Maa Harsiddhi Infra Developers Private Limited Vs ACIT (Chhattisgarh High Court)
The appeal under Section 260A of the Income Tax Act, 1961 challenged the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, which had upheld the Assessing Officer’s action in processing the assessee’s return under Section 143(1)(a) and disallowing deduction of delayed deposit of employees’ contributions towards Employees’ State Insurance (ESI) and Employees’ Provident Fund (EPF) under Section 36(1)(va).
For Assessment Year 2019-20, the assessee filed its return declaring total income of Rs.2,57,41,230/- and paid tax of Rs.71,61,211/-. While processing the return under Section 143(1)(a), the Central Processing Centre/Assessing Officer disallowed deduction of Rs.32,77,451/- relating to delayed deposit of employees’ contributions to ESI and EPF by intimation dated 27-2-2020. The assessee’s appeal before the CIT(A) was dismissed on 28-11-2022 after the Supreme Court’s decision in Checkmate Services Private Limited v. Commissioner of Income Tax-11 dated 12-10-2022. The ITAT also dismissed the appeal on 19-12-2024, leading to the present appeal.
The assessee contended that when the intimation under Section 143(1)(a) was issued on 27-2-2020, the issue concerning deduction under Section 36(1)(va) for delayed deposit of employees’ contributions was pending before the Supreme Court and was therefore highly debatable. It argued that Section 143(1)(a) permits only prima facie adjustments and not adjudication of contentious issues. The assessee relied on Kvaverner John Brown Engg. (India) Pvt. Ltd. v. Assistant Commissioner of Income Tax and Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. It also submitted that the ITAT had previously taken a similar view in Satpal Singh Sandhu v. DCIT and Parv Buildcon v. DCIT, and that the Revenue had withdrawn its appeals against those decisions. The assessee further argued that the ITAT wrongly relied upon M/s. BPS Infrastructure v. ITO since that case had been dismissed on limitation without deciding the substantial question involved in the present appeal.
