M/S S. K. INTERNATIONAL,MUMBAI V. DCIT 17(1), MUMBAI

MA 26/MUM/2024

AI Insights

The case revolves around a dispute concerning the disallowance of deductions claimed by S.K. International for employee contributions to PF and ESIC. Initially, the Tribunal had decided in favor of the assessee, allowing the deductions. However, following a Miscellaneous Application by the Revenue, the order was recalled, and the appeal was dismissed, leading to the current Miscellaneous Application by the assessee. The Tribunal, after reviewing the submissions and the payments made, directed the Assessing Officer to allow the deductions for the amounts paid before the due dates, citing precedents and the specific provisions of the Income Tax Act.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26499 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-03-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 05-02-2024
• Other Referred Cases: Kalpesh Synthetics Pvt. Ltd. vs. DCIT, Checkmate Services Pvt. Ltd. vs. CIT, Beghar Foundation vs. Justice K.S. Puttaswamy
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H.M. BHATT
• Assessee Lawyers: BHUPENDRA SHAH
• Section: 143(3); 143(1); 254(2); 139(1); 2; 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GAGAN GOYAL, ACCOUNTANT MEMBER MA No.26/Mum/2024 (Arising out of ITA No.1251/Mum/2022) (Assessment Year :2019-20) S.K. International SK House, 94-A, Aval Baug, DSP Road Dadar (E) Mumbai-400 014 Vs. DCIT-17(1), Mumbai 117, Kautilya Bhawan BKC, Bandra East Mumbai – 400 051 PAN/GIR No.AAMFS2232C (Appellant) .. (Respondent) Assessee by Shri Bhupendra Shah Revenue by Shri H.M. Bhatt Date of Hearing 08/03/2024 Date of Pronouncement 01/11/2024 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid Miscellaneous Application has been filed by the assessee against order dated 03/01/2024 in ITA No.1251/Mum/2022. 2. In the Miscellaneous Application, the applicant assessee has stated as under:- 1. The Appellant had filed Return of Income u/s. 139(1) of the Income Tax Act, 1961 (the Act) declaring Total income of MA Nos.26/Mum/2024 S.K.International 2 Rs.17,24,06,560/- The Return of Income has been processed by CPC, Bengaluru and Order has been passed u/s. 143(1) computing the Total Income of Rs. 17,37,70,657/-. As per the Order passed, there is a disallowance of deduction of payment of employees contribution to PF and ESIC of Rs. 13,64,096/ claimed under section 36(1)(va) of the Act on the alleged ground of payment after due dates. The Appellant has obtained Tax Audit Report u/s.44AB(a) of the Act and submitted online. Out of the said amount of disallowance of Rs.13,64,096/-, aggregate payments of Rs. 13,54,755/- (PF Rs. 11,89,400 + ESIC Rs. 1,65,355) to the Employees Account in the relevant funds have been made on or before the due date specified under the respective Acts of PF and ESIC and the balance amount of Rs. 9,341/- (PF Rs. 600+ ESIC Rs. 8,741) have been paid after the due dates of the respective Acts of PF and ESIC, but before the due date of filing of Return of Income u/s. 139(1) of the Act. 2. The Appellant has made aggregate payments of Rs. 13,54,755/- (11,89,400 + 1,65,355) to the Employees Account in the relevant funds on or before the due date specified under the respective Acts of PF and ESIC. The relevant particulars are as under: Month Sum received from employees towards contribution to Due date for payment to the prescribed Statutory Authorities Actual date of payment to the Statutory Authorities Actual amount paid P,F. Rs. E.S.I.C. Rs. P.F. E.S.I.C. P.F. Rs. E.S.I.C. Rs. Apr., 20 18 95160 13024 15.05.2018 11,05,2018 11,05.2018 95160 13024 May., 2018 94200 13273 15.06.2018 15.06.2018 14.06.2018 94200 4532 Jun.,2018 95430 13453 15.07.2018 13.07.2018 13.07.2018 95430 13453 Jul.,2018 94280 13459 15.08,2018 10.08.2018 10.08.2018 94280 13459 Aug., 20 18 94590 13377 15.09.2018 11.09.2018 11.09.2018 94590 13377 MA Nos.26/Mum/2024 S.K.International 3 Sept., 20 18 92460 13476 15.10.2018 12.10.2018 11.10.2018 91860 13476 Oct., 2018 94950 14305 15.11.2018 15.11,2018 14,11,2018 13.11.2018 15.11.2018 94950 10176 2383 1746 Nov., 2018 97880 14695 15.12.2018 14.12.2018 14.12.2018 15.12.2018 97880 14333 362 Dec. ,2018 103100 15355 15.01,2019 14.01.2019 14.01.2019 103100 15355 Jan., 2019 108810 16237 15.02.2019 14.02.2019 14.02.2019 108810 16237 Feb., 2019 109570 16285 15.03.2019 15.03.2019 109570 16285 Mar., 20 19 112660 17157 15.04.2019 15.04.2019 112660 17157 1193090 174096 1 92490* 165355 *Include Rs. 3090/- not subject to disallowance 3. As per the Tax Audit Report submitted online, the due date of payment of PF & ESIC and the actual dates of payments have been stated. Further, the above facts have also been stated in the written submissions to the Ld. CIT(A) NFAC, relating to the grounds of appeal raised in Sr. No. 1 and 2. Decisions of the Hon'ble ITAT: 1. The Hon'ble ITAT, \"D\" Bench, Mumbai passed an order dated 29.06.2022 in the case of the Appellant (Case No. ITA No. 1251/Mum/2022 for A.Y. 2019-20) allowing the Appeal relying on the decision of the Hon'ble Tribunal Mumbai in the case of Kalpesh Synthetics Pvt. Ltd. vs. DCIT [(2022)] 137 taxmann.com 475 (Mum - Trib)] wherein the Hon'ble Tribunal has referred and relied upon various decisions of the Hon'ble Jurisdictional High Courts and other Hon'ble High Courts 2. The Hon'ble ITAT, \"D\" Bench, Mumbai has passed Order (MA No. 448/Mum/2022) dated 3 January, 2024 arising out of Order No.: ITA No. 1251/Mum/2022 relying on the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. vs. CIT 448 ITR 518, Beghar Foundation vs. Justice K.S. Puttaswamy (2021)] 123 taxmann.com 344 dated 11/11/2021 MA Nos.26/Mum/2024 S.K.International 4 As per the said Order passed by the Hon'ble ITAT, the Order of the Hon'ble Tribunal (ITA No 1251/Mum/2022 for A.Y 2019-20) dated 29.06.2022 has been recalled and the appeal of the Appellant has been dismissed. Grounds for Filing Miscellaneous Application u/s. 254(2) of the Act: 1. As per the provisions of Section 36(1)(va) of the Act and the facts on the record, the Appellant is entitled to a deduction of the aggregate payments of Rs. 13,54,755/- (PF Rs. 11,89,400+ ESIC Rs. 1,65,355) to the Employees Account in the relevant funds made on or before the due dates specified under the respective Acts of PF and ESIC. The relevant part of the Section is reproduced: “36(1)(va) any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date\" 2 As per the Order passed by the Hon'ble ITAT, \"D\" Bench, Mumbai (MA No. 448/Mum/2022) dated 3 January, 2024, the Miscellaneous Application filed by the Revenue has been allowed and the appeal of the Appellant has been dismissed. Consequently the disallowance of the aggregate payment of PF and ESIC of Rs. 13,64,096/- (PF Rs. 11,90,000 + ESIC Rs. 1,74,096) as per the Order / Intimation passed u/s 143(3) of the Act is upheld. 3. As per the facts on the record, the total disallowance of Rs. 13,64,096/- (11,90,000 + 1,74,096), include the aggregate payment of Rs.13,54,755/- (11,89,400 + 1,65,355) to the Employees Account in the relevant funds on or before the due date specified under the respective Acts of PF and ESIC which otherwise is allowable as deductions as per the provisions of Section 36(1)(va) of the Act. MA Nos.26/Mum/2024 S.K.International 5 Prayer In view of the above, it is humbly prayed before the Hon'ble ITAT to recall Order (MA No. 448/Mum/2022) dated 3 January, 2024 arising out of Order No.: ITA No. 1251/Mum/2022 and allow the deduction of the aggregate payment of Rs. 13,54,755/- (11,89,400+ 1,65,355) to the Employees Account in the relevant funds on or before the due date. 3. Here in this case earlier the Tribunal has decided the issue of disallowance u/s.36(1)(va) in favour of the assessee however, later on in the Miscellaneous Application filed by the Revenue the order was recalled and appeal of the assessee was dismissed. However, it has been pointed out that however, total disallowance of Rs.13,64,096/- same includes amount of Rs.13,54,755/- (11,89,400 + 1,65,355) to the employees account in the relevant funds on or before the due date specified under the respective Acts as noted in the table incorporated above. Thus, we accept the contention raised in the Miscellaneous Application that to the extent amount of PF & ESIC which has been paid before the due date, same cannot be disallowed and accordingly, ld. AO is directed to allow the PF and ESIC which has been paid on or before the due date. Accordingly, Miscellaneous Application filed by the assessee is allowed. MA Nos.26/Mum/2024 S.K.International 6 4. In the result, Miscellaneous Application filed by the assessee is allowed. Order pronounced on 1st November, 2024. Sd/- (GAGAN GOYAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 01/11/2024 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "