Binay Rambahal Singh Vs ITO (ITAT Surat)
In Binay Rambahal Singh vs. ITO, the ITAT Surat addressed an appeal concerning the disallowance of employer contributions to PF and ESIC under Section 143(1) for the Assessment Year 2018–19. The appeal was initially flagged for delay due to a clerical error in Form 36, but it was ultimately deemed filed within the time limit. The primary issue was an inadvertent mistake in the tax audit report, where the tax auditor reported both employee and employer contributions under the same column. As a result, the Centralized Processing Centre (CPC) disallowed the full amount of ₹1,53,67,750.
The assessee clarified that the actual employees’ contribution was ₹68,56,024, and the remainder — ₹85,11,726 — was the employer’s share, which should not have been disallowed. Despite filing a rectification request and raising the issue before the CIT(A), the additional ground highlighting the reporting error was not considered.
The Tribunal accepted that the disallowance stemmed from a factual error in the audit report. Given this, the matter was remanded back to the Assessing Officer to verify the corrected figures and determine the proper disallowance, if any, after giving the assessee a chance to present relevant documents. The Tribunal also clarified that the pending Special Civil Application No. 270 of 2022 challenging related provisions under Section 36(1)(va) and 43B would not influence the current case, as the assessee is not a party to it.
