SAHIL JAIN B-XIX,431/I-D, COLLEGE ROAD, CIVIL LINES, LUDHIANA,LUDHIANA V. INCOME TAX OFFICER WARD-7(1), , LUDHIANA

ITA 1243/CHANDI/2024

AI Insights

The case involves Shri Sahil Jain, the appellant, who contested the adjustments made by the Central Processing Centre (CPC) under section 154 of the Income Tax Act, concerning withdrawals from his Employees' Provident Fund (EPF) account for the Assessment Year 2017-18. The CPC had adjusted Rs.8.27 Lacs, which included the employee's contribution, employer's contribution, and interest on both contributions. The main contention was whether the adjustment of Rs.6.69 Lacs, representing the employee's contribution, was justified, given that the appellant had not claimed deduction under section 80C for these contributions in the earlier years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397930 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: KUSHAL CHOPRA SUDHIR SEHGAL
• Keywords: Rectification of order
• Section: 154; 80C

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं. / ITA No.1243/CHANDI/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-18) Shri Sahil Jain B-XIX 431/I-D College Road, Civil Lines Ludhiana बनाम/ Vs. ITO Ward- 7(1) Ludhiana. ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AHQPJ-5954-M (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Kushal Chopra (CA) for Shri Sudhir Sehgal (Advocate) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 21-05-2025 घोषणाकीतारीख /Date of Pronouncement : 02-06-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 26-11-2024 in the matter of rectification order passed by CPC u/s 154 on 18-02-2020. The assessee is aggrieved by adjustment of Rs.8.27 Lacs as made by CPC. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2 2. It emerges that the assessee withdrew certain amount from EPF account, the bifurcation of which was as under: - No. Particulars Amount (Rs.) 1. Employees Contribution 6,69,000/- 2. Employers Contribution 17,204/- 3. Interest on Employee Contribution 1,45,422/- 4. Interest on Employer Contribution 2,746/- Total 8,34,372/- The assessee admittedly did not complete qualifying period of 5 years and accordingly, these withdrawals become taxable in the hands of the assessee. So far as item nos. 3 & 4 are concerned, the same have already been offered to tax by the assessee in its return of income. So far as item no.2 is concerned, it is admitted position that the same is taxable in the hands of the assessee and therefore, the adjustment to that extent is justified. The dispute is only with respect to item no.1 for which Ld. AR has drawn our attention to the fact that these contributions were made by the assessee in earlier years and against such contributions, the assessee would be eligible to claim deduction u/s 80C. However, deduction u/s 80C was not, at all, claimed against the contributions which were amply demonstrated from the computation of income of earlier years as placed on record. In such a case, Rule 9 of Part A of Fourth Schedule would apply which provide that income tax has to be calculated by adding such contribution to the respective years in which the same has been received assuming that the said fund was not a recognized provided fund which would mean that deduction u/s 80C as claimed in previous years has to be disallowed in 3 such previous years. Since the assessee never claimed the deduction u/s 80C on these contributions, the adjustment to that extent deserves to be deleted. 3. The averments of Ld. AR are found to be correct. The assessee has not claimed deduction of these contributions in earlier years. Therefore, in terms of stated Rule-9, the adjustment to the extent of Rs.6.69 Lacs is not justified. Accordingly, the same stand deleted. The Ld. AO is directed to re-compute the income of the assessee. 4. The appeal stand partly allowed. Order pronounced on 02-06-2025. Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 02-06-2025 आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH "