Roopkala, Ahmedabad V. The ITO, Ward-5(3)(1), Ahmedabad

ITA 64/AHD/2023

AI Insights

The case involves Roopkala Chinubhai Centre appealing against the order of the CIT(A), which pertained to the disallowance of claims under section 36(1)(va) of the Income Tax Act for the assessment years 2017-18 and 2018-19. The primary issue was the disallowance of employee's contributions to PF and ESI, which were not deposited within the prescribed due dates, although the employer's contributions were allowed. The CIT(A) had directed the AO to verify the employer's contributions, which were claimed to have been deposited before the filing of the Income Tax Return. The Tribunal dismissed the appeals, agreeing with the CIT(A)'s decision and referencing a Supreme Court judgment that supported the non-allowance of deductions for delayed deposit of employee's contributions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133634 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 30-01-2023
• Other Referred Cases: M/s. Google India Pvt. Ltd. v/s. DCIT, CPC, Bangalore (ITA No. 81/BANG/2022), Deloitte Haskins & Sells (ITA No. 539/KOL/2021)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 250

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘D’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND MISS SUCHITRA RAGHUNATH KAMBLE, JUDICIAL MEMBER ITA No.64 and 65/Ahd/2023 Assessment Year :2017-18 and 2018-19 Roopkala Chinubhai Centre Ashram Road Ahmedabad. PAN : AABFR 1549 J Vs. The ITO, Ward-5(3)(1) Ahmedabad. अपीलाथ / (Appellant) यथ /(Respondent) Assessee by : Shri S.U. Mashruwala, AR Revenue by : Shri Rajdeep Sigh, Sr.DR स ु नवाई क तार ख/Date of Hearing : 09/08/2023 घोषणा क तार ख /Date of Pronouncement: 11/08/2023 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER These are two appeals by the assessee against the order of the ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi of even dated i.e. 13-12-2022 passed under section 250(6) the Income Tax Act, 1961 pertaining to the assessment year 2016-17 and 2017-18. 6-17 raising various grounds as set out in the grounds of appeal. 2. The assessee has raised as many as five grounds in the grounds of both the appeals. However, the same are argumentative in nature, which in fact raises only one issue i.e. disallowance of claim under section 36(1)(va) of the Act for both the assessment years. The same are presented in the following manner. For the ITA No.64 & 65 /Ahd/2023 2 sake of brevity and convenience, we take the grounds raised in ITA No.64/Ahd/2023: 1. That the CIT(A) has erred in passing order u/s. 250 of the Income Tax Act by disallowing Rs.1,52,623 u/s. 36(1 )(va) under the Income Tax Act and allowing Rs.1,11,796 only under direction to A.O. to allow claim after due verification. 2. The CIT(A) has wrongly allowed Rs.1,11,796 only being contribution of employer for P.P. of Rs. 55,133 and for E.S.I, of Rs. 56,663 as per section 36(1 )(va) of the Income Tax which is paid before filing of Income Tax Return as per Sec. 43B of the Act. The Employees contribution from salary though paid after due date for P.P. Rs.1,31,867 and E.S.I. Rs.20,756 totaling to Rs.1,52,623 should also be allowed as per Sec. 43B as they are also paid before the due date of filing of Income Tax Return. 3. The CIT(A) has not commented nor considered the appellant's additional ground and prayed that the disallowance of E.S.I, and P.P. so made be deleted in toto as both the employer and employee contribution have been deposited before the due date of filing of the Income Tax Return. The appellant urges here that as payments of P.P. and E.S.I, are made before the due date of filing of the ITR the same expenses that is to say employer as well as employee contribution amounting to Rs.2,64,419 be allowed in toto. 4. The appellant relies on the decisions given by ITAT Bangalore bench in case of M/s. Google India Pvt. Ltd. v/s. DCIT, CPC, Bangalore (ITA No. 81/BANG/2022) and another decision given by ITAT Kolkatta bench in the group matter case of Deloitte Haskins & Sells (ITA No. 539/KOL/2021 decided on 7th March 2022) wherein all the contributions made for P.P. and E.S.I, are allowed as paid before filing of due date of IncomeTax Return. 5. That the appellant requests that it may be permitted to add, to alter to amend and/or to withdraw any of the Grounds of Appeal before the final hearing of the appeal.” 3. Facts in short, necessary for adjudication of this sole issue is that the assessee had claimed employees’ and employers’ contribution to PF and ESI funds totaling to Rs.2,64,419/- under section 36(1)(va) read with sections 2(24)(x) and 43B of the Act which was denied/disallowed by the AO, CPC on the ground that the assessee failed to deposit sum received from employees as contribution to any provident fund or superannuation fund within the “due date” prescribed under section 36(1(va) of the Act. When the issue agitated in first appeal, the assessee submitted that the deduction made for employees’ contribution from salary, which was ITA No.64 & 65 /Ahd/2023 3 paid after due date, totaling to Rs.1,52,623/- should only be disallowed and not the entire amount of Rs.2,64,419/- which also included employer’s contribution. The ld.CIT(A) considering the submissions of the assessee, directed the AO to verify the claim of the assessee and allow if the same was found to be correct. Not satisfied with the order of the ld.CIT(A) not allowing the claim of the assessee in entirety, the assessee has come in appeal before the Tribunal. 4. Heard both the sides, and gone through the orders of the authorities below. A perusal of the order of the ld.CIT(A) would reveal that the grievance of the assessee was that out of sum of amount of Rs.2,64,419/-, only Rs.1,52,623/- paid towards employees’ contribution should have been disallowed and not the balance amount Rs.1,11,796/- representing employer’s contribution]. Meaning thereby, the assessee’s grievance is with regard to disallowance of amount of employer’s contribution, which in fact has been addressed by the ld.CIT(A) by sending the matter back to the file of the AO for verification and thus he, allowed the appeal of the assessee for statistical purpose. This being so, we do not find any logic or merit on the part of the assessee to come before the Tribunal with the same grievance as addressed before the ld.CIT(A). Therefore, we do not find any issue for determination in the grounds raised by the assessee in its appeal, which in fact dealt with by the ld.CIT(A) and restored to the file of the AO for verification, and is pending before the AO. Even otherwise also, we find, claim of the assessee is to be decided in the light of recent verdict of the Hon’ble Supreme Court in the case of Checkmate Services P.Ltd. Vs. CIT, 143 taxmann.com178 ITA No.64 & 65 /Ahd/2023 4 (SC) holding that deduction under section 36(1)(va) in respect of delayed deposit of amount collected from employee’s contribution to PF cannot be allowed as deduction. In view of the above, grounds raised in both the appeals being identical, are rejected. 5. In the result, appeals of the assessee are dismissed. Order pronounced in the Court on 11 th August, 2023 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad,dated 11/08/2023