MEHARA EYETECH PVT LTD, MUMBAI V. ASSTT COMMISSIONER OF INCOME TAX, CIRCLE 1(3)(1), MUMBAI

MA 483/MUM/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0733 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 05-10-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 26-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN, AM AND SHRI ABY T. VARKEY, JM MA. No. 483/Mum/2023 (Arising out of ITA. No.1684/Mum/2022 (निर्धारण वर्ा / Assessment Year: 2020-21) M/s.Mehara Eyetech – Pvt. Ltd., B-801, Lotus Corporate Park Off, Western Express High Way, Mumbai-400 063. बिधम/ Vs. The ACIT, Circle-1(3)(1), Mumbai. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AAACU2684H (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) सुनवाई की तारीख / Date of Hearing: 06/10/2023 घोषणा की तारीख /Date of Pronouncement: 17/10/2023 आदेश / O R D E R PER ABY T. VARKEY, JM: This Miscellaneous Application has been preferred by the assessee against the impugned order of this Tribunal dated 31.05.2023 for AY 2020-21. It is noted that in the second round before us this Tribunal had dismissed the appeal of the assessee vide order dated 31.05.2023, wherein, this Tribunal upheld the addition confirmed by the Ld.CIT(A), and in that process upheld the intimation order made by the CPC u/s.143(1) of the Income Tax Act (hereinafter ‘the Act’) which made an adjustment to the tune of Rs.9,15,520/- u/s.36(1)(va) r.w.s.2(24)(x) of the Act, for late deposit of employees contribution to PF & ESIC being beyond the due date as prescribed in the specified Assessee by: Shri N. R. Agrawal Revenue by: Shri Ashok Kumar Ambastha (Sr. DR) MA. No. 483/Mum/2023 A.Y. 2020-21 M/s. Mehara Eyetech Pvt. Ltd. 2 Act (PF & ESIC Act). And for such an action the Tribunal relied on the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. V. CIT reported in 448 ITR 518, wherein, the Hon’ble Supreme Court held that for allowing the deduction such amounts (employee's contribution to PF/ESIC) are deposited within the due date as prescribed in the specified Act in the relevant funds. And if the employer/assessee fails to deposit the amount towards employee's contribution on or before the due date as prescribed under the EPF/ESIC Act, the assessee was not entitled to the deduction. Thus it was held in the impugned order of Tribunal (in the second round) that unless the assessee is able to show that it has deposited the employee's contribution towards PF/ESIC in the relevant fund within the due date as prescribed in the respective PF/ESIC Act, disallowance u/s.36(1)(va) of the Act as made by AO/Ld. CIT(A) need to be confirmed in accordance with the decision of Hon'ble Supreme Court in the case Checkmate Services Pvt. Ltd. Vs. CIT (supra) and Tribunal confirmed the action of CPC adding Rs.9,15,520/-. Aggrieved by the action of the Tribunal, the assessee has preferred this MA with a prayer to rectify mistake apparent on the face of the record. MA. No. 483/Mum/2023 A.Y. 2020-21 M/s. Mehara Eyetech Pvt. Ltd. 3 2. The Ld. AR of the assessee brought to our notice that while the appeal was heard (during the second round on 26.05.2023) out of the total adjustment made by CPC at Rs.9,15,520/-, the late deposit of employee’s contribution to PF/ESIC beyond the due date as prescribed in the Act (PF & ESIC) was only to the tune of Rs.12,584/- and not Rs.9,15,520/- as has been made by the CPC and confirmed by the Ld.CIT(A) and this Tribunal vide impugned order dated 31.05.2023. The Ld.AR also brought to our notice about subsequent development which took place in assessee’s case wherein on 29.09.2023, the AO/DCIT, Cicle-4(3)(1), Mumbai, has passed the assessment order u/s.143(3) of the Act, wherein, he has adjudicated this precise issue afore-stated as under:- “5. Disallowance of Provident Fund and any other welfare fund u/s.36(1)(va): On perusal of Form No-3CA, it is observed that the contributions received from employees of Rs.12,584/- have been deposited after the specified due dates. Considering the recent judgment of Hon'ble Supreme Court in the case of Checkmate Services P Ltd., the contribution deposited after due date is disallowable and hence same is disallowed and added back to the total income of the assessee.” 3. In the light of the fact that the Ld. AR of assessee Shri N.R.Agrawal, on the date of hearing of this appeal (second round) on MA. No. 483/Mum/2023 A.Y. 2020-21 M/s. Mehara Eyetech Pvt. Ltd. 4 26.05.2023 had brought to our notice that the late deposit of employee’s contribution to PF/ESIC beyond the due date as prescribed in PF/ESIC Act was only to the tune of Rs.12,584/-, but due to inadvertent mistake this crucial fact was omitted to be stated in the impugned order, and therefore the disallowance u/s.36(1)(va) of the Act should be restricted to the extent of Rs.12,584/-. Considering the afore discussed facts as well as the assessment order passed by the AO dated 29.09.2023 (supra), we are inclined to rectify the mistake apparent on the face of the record of the impugned order dated 31.05.2023 and modify our order to the extent that the disallowance u/s.36(1)(va) of the Act be restricted to Rs.12,584/- and not to disallow Rs.9,15,520/- as stated in the impugned order. We make it clear that since AO himself has disallowed Rs.12,584/- u/s 36(1)(va) of the Act vide order dated 29.09.2023, no more disallowance is warranted on this score. 4. In the result, the Miscellaneous Application filed by the assessee is partly allowed. Order pronounced in the open court on this 17/10/2023. Sd/- Sd/- (B. R. BASKARAN) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER मुुंबई Mumbai; दिनाुंक Dated: 17/10/2023. Vijay Pal Singh, (Sr. PS) MA. No. 483/Mum/2023 A.Y. 2020-21 M/s. Mehara Eyetech Pvt. Ltd. 5 आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधयक िंजीकधर /(Dy./Asstt. Registrar) आयकर अिीलीय अनर्करण, मुुंबई / ITAT, Mumbai 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुुंबई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file.