The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) recently disallowed the deduction under Section 143 B of the Income Tax Act, 1961 due to late deposit and ESI/PF contribution made after the due date.
The assessee Vishivkarma Bikes filed his return of income declaring total income of Rs.25,86,355/-. The return was processed by the Central Processing Center (CPC) and order under Section 143(1) of Income Tax Act was passed wherein the disallowance of Rs. 154,701/- invoking the provisions of Section 143(1)(a)(iv) of Income Tax Act was made for fault of the assessee to pay the employees contribution to PF/ESI before the prescribed due date under the relevant statue.
Against the aforementioned intimation and the disallowance made under Section 36(1)(va) read with Section 143(1)(a)(iv) of the Income Tax Act, the assessee filed an appeal before the CIT(A), NFAC, which was dismissed and assessee filed an appeal before the Tribunal.
The bench, consisting of two members, Vice President Aakash Deep Jain and Accountant Member Vikram Singh Yadav, observed that the CIT(A) was justified in sustaining the adjustment under Section 143(1)(a) of the Income Tax Act by means of disallowance of Rs 154,701/- made for late deposit of employees’ share of PF/ESI contribution to the relevant funds beyond the date prescribed under the respective Acts. In the result, ground on ESI/PF contribution made after the due date, raised by assessee in appeal was dismissed.
The assessee had challenged the disallowance of Rs. 152,816/- under Section 43B of the Income Tax Act on account of CST payable, stating that it had not claimed the said amount in the first place. Therefore, the question of disallowance does not arise. In the absence of the requisite information available on record, the Tribunal moved the matter to the file of the Assessing Officer to examine the said claim of the assessee and decide as per the law, after providing a reasonable opportunity to the assessee. As a result, the ground on the disallowance under Section 43B of the Income Tax Act on account of CST payable was allowed for statistical purposes.
In the result, the appeal of the assessee is partly allowed for statistical purposes
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