Pramod Telecom Pvt. Ltd. Vs DCIT/ACIT-3 (ITAT Lucknow)
ITAT Lucknow held that claim has been allowed by AO in scrutiny proceedings u/s 143(3) of the Act, it was natural that the demand raised on the same issue under section 143(1)(a) of the Act is required to be modified. Accordingly, appeal partly allowed.
Facts- The assessee company filed a return of income on 30.10.2018 which was processed u/s. 143(1)(a) vide order dated 2.10.2019 by making adjustments towards inconsistency in provision of payment of gratuity u/s. 40A(7) of the I.T. Act of Rs.49,17,636/- and sums received from employees as contribution to provident fund / ESI but not credited to the employees account before the due date u/s. 36(1)(va) of Rs. 29,16,547/-.
Thereafter, on 29.08.2019, the case was picked up for limited scrutiny and the matter was scrutinized on the issue of, ‘disallowance u/s. 40A(7)’. AO concluded the assessment with the finding that, ‘no addition on the issue was made’ vide his order dated 10.07.2022. However, the ld. AO did not make any discussion regarding the addition made on account of violation of section 36(1)(va) of Rs. 29,16,547/-. In effect, despite not making any disallowance on account of gratuity in the body of the assessment order, AO continued to perpetuate the demand created on this account in the proceedings u/s. 143(1)(a).
