The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) rejected the assessee’s appeal against the disallowance of Rs.22,69,973 for delayed PF and ESI payments, which was based on an intimation issued by the Central Processing Centre ( CPC ).
GMW Private Limited,the appellant-assessee, had filed its return declaring a gross income of Rs.1,72,23,838 for the assessment year ( AY ) 2019-20 on 25.10.2019. The return was processed under Section 143(1) of the Income Tax Act, 1961 and the delayed ESI/Provident Fund payments of Rs.22,69,973 were disallowed by the CPC.
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Consequently, the Assessing Officer ( AO ) raised a total demand of Rs.7,80,520. Being aggrieved by the Intimation under Section 143(1) of the Act dated 01.05.2020, the assessee filed an appeal before the CIT(A), which was dismissed.
The ground raised by the assessee was that the Commissioner of Income Tax (appeals) [CIT(A)] wrongly upheld the disallowance of Rs.22,69,973 for PF and ESI contributions paid late in the same year.
The assessee argued that the intimation under Section 143(1) was not provided before the adjustment made on 01.05.2020. While the disallowance of Rs.22,69,973 for delayed PF payments was upheld by the Supreme Court in Checkmate Services Pvt. Ltd. vs. CIT, this decision came after the intimation. The assessee claimed that the addition was debatable and outside the scope of Section 143(1), as it relied on a retrospective amendment.
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The Tribunal heard both parties and reviewed the relevant material on record. After examining the order dated 01.05.2020 under Section 143(1), it noted that the adjustment intimation was sent on 14.02.2020 to the assessee’s registered email, as mentioned in the Tribunal’s Form No.36 and CIT(A)’s Form No.35. The order also referenced the same email on its first page. Therefore, the bench found that the intimation was properly communicated, and the assessee’s argument was not upheld.
The appellate tribunal noted that the Supreme Court and Gujarat High Court had ruled against the assessee on delayed PF and ESI payments. Thus, the CIT(A) correctly dismissed the appeal.
The two member bench comprising Suchitra Kamble ( Judicial Member ) and Makarand Vasant Mahadeokar ( Accountant Member ) dismissed the appeal filed by the assessee.
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