2024 (6) TMI 812 - AT - Income Tax

Delayed payment of employees contribution towards provident fund and ESIC - HELD THAT - Issue is covered in favour of the Revenue by the decision of Checkmate Services Pvt. Ltd. 2022 (10) TMI 617 - SUPREME COURT Accordingly, respectfully following the aforesaid decision of the Hon ble Supreme Court, ground no.2 raised in assessee s appeal is dismissed. Disallowance of deduction claimed u/s 80-IA - assessee has failed to file Form no.10CCB within the due date - HELD THAT - We find that in the facts of the case, the taxpayer could not produce a copy of the audit report in Form no.10CCB, though claimed to be filed after a delay. However, as noted above, in the present case, the learned CIT(A) upon verification of the database noted that the audit report in Form no.10CCB was filed by the assessee online on 11/06/2020. Therefore, we are of the considered view that the reliance placed by the learned CIT(A) on the aforesaid decision of the coordinate bench of the Tribunal is completely misplaced. During the hearing, DR supported the conclusion reached by the lower authorities by placing reliance upon the decision of Wipro Ltd. 2022 (7) TMI 560 - SUPREME COURT . From the perusal of the aforesaid decision passed by the Hon ble Supreme Court, we find that compliance with the provisions of section 10B(8) of the Act was under consideration before the Hon ble Supreme Court, which specifically requires furnishing of declaration to the AO before the due date of furnishing the return of income under sub-section (1) of section 139 of the Act. The provisions of section 80-IA(7) of the Act neither qualify the term return of income nor mention the specific provision of section 139 of the Act. Therefore, we are of the considered view that the decision of the Hon ble Supreme Court in Wipro Ltd (supra) does not support the case of the Revenue. Amendment to section 80-IA(7) of the Act, by the Finance Act, 2020, whereby the time period for audit and furnishing the audit report in Form no.10CCB has been laid down is made effective from 01/04/2020, and therefore, cannot apply to the assessment year under consideration. Since the audit report in Form no.10CCB has been found to have been filed on 11/06/2020 and the reference to the same was made by the assessee in its revised return of income filed on 22/07/2020, in the absence of any other allegation to deny the claim of deduction u/s 80-IA we are of the considered view that the CIT(A) erred in upholding the disallowance of deduction claimed u/s 80-IA -. Accordingly, on this issue, the impugned order is set aside, and ground no.1 raised in assessee s appeal is allowed.

Summary

Issues Involved:
1. Disallowance under Section 80-IA of the Income Tax Act, 1961.
2. Disallowance of employee's contribution to provident fund and ESIC under Section 36(1)(va) of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Disallowance under Section 80-IA:
The assessee challenged the disallowance of a deduction claimed under Section 80-IA of the Income Tax Act, 1961, amounting to Rs. 75,94,111. The original return of income was filed on 28/11/2019, but the audit report in Form no.10CCB was not submitted along with it. The Centralised Processing Centre (CPC) disallowed the deduction in the intimation dated 05/06/2020 issued under Section 143(1) of the Act. The assessee subsequently filed the audit report on 11/06/2020 and a revised return on 22/07/2020, which was again processed by the CPC, disallowing the deduction on the same grounds. The CIT(A) upheld the disallowance, stating that the audit report was not filed with the original return.

The Tribunal examined whether the audit report in Form no.10CCB must be filed with the original return or if it can be filed with a revised return. Section 80-IA(7) of the Act requires the audit report to be furnished along with the return of income but does not specify that it must be the original return. The Tribunal referenced the case of Aquasub Engineering v/s DCIT, where it was held that a revised return filed within the due date under Section 139(5) is valid for claiming deductions. The Tribunal found that the assessee filed the audit report on 11/06/2020 and referenced it in the revised return filed on 22/07/2020. Therefore, the Tribunal concluded that the CIT(A) erred in upholding the disallowance and allowed the deduction under Section 80-IA.

2. Disallowance of Employee's Contribution to Provident Fund and ESIC:
The assessee also challenged the disallowance of Rs. 85,466 under Section 36(1)(va) of the Act for delayed payment of employees' contribution to provident fund and ESIC. The learned Authorised Representative conceded that this issue is covered by the Supreme Court's decision in Checkmate Services Pvt. Ltd. Vs. CIT, which upheld the disallowance for payments made beyond the prescribed due date under respective laws, even if paid within the due date of filing the return of income. Consequently, the Tribunal dismissed this ground of appeal.

Conclusion:
The Tribunal partly allowed the appeal, setting aside the disallowance under Section 80-IA and upholding the disallowance under Section 36(1)(va). The decision emphasized the validity of revised returns for claiming deductions if filed within the statutory period and reaffirmed the Supreme Court's stance on the timeliness of statutory contributions.