Case Law Details
Ranjeet Kumar Budhia Vs DCIT CPC (ITAT Ranchi)
ITAT Ranchi directed CIT(A) to reconsider the matter of disallowance due to late deposit of Employees Contribution u/s 36(1) (va) of the Income Tax Act in light of decision of Hon’ble Supreme Court in Checkmate Services.
Facts- The return of income was filed by the appellant on 30.10.2018. The same was processed u/s 143(1) of the Act on 08.01.2020 in the said order u/s 143(1) of the Act, DCIT-CPC disallowed a sum of ₹ 46,01,390/- due to late deposit of Employees Contribution u/s 36(1) (va) of the Act. The appellant then filed a rectification application u/s 154 of the Act on 17.02.2020 to rectify the mistake on the ground that the AO has wrongly disallowed the same. The AO-CPC, however, rejected the grounds taken by the appellant vide its order u/s 154 of the Act dated 08.06.2020. CIT(A) also dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that CIT(A) has not considered the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-1: Civil Appeal No.2833 of 2016, while deciding the grounds of appeal raised by the appellant. It is therefore, pertinent on our part to remand the matter back to the file of Ld. CIT(A) to reconsider the case in the light of latest decision of the Hon’ble Supreme Court in Checkmate Services (supra) and decide it accordingly.
FULL TEXT OF THE ORDER OF ITAT RANCHI
This appeal preferred by the assessee emanates from the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short “the Ld. CIT(A)”) dated 21.04.2022, passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for Assessment Year 2018-19.
2. The assessee has raised the following grounds of appeal:
“1. That the Ld. CIT (A) is erred in law and on facts by not deciding the grounds of appeal and dismissing the appeal of the assessee arbitrarily.
2. That the CIT(A) was not was not justified in confirming the addition made towards EPF and ESIC on the ground that the same was not deposited within the due date prescribed under the respective Act.
3. That the CIT(A) is erred in sustaining the disallowance of deduction claimed on account of Employee’s contribution to Provident Fund and ESI by invoking the amended provision of section 36(1) (va) r.w.s. 43B treating the amended provision as retrospective.
4. That the CIT(A) erred in not deleting the interest charged under section 234B & 234C which should have been charged on returned income and not on assessed income, following the decision of Honorable Jharkhand High Court.
5. That the appellant craves leaves to add one or more ground of appeal or to alter/modify the existing ground before or at the time of hearing of appeal.”
3. The facts of the case, in brief, are that the return of income was filed by the appellant on 30.10.2018. The same was processed u/s 143(1) of the Act on 08.01.2020 in the said order u/s 143(1) of the Act, DCIT-CPC (hereinafter ‘AO’) disallowed a sum of ₹ 46,01,390/- due to late deposit of Employees Contribution u/s 36(1) (va) of the Act. The appellant then filed a rectification application u/s 154 of the Act on 17.02.2020 to rectify the mistake on the ground that the AO has wrongly disallowed the same. The AO-CPC, however, rejected the grounds taken by the appellant vide its order u/s 154 of the Act dated 08.06.2020.
4. Aggrieved by the order of AO-CPC the appeal was filed before the Ld. CIT(A), who, vide the impugned order, dismissed the appeal of the assessee on the ground that the AO has rightly rejected the rectification application filed by the appellant u/s 154 of the Act as various High Courts have already decided that the deduction u/s 36(1)(va) of the Act is allowable only when the same is deposited before the due date as prescribed under the respective Act.
5. Aggrieved by the order of the Ld. CIT(A), this appeal has been preferred. During the appellate proceedings before us, the Ld. Authorised Representative pointed out that the Ld. CIT(A) has erred in confirming the addition made by the Assessing Officer by taking retrospective effect by invoking the amended provision of section 36(1) (va) read with section 43B of the Act.
6. We have considered the rival submissions and it is found the Ld. CIT(A) has not considered the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. Commissioner of Income Tax-1: Civil Appeal No.2833 of 2016, while deciding the grounds of appeal raised by the appellant. It is therefore, pertinent on our part to remand the matter back to the file of Ld. CIT(A) to reconsider the case in the light of latest decision of the Hon’ble Supreme Court in Checkmate Services (supra) and decide it accordingly.
7. In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced on 28.11.2024.
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