RAJARAM TATOBA TAMBAVE,KOLHAPUR V. DCIT, CIRCLE-1, KOLHAPUR

ITA 1837/PUN/2024

AI Insights

The case involves an appeal by Rajaram Tatoba Tambave against the order of the CIT(A) confirming adjustments made under section 143(1)(a) of the Income Tax Act, 1961, related to delayed payment of employees' provident fund contributions. The appellant contested the addition of Rs 54,13,926 as an adjustment for disallowance of expenditure, arguing that the liability for provident fund contributions lay with the principal employer, not the appellant, who acted as a labor contractor. The CIT(A)'s decision was challenged on grounds that the adjustments were not applicable as per the facts of the case and that the legal provisions cited were misapplied. The ITAT found merit in the appellant's request for re-evaluation of the adjustments and admitted additional evidence, leading to the remittance of the case to the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46798 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Other Referred Cases: Checkmate Services (P.) Ltd. vs. CIT-1
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A.D.KULKARNI
• Assessee Lawyers: DEEPA KHARE
• Keywords: Additional evidence; Reasonable cause
• Section: 250; 143(1); 43B

Judgement Text

"आयकर अपीलीय अधिकरण \"बी\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"B\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1837/PUN/2024 धििाारण वषा / Assessment Year: 2019-2020 Rajaram Tatoba Tambave, Jayhind Park, Opp Shivaji School, Kasaba Bavada karveer, Kolhapur-416006 Maharashtra PAN-ADSPT1310K Vs DCIT, Circle-1, Kolhapur Appellant Respondent Assessee by : Deepa Khare Revenue by : Shri A.D. Kulkarni, Additional CIT Date of hearing : 02.04.2025 Date of pronouncement : 09.04.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order dated 12.08.2024 passed by the CIT(A) NFAC, Delhi u/s 250 of the Income tax Act, 1961 which is arising out of order u/s 143(1) dated 26.08.2020. 2. The Assessee has raised following grounds of appeal:- 1. Whether on facts and in law the Id CIT(A) was right in confirming the addition of Rs 54.13.926 by way of adjustment in 143(1)(a) in respect of delayed payment of employees provident fund when the appellant was acting as a labour contractor and The liability of the deduction and payment under Provident Fund Act was on the principle employer 2 ITA No.1837/PUN/2024 Without prejudice to the above ground- 2. The Id CIT(A) erred on facts and in law in not appreciating that employees contribution are not debited to Profit and Loss account nor claimed as deductions? 3. The Id CIT(A) was not correct in confirming the adjustments u/s 143(1)(a) of Rs 54,13.926/- when the clauses (i), (ii) and (iii) were not applicable to the facts of the appellant 4. Whether on facts and in law the Id CIT(A) was right in confirming the addition of Rs 54,13,926/- by way of adjustment in 143(1)(a) as disallowance of expenditure when the adjustment could arise only as increase in income at the time of receipt of employees contribution as per Section 2(24) (x) and Section 36(1) (va) is applicable allowing deduction only upon payment within statutory period. 5. The Id CIT(A) failed to appreciate that Sub-clause (iv) of Section 143(1)(a) was amended from w.e.f 1.4.2021 to include words \"or increase in income\" enabling an adjustment by way of addition to income w.e.f 1.4.2021. The adjustment by way of addition to income u/s 2(24)(x) could be done after 1.4.2021. For the period prior to 1.4.2021, provisions of Section 143(1)(a) did not permit adjustment of delayed payment of employees contribution by way of addition to income. 6. The Id CIT(A) was not justified by incorrectly applying the decision of Hon'ble Supreme Court in the case of Checkmate Services (P.) Ltd. vs. CIT-1 in the context of adjustment u/s 143(1) towards disallowance of expenditure whereas the Hon Supreme Court has held the employees contributions as income u/s 2(24)(x). ITAT Pune Benches 7. Ld CIT(A) erred in law and on facts in not appreciating that the impugned disallowance by way of prima facie adjustment is unjustified in law and on facts which is debatable and two views are possible. The same cannot be construed as apparent error to be added by way of adjustment while processing of the return of income. 8. The id CIT(A) was not correct in confirming the adjustments u/s 143(1)(a) of Rs 1,40,11,860/- disallowance of expenditure indicated in Audit Report when no deduction was claimed. 9. The Id CIT(A) was not correct in confirming the adjustments u/s 143(1)(a) of Rs 1,40,11,860/- when the clauses (i), (ii) and (iii) were not applicable to the facts of the appellant. 10. The appellant craves right to add, alter, delete, modify or amend any change or all the above grounds of appeal before or during the course of hearing. 3 ITA No.1837/PUN/2024 3. At the outset Ld. Counsel for the assessee prayed for admission of additional evidence before this Tribunal. 4. We have gone through the additional evidence and also gone through the grounds of appeal where certain issues have been raised regarding the adjustment made by CPC u/s 143(1)(a) of the Act by making disallowance/admissions u/s 36(1)(va) and section 43B of the Act. Ld. DR did not opposed if all the issues raised in the instant appeal are remitted back for necessary adjudication and due consideration of additional evidence. 5. We have heard rival contentions and perused the record placed before us. The assessee is aggrieved with the impugned order confirming the adjustment made by the CPC in the return processed u/s 143(1)(a) of the Act by making adjustment/disallowance u/s 36(1)(va) and section 43B of the Act based on the clarification/ observation of the Tax Auditors. 6. The assessee has filed additional evidence with regards to the grounds challenging the adjustment made u/s 36(1)(v) of the Act. Considering the additional evidence and the submissions of both the sides we deem it proper to admit the additional evidence and remit all the issues raised on merits in the instant appeal to the file of Ld. CIT(A) for re-adjudication. Ld. CIT(A) shall call for a remand report from the Ld. Jurisdictional Assessing Officer (JAO) and then decide the issues raised on merits in the instant appeal in accordance with law as contemplated u/s 250(6) of the Act. Needless to mention that proper opportunity of hearing shall be granted to the assessee. Assessee is also directed to remain vigilant and not to take unnecessary adjournment unless required for reasonable cause. Grounds of appeal raised by the assessee are allowed for statistical purposes. 4 ITA No.1837/PUN/2024 7. In the result appeal of the assessee is allowed for statistical purposes. Order pronounced on this 09th day of April, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; दििांक / Dated: 09th April, 2025. Neeta आिेश की प्रधिधलधप अग्रेधषि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"बी\" बेंच, पुणे / DR, ITAT, \"B\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, वररष्ठ धिजी सधचव / Sr. Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune "