M/S. R M SALES AND SERVICES PRIVATE LIMITED,SATNA V. INCOME TAX OFFICER, WARD-2 , SATNA

ITA 138/JAB/2023

AI Insights

The case involves M/s. R.M. Sales and Services Pvt. Ltd., which appealed against the order of the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), pertaining to the assessment year 2019-20. The primary contention was regarding the disallowance of claims related to employee's contribution to PF and Gratuity, which the assessee argued had already been added back in the computation of total income and taxed accordingly. The Tribunal found that the lower authorities did not adequately consider the evidence and submissions provided by the assessee, leading to the decision to set aside the CIT(A)'s order and restore the matter to the AO for re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31811 (ITAT-JABALPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, LT Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARAT SHEOGANKAR
• Assessee Lawyers: SAPAN USRETHE
• Keywords: Set aside; Rectification of order
• Section: 250; 154; 143(1); 139(1); 43B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH “SMC”, JABALPUR BEFORE SHRI KUL BHARAT, VICE PRESIDENT ITA No. 138/JAB/2023 Assessment Year: 2019-20 M/s. R.M. Sales and Services Pvt. Ltd. Delha Mod, Sarla Nagar, Maihar Distt. Satna-485772 (MP). v. Income Tax Officer, Ward-2 Civil Lines, Satna - 485001. PAN:AADCR5893G (Appellant) (Respondent) Appellant by: Shri Sapan Usrethe, Adv Respondent by: Shri Bharat Sheogankar, Sr. CIT(DR) Date of hearing: 07 01 2025 Date of pronouncement: 08 01 2025 O R D E R PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) dated 21.09.2023 pertaining to the assessment year 2019-20. The assessee has raised the following grounds of appeal: - “1. That the Order passed u/s 154 of the LT Act, 1961 dated. 09.06.2021 is illegal, mvalid and bad in law. 2. That the impugned Order passed u/s 250 of the I.T. Act, 1961 on 21.08.2023 is illegal and bad in law. 3. As per the facts and in position of law, Hon’ble CIT (A) NFAC has erred in confirming the Ld. A.O.’s Order passed u/s 154 of Income Tax Act, 1961 in disallowing the claim made by the appellant aggregating to Rs 2,87,332/comprising of employee’s contribution of PF Rs 2,68,582/- and Gratuity of Rs 18,750/- by applying section 43B of LT Act, 1961. While ignoring the fact that the same have been suo-moto added back by the appellant in the computation of Total Income and paid taxes, accordingly. 4. That Ld. CIT (A) NFAC has failed to appreciate the fact from perusal of the computation of income uploaded in the ITAT Portal and also return filed by appellant w/s 139(1) of Income Tax Act, 1961 that it has suo-moto disallowed the inadmissible expenditures from P/L A/c and added back while computing total income and offered tax accordingly. ITA No.138/LKW/2023 Page 2 of 4 5. That the aggregate addition of Rs 2,87,332/- has led to be a double addition, being unwarranted and perverse, hence deserves to be deleted.” 2. The facts giving rise to the present appeal are that the assessee is a private limited company registered under the provisions of Company’s Act, 1956 involved in the business of Trading of Tyres, Tubes and spare parts. The assessee filed his return of income for A.Y. 2019-20, declaring total loss at Rs.17,90,462/- on 30.10.2019 same was processed an intimation of u/s 143(1) of the Act has been issued by the Asstt. Director of Income, CPC, Bangaluru who determined the total loss at Rs.14,38,984/-. Against which the assessee filed application seeking rectification u/s 154 of the Act. The application was rejected vide order dated 09.06.2021. Aggrieved against this, the assessee preferred appeal before Ld. CIT(A) who partly allowed the appeal of the assessee. Aggrieved the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal. 3. Apropos to the grounds of appeal, Ld. Counsel for the assessee reiterated the submission made before the Ld. CIT(A). For the sake of clarity, the submissions are reproduced as under:- “1. That the appellant is a private limited company registered under the provisions of © Company’s Act, 1956 involved in the business of Trading of Tyres, Tubes and spare parts. The assessee has maintained regular books of accounts, which are duly audited by the qualified Chartered Accountant. 2. That the appellant filed his return of income for A.Y. 2019-20, declaring total Loss at Rs 17,90,462/on 30.10.2019. 3. In case of appellant, intimation u/s 143(1) of the I.T Act, 1961, has been issued by the Asstt. Director of Income, CPC Bangaluru, determining total loss at Rs 14,38,984/against which the appellant has approached reprocessed application of rectification u/s 154 of I.T. Act, 1961 that was rejected vide rectification order passed u/s 154 of the act dated 09.06.2021. 4. The Centralized Processing Centre, Bengaluru, forwarded Order u/s 154 of the I.T Act, 1961 on 09.06.2021 computing income of the appellant by adding back a sum aggregating to Rs. 3,51,478/- comprising of employee’s contribution of PF Rs 2,68,582/-, Late Filling Fees of GST Rs 4,100/-, ITA No.138/LKW/2023 Page 3 of 4 Gratuity of Rs 18,750/-and Service Tax paid Rs 59,843/- by invoking provision of sec. 36(1)(va) of I.T Act, 1961. 5. That being aggrieved by the rectification Order passed by CPC Bengaluru u/s 154 of Income Tax Act, 1961 on 09.06.2021, the appellant has filed an appeal before CIT (A) NFAC, Delhi on 20.11.2021. 6. That Ld. CIT (A) NFAC passed the order u/s 250 of Income Tax Act, 1961 on 21.09.2023, partially allowing the appeal by deleting the addition of Rs. 63,943/- and confirming the addition made by Ld. A.O. of Rs. 18,750/- for payment of gratuity and Rs. 2,68,582/- for issue of remittance of EFP. 7. The appellant submits that the Hon’ble CIT (A) NFAC u/s 250 of LT. Act, 1961 has not justified by confirming the addition made by Ld. A.O u/s 154 of the Act on this count without appreciating the facts put forth in the written submission filed before the Ld. CIT (A) NFAC along with dire evidences in support of claim. 8. That it is evident from perusal of the computation of income uploaded in the ITAT Portal and also return filed by appellant u/s 139(1) of Income Tax Act, 1961 that it has suo-moto disallowed the inadmissible expenditures from P/L A/c and added back while computing total income and offered tax accordingly. Hence the order passed u/s 154 of I.T. Act, 1961 coherence to order passed u/s 250 of the Act, is illegal and bad in law being unwarranted and perverse.” 4. On the other hand, the Ld. Departmental Representative (DR) opposed the submission and supported the order of the Ld. CIT(A). 5. I have heard the Ld. Representatives of the parties and perused the material available on record. The grievance of the assessee is that the lower authorities i.e. Ld. CIT(A) erred in sustaining the impugned additions without appreciating the facts put forth in the written submission filed before the Ld. CIT(A. Therefore, considering the totality of the facts and the material placed before me. I am of the considered view that the authorities below ought to have considered the evidences as well as submission filed by the assessee. Therefore, considering the totality of the facts, I set aside the impugned appellate order and restore the assessment to the file of the Assessing Officer. The AO is hereby directed to consider submissions and evidences, he would verify the correctness of claim of the assessee, if, found ITA No.138/LKW/2023 Page 4 of 4 correct would give relief in accordance with law. Grounds raised by the assessee are accordingly, allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 08/01/2025. Sd/- [KUL BHARAT] VICE PRESIDENT DATED: 08/01/2025 Vijay Pal Singh, (Sr. PS) Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT (Judicial) 4. The PCIT 5. DR, ITAT, Jabalpur 6. Guard File By order // True Copy// Assistant Registrar ITAT, Jabalpur "