Pinnacle Vastunirman Private Limited Vs DCIT (ITAT Pune)
Payee Paid the Tax, So Payer Escapes ₹1.59-Crore Disallowance: Form 26A Rescues NBFC Interest While Delayed PF/ESI Issue Sent Back for a Second Look – ITAT Pune
Summary: The assessee, a real-estate developer, filed its return declaring a normal loss of ₹71,11,746 and book profit of ₹3,07,193 under MAT. While processing the return u/s 143(1), the CPC determined total income at ₹88,66,360 and raised a demand of ₹27,21,464.
The variation arose from two adjustments. The CPC disallowed employees’ contribution to PF/ESI of ₹49,179 u/s 36(1)(va) on account of delayed deposit. It also disallowed ₹1,59,28,930 u/s 40(a)(ia), being 30% of interest of ₹5,30,96,434 paid to India Infoline Finance Limited, an NBFC, for alleged non-deduction or short deduction of TDS.
The Addl./JCIT(A) sustained both adjustments. Although the assessee had filed written submissions and evidence, it failed to attend the video hearing fixed for producing further reconciliation. The appellate authority held that employees’ contribution deposited beyond the due dates under the respective welfare laws was not allowable merely because it was deposited before the return-filing due date.
Regarding NBFC interest, the Addl./JCIT(A) observed that NBFCs are not excluded from section 194A in the manner applicable to certain banks and specified institutions. He also found partial TDS compliance and declined to grant relief based on Form 26A without further reconciliation.
