with section 36(1)(va) only when the employer deposits the contributions in the employees' accounts on or before the due date prescribed under the Employees Provident Fund/Employees State Insurance Act. In this case, admittedly, the contributions were deposited in the employees' accounts beyond the due date. The circumstance that the assessment order was made under section 143(1)(a) can make no difference. [Para 8]” (emphasis added). 3.2. It is clear that the case of Checkmate Services (P.) Ltd. (supra) would invariably apply even in cases of processing u/s 143(1)(a) of the Act. Similarly, in the case of Diversified Services vs. ITO reported in [2023] 293 Taxman 48 I.T.A. No.: 6/GTY/2024 Assessment Year: 2017-18 Balajee Construction and Real Estate. Page 4 of 4 (Gujarat) the whole issue whether any disallowance could be made u/s 36(1)(va) of the Act was held in favour of the Revenue following the case of Checkmate Services (P.) Ltd. (supra) even when it was u/s 143(1)(a) of the Act that the said disallowances had been made. Furthermore, a similar finding has been given, regarding disallowance u/s 143(1)(a) of the Act, for amounts to be considered u/s 36(1)(va) of the Act in the case of BPS Infrastructure vs. ITO reported in [2024] 164 taxmann.com 270 (Chhattisgarh). Accordingly, there is no hesitation in holding that in principle, the disallowance u/s 36(1)(va) of the Act can and should be made u/s 143(1)(a) of the Act in case the necessary payments have not been made within the due date prescribed under the Employees’ Provident Fund/Employees’ State Insurance Act. However, here also the ld. CIT(A) is directed to grant relief, if any due, in case any quantum of payment has been made within the due date as mentioned in the respective Acts for allowing such deductions here. 4. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 4 th September, 2024 under Rule 34 of the Income Tax Appellate Tribunal Rule, 1963. Sd/- Sd/- [Manomohan Das] [Sanjay Awasthi] Judicial Member Accountant Member Dated: 04.09.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. Balajee Construction and Real Estate, H/o Amit Agarwalla, Kedar Road, Near Hotel Rituraj, Guwahati, Assam, 781001. 2. ITO, Ward-1(2), Guwahati. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Guwahati Bench, Guwahati. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata