Crown Gaskets Private Limited Vs ITO (ITAT Delhi)
PF/ESI 36(1)(va) Disallowance under 143(1) Set Aside – ITAT Remands Matter to AO After Accepting Revised Tax Audit Report
Assessee filed return declaring income of ₹24.41 lakh. CPC, Bengaluru processed the return u/s 143(1) & made an adjustment of ₹35,75,905/- by disallowing employees’ PF/ESI contribution u/s 36(1)(va), based on due dates reported in Clause 20(b) of the Tax Audit Report. CIT(A) confirmed the disallowance, holding that TAR details are final unless a revised report is filed, & observed that Assessee had not furnished any revised TAR or proof of auditor error.
Before Tribunal, Assessee produced a Revised Tax Audit Report & PF/ESI challans demonstrating that employee contributions were deposited within the statutory due dates (within 15 days of month-end). It was submitted that the Tax Auditor had mistakenly clubbed employer + employee contributions in the original TAR & had acknowledged the error. Tribunal noted that CIT(A) passed the order without considering the revised TAR or verifying the challans, which was not in accordance with law.
Tribunal held that if payments were made within the time prescribed under the respective Acts, no disallowance can survive. Given the fresh evidence & the need for factual verification, Tribunal restored the matter to AO for de novo verification of revised TAR & challans. Appeal was allowed for statistical purposes.
