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2022 (10) TMI 122 - AT - Income TaxDisallowance of u/s 43B - delay/default in depositing of the amounts paid for DVAT, Service Tax, TDS and Mumbai VAT - or the reason that in the tax audit report, the amount was reflected in Clause 26(i)(B)(b) which was with respect to liability u/s 43B not paid on or before the due date - HELD THAT - Assessee has placed on record the date of the payments of the various amounts and has demonstrated that all the payments have been made before the due date of filing of return of income. The contention of the assessee of the amount being paid before the due date of filing of return has not been controverted by Revenue. Considering the totality of the aforesaid facts coupled with the fact that the Chartered Accountant of the assessee has also given Certificate that all the amounts have been paid before the due date of filing of return of income and due to inadvertent error, the amount was reflected under Clause 26(i)(B)(b) instead of Clause 26(i)(B)(a) of the Tax Audit Report. We are of the view that no disallowance is called for. We, accordingly, direct the AO to delete the addition made by assessee. Thus the ground of assessee is allowed. Disallowance u/s 36(i)(va) - contribution received towards PF/ESIC by the assessee from its employees was not deposited before the due date - HELD THAT - Before us, Revenue has not placed any material on record to demonstrate that the aforesaid order cited hereinabove has been overruled/stayed/set aside by higher judicial forum - we are of the view that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, albeit before filing the return of income. Admittedly in the matter, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income. Respectfully following the decision of the Hon ble High Court cited hereinabove, we allow the grounds raised by the assessee and direct the AO to delete the addition. Addition made in the intimation issue u/s 143(1) - contention of the assessee that though the assessee had earned dividend income and also reflected in the computation of income under Schedule BP but however erroneously in Schedule EIHELD THAT - Considering the submissions of AR, we are of the view that the contention of the assessee needs to be examined by AO. We, therefore, restore the issue back to the file of AO and direct him to verify the contention of the assessee. If the contention of the assessee is found correct about the addition being wrongly made, the same be deleted. Assessee is also directed to co-operate by furnishing of all the details furnished by AO. Thus the ground of assessee is allowed for statistical purpose. Short credit of TDS - grievance of the assessee is that assessee has not been granted credit of the TDS in the intimation u/s 143(1) of the Act though the same is reflected in From 26AS - HELD THAT - Considering the submissions of the assessee, we are of the view that the issue of credit of TDS needs to be examined by AO. AO is, therefore, directed to verify the contention of the assessee and if the contention of the assessee found correct then the AO is directed to grant the credit of TDS reflected in Form 26AS in accordance with law. The assessee is also directed to furnish all the required details called for by AO. Thus the ground of assessee is allowed for statistical purposes.
Issues Involved:
1. Disallowance under Section 43B of the Income Tax Act. 2. Disallowance under Section 36(1)(va) of the Income Tax Act. 3. Addition of exempt income. 4. Short credit of TDS. Detailed Analysis: 1. Disallowance under Section 43B of the Income Tax Act: The primary issue in ITA No. 767/Del/2021 for A.Y. 2017-18 revolves around the disallowance of Rs. 96,41,926/- under Section 43B of the Act. The disallowance was made due to the alleged delay in depositing statutory dues such as DVAT, Service Tax, TDS, and Mumbai VAT. The assessee contended that all payments were made before the due date of filing the return of income, but the amounts were incorrectly reflected in the tax audit report due to an auditor's error. The Tribunal, after reviewing the submissions and the Chartered Accountant's certificate, concluded that no disallowance was warranted as all payments were made timely. Consequently, the Tribunal directed the AO to delete the addition. 2. Disallowance under Section 36(1)(va) of the Income Tax Act: In ITA No. 766/Del/2021 for A.Y. 2018-19, the issue pertains to the disallowance of Rs. 14,92,677/- under Section 36(1)(va) for delayed deposit of employees' PF/ESIC contributions. The assessee argued that although there was a delay, all contributions were deposited before filing the return of income. The Tribunal referenced various judicial pronouncements, including the Hon'ble Delhi High Court's decision in PCIT vs. Pro Interactive Service (India) Pvt. Ltd., which supports the assessee's position. The Tribunal noted that the amendment by Finance Act 2021, which clarifies that Section 43B does not apply to such contributions, is effective from A.Y. 2021-22 and does not impact the current assessment year. Thus, the Tribunal directed the AO to delete the addition. 3. Addition of Exempt Income: The assessee contested an addition of Rs. 61,818/- related to exempt income, arguing that the discrepancy arose from an error in reporting dividend income in Schedule EI of the tax return. The Tribunal accepted the assessee's request to remit the matter back to the AO for verification. The AO was directed to verify the correct amount of exempt income and make necessary adjustments if the assessee's claim was substantiated. 4. Short Credit of TDS: The assessee claimed that a TDS credit of Rs. 3,10,000/- was not granted, despite being reflected in Form 26AS. The Tribunal directed the AO to verify the TDS credit from Form 26AS and grant the appropriate credit if the claim was accurate. The assessee was instructed to provide all necessary details for verification. Conclusion: The appeals for both assessment years were allowed. For A.Y. 2017-18, the disallowance under Section 43B was deleted. For A.Y. 2018-19, the disallowance under Section 36(1)(va) was deleted, the issue of exempt income was remanded for verification, and the short credit of TDS was directed to be verified and adjusted accordingly.
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