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2022 (9) TMI 702 - AT - Income TaxRevision u/s 263 - Disallowance of PF ESI contribution - HELD THAT - The issue regarding allowance and disallowance of PF ESI contribution has been settled by the Hon'ble Jurisdictional High Court and if such contribution has been made before the due date of filing of the return, then no disallowance has to be made. We have recently decided a large number of appeals on this issue. Recently we have considered this aspect in 2022 (3) TMI 961 - ITAT KOLKATA wherein we took note of the earlier order of ITAT, Kolkata dated 09.03.2022 whereby the Tribunal considered the impact of amendment brought into section 36(1) as well as 43B by Finance Act, 2021. Thus once a fact was brought to the notice to the ld. CIT, he should have got it verified from the ld. Assessing Officer before recording a finding that assessment order is erroneous as much as prejudicial to the interest of revenue. The order of the ld. CIT is totally silent on this aspect. We allow this appeal for statistical purposes and remit this issue to the ld. CIT with a direction that a remand report be called from the ld. Assessing Officer and if it is proved that all these payments have been made before the due date of filing of the return, then proceedings under section 263 will be dropped - Appeal of the assessee is allowed for statistical purposes.
Issues:
- Appeal against order of ld. Principal Commissioner of Income Tax, Kolkata-9 dated 17.03.2022 for assessment year 2017-18. - Grievance regarding the error in taking cognizance under section 263 of the Income Tax Act by ld. Pr. CIT. Analysis: 1. The appellant challenged the order of the Principal Commissioner of Income Tax, Kolkata-9 for the assessment year 2017-18, focusing on the issue of the Commissioner's error in invoking section 263 of the Income Tax Act. 2. Despite the absence of the assessee during the hearing, the Tribunal, assisted by ld. CIT(DR), reviewed the case records. The core concern revolved around the employees' contribution of Rs. 5,70,002/- to P.F. & ESI Accounts, with the assessee contending that most amounts were paid before the due dates stipulated in the PF & ESI Acts. 3. The ld. CIT(DR) argued that the assessment order did not clearly reflect this crucial fact, justifying the Commissioner's decision to proceed under section 263. 4. Notably, the grounds of appeal presented to the Tribunal mirrored those submitted to the ld. CIT, as evidenced by the submissions dated 14.03.2022 referenced in the impugned order. 5. The Tribunal referred to previous decisions, particularly highlighting the settled stance on the allowance of PF & ESI contributions if made before the due date of filing the return, as established by the Jurisdictional High Court. 6. Citing recent appeals and a specific case, the Tribunal emphasized the impact of the Finance Act, 2021 amendments on sections 36(1) and 43B, clarifying the prospective nature of the changes and the relevance of legislative intent in determining retrospective application. 7. Following a detailed analysis of relevant legal principles and precedents, the Tribunal concluded that the amendment introduced by the Finance Act, 2021 was prospective, aligning with the legislative intent for applicability from April 1, 2021, onwards. 8. Critically, the Tribunal found fault with the ld. CIT's failure to verify crucial facts with the Assessing Officer before deeming the assessment order erroneous under section 263. Consequently, the appeal was allowed for statistical purposes, directing a remand to the ld. CIT for further assessment based on verified information. 9. Ultimately, the Tribunal set aside the impugned order under section 263, remitting the issue back to the ld. CIT for fresh consideration, thereby allowing the appeal of the assessee for statistical purposes. This comprehensive analysis of the judgment highlights the key legal arguments, precedents, and procedural aspects involved in the appeal against the order of the Principal Commissioner of Income Tax, emphasizing the Tribunal's interpretation of the relevant provisions and legislative intent in the context of the Finance Act, 2021 amendments.
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