M/s. Shaildeep Engineering P. Ltd., Rajkot, Rajkot V. The DCIT, CPC, Bangalore, Bangalore

ITA 85/RJT/2023

AI Insights

The case involves Shaildeep Engineering P. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal was concerning the adjustments made to the income of the assessee for the Assessment Year 2019-20 under sections 143(1) and 250(6) of the Income Tax Act, 1961. The adjustments included a disallowance of deduction claimed under section 80JJA amounting to Rs.2,02,500 and a disallowance of employees' contributions to ESI and PF under section 36(1)(va) amounting to Rs.2,81,444. The Tribunal upheld the disallowance related to late deposits of ESI and PF contributions but reversed the decision on the deduction under section 80JJA, allowing it as the necessary audit report was filed during the appellate proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133697 (ITAT-RAJKOT)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 03-07-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 09-04-2023
• Other Referred Cases: Checkmate Services P. Ltd. v. CIT, G M Knitting Industries (P) Ltd. v. G M Knitting Industries (P) Ltd., Association of Indian Panel Board Manufacturer vs DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AKASH GODA
• Section: 10B; 143(1)

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, राजकोट 瀈यायपीठ 瀈यायपीठ瀈यायपीठ 瀈यायपीठ, , , , राजकोट IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No.85/RJT/2023 Assessment Year :2019-20 Shaildeep Engineering P.Ltd. C-1/38, GIDC, Aji Industrial Estate, Phase-1, Rajkot Sanosara B.O.,Jaliya Rajkot 360 003. PAN : AAECS 9245 E Vs. ADIT, CPC Delhi. अपीलाथ / (Appellant) यथ /(Respondent) Assesseeby : Shri Akash Goda, Ld.AR Revenue by : Shri B.D. Gupta, ld.Sr.DR स ु नवाई क तार ख/Date of Hearing : 04/07/2023 घोषणा क तार ख /Date of Pronouncement: 07/07/2023 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the assessee against order passed by the ld.Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi under section 250(6) of the Income Tax Act, 1961 ("the Act" for short) dated 27.12.201 pertaining to the Asst.Year 2019-20. 2. As transpires from orders of the authority below, the grievance of the assessee is vis-à-vis adjustment made to the income of the assessee in the intimation made under section 143(1) of the Act by way of disallowance of deduction claimed under section 80JJA of the Act amounting to Rs.2,02,500/- and disallowance of employees’ ITA No.85/RJT/2023 2 contribution to ESI and PF in terms of section 36(1)(va) amounting to Rs.2,81,444/-. The reasons for disallowance of deduction under section 80JJA being non-filing of necessary audit report in form No.10DA along with return of income and that for disallowance of employees’ contribution to ESI & PF being late deposit of the same with the requisite funds. 3. With respect to the addition made on account of late deposits of employees’ contribution to PF/ESI, the ld.counsel for the assessee conceded that the assessee had no case in view of the decision of the Hon’ble Apex Court in the case of Checkmate Services P. Ltd. v. CIT, (2022) 143 taxmann.com 178 as per which, even a single day’s delay would attract disallowance as per the provisions of section 36(1)(va) of the Act. Therefore, the assessee’s grievance against the order of the ld.CIT(A) upholding the adjustment made to the income of the assessee on account of addition of employees contribution to ESI/PF amounting to Rs.2,81,444/- made under section 36(1)(va) of the Act on account of delay in the deposit with the requisite funds is confirmed. 4. Vis-à-vis the aspect of disallowance of deduction claimed by the assessee under section80JJA of the Act on account of non-filing of requisite audit report along with return of income, the ld.counsel for the assessee admitted that though the same was not filed along with return of income, it was however filed during the appellate proceedings before the ld.CIT(A). He therefore stated that filing of report alongwith the return of income was only a procedural requirement, the assessee’s claim of deduction ought to have been allowed by the ld.CIT(A). He relied on the following case laws in support: ITA No.85/RJT/2023 3 The ld.DR however vehemently opposed this contention of the assessee, pointing out that the assessee’s claim would have been allowable only if the audit report had been filed in the assessment proceedings and not appellate proceedings. 5. We have heard both the parties, and we find merit in the contentions of the ld.counsel for the assessee on the issue. The issue relating to denial of deduction allowable under Chapter VIA of the Act, which includes section 80JJA of the Act, on account of non- filing of the requisite form, has been dealt by the Hon’ble Apex Court in the case of G M Knitting Industries (P) Ltd.(2016) 12 SCC 272, holding that it is a mere procedural requirement and if the same is filed during the assessment proceedings the assessee should not be denied the benefit of deduction. The appellate proceedings being continuation of the assessment proceedings, merely because the assessee filed the same during the appellate proceedings, it cannot be stated that ratio laid down by the Hon’ble Apex Court would not apply in such facts and circumstances. Even otherwise the Hon’ble Jurisdictional High Court in a recent decision in Association of Indian Panel Board Manufacturer vs DCIT in Tax Appeal No.655 of 2022 dated 21-03-2023 has, in case of exemption provisions contained in section 11/12 of the Act, requiring filing of Form 10B alongwith return of income for claiming exemption, held the requirement of furnishing of report to be a mandatory requirement while that of filing the report alongwith return of income to be a procedural requirement. In view of the same, we hold that since the assessee did file requite form for claiming deduction under section 80JJA to the first appellate authority, the assessee’s claim of deduction ought tohave been allowed by the ld.CIT(A). We, therefore, direct the AO to delete ITA No.85/RJT/2023 4 the addition made under section 143(1) of the Act and allow the assessee’s claim of deduction under section 80JJA of the Act to the tune of Rs.2,02,500/-. This ground of appeal of the assessee is allowed. 6. In the result, the appeal of the assessee is partly allowed. Order pronounced in the Court on 7 th July, 2023 at Ahmedabad. Sd/- Sd/- (T.R. SENTHIL KUMAR) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad,dated 07/07/2023 vk*