2017 (12) TMI 1476 - AT - Income Tax

Addition being interest u/s.244A on Income Tax Refund for A.Y.2009-10 - Held that - In our opinion, assessee has received the said information from the Assessing Officer during the course of assessment proceedings which took place during financial year 2014-15. The said amount of interest has therefore been provided in the Financial Year 2015-16, which is also subject to certain rectification on factual grounds as the amount of set off of different years is not correct. They have made separate entry in general voucher dated 01/04/2015 mentioning Being the jv pass for interest received form Income Tax Dep. for the A.Y. 2009-10. Interest income booked in F.Y. 2015-16 . In our considered opinion, in such circumstances no addition can be made. In the result, this ground of appeal is in favour of the assessee. Late payment of employees contributions of provident fund and ESIC by invoking Section 36(1)(va) - Held that - Since assesses had no deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1)(va), disallowance made by Assessing Officer was just and proper. See CIT vs Gujarat State Road Transport Corporation 2014 (1) TMI 502 - GUJARAT HIGH COURT - Decided against assessee.

Summary

Issues:
1. Addition of interest u/s.244A on Income Tax Refund for A.Y. 2009-10
2. Disallowance of late payment of employees' contributions to Provident Fund and ESIC

Analysis:

Issue 1: Addition of interest u/s.244A on Income Tax Refund for A.Y. 2009-10
The appellant contested the addition of interest under section 244A on the Income Tax Refund for A.Y. 2009-10. The appellant argued that they were not provided with any intimation or breakdown of the interest credited to their bank account, and the Form 26AS did not reflect this interest. The appellant claimed ignorance of the interest amount due to lack of communication from the tax authorities. The appellant further stated that they had rectified the amount in the subsequent financial year and made a specific entry in their accounts. The tribunal ruled in favor of the appellant, stating that no addition could be made under such circumstances.

Issue 2: Disallowance of late payment of employees' contributions to Provident Fund and ESIC
The appellant challenged the disallowance made under section 36(1)(va) for the late payment of employees' contributions to Provident Fund and ESIC. The assessing officer noted discrepancies between the amounts debited in the accounts and the actual late deposits made towards PF and ESIC. Citing relevant case law, the tribunal upheld the disallowance, emphasizing that even if the contributions were deposited before the filing of the return, the failure to credit them on time as per the Explanation to section 36(1)(va) warranted the disallowance. The tribunal dismissed the appellant's appeal on this ground, aligning with the jurisdictional High Court's interpretation.

In conclusion, the tribunal partially allowed the appeal, ruling in favor of the appellant regarding the addition of interest under section 244A but upholding the disallowance of late payments towards employees' contributions to Provident Fund and ESIC.