2018 (9) TMI 792 - AT - Income Tax

Disallowance u/s 80IA - Held that - We find that similar issue came up for consideration before the SMC-B Bench bench in assessee s own case for AY 2010-11 and 2012-12 we set aside the order of CIT(A) and remit the issue back to the file of AO to decide the issue afresh considering the documents filed by the assessee and in accordance with law after providing reasonable opportunity of being heard to the assessee in the matter. Thus the issued raised in ground Nos. 1 - 4 are treated as allowed for statistical purposes. Disallowance u/s 36(1)(va) - delay in contribution to PF and ESI - Held that - It is a settled position of law that if the contributions towards PF & ESI are paid beyond the due date but before filing of the return of income u/s 139(1) of the Act no disallowance can be made. Therefore we remit this issue also to the file of the AO to verify whether the amounts paid before filing of the return of income if so disallowance may be deleted

Summary

Issues:
1. Disallowance u/s 80IA for AY 2013-14.
2. Disallowance of EPF and ESI remittance of employees contribution.
3. Appeal against the order of CIT(A) confirming the disallowances.
4. Grounds of appeal raised by the assessee.
5. Remittance of issues back to the AO for fresh examination.

Analysis:

Issue 1 - Disallowance u/s 80IA for AY 2013-14:
The assessee, engaged in handling hazardous waste, filed its return for AY 2013-14. The AO disallowed profits from the Kerala unit due to lack of approvals from the Pollution Control Board, estimating profits based on previous years. The AR explained cash payments as unavoidable in certain operations. The AO disallowed EPF and ESI remittance beyond the due date. The CIT(A) confirmed these disallowances, leading to the assessee's appeal.

Issue 2 - Disallowance of EPF and ESI remittance:
The AO disallowed EPF and ESI remittance of employees' contributions due to late payment. The assessee appealed against this disallowance, arguing that if contributions are paid before filing the return u/s 139(1) of the Act, no disallowance should occur.

Issue 3 - Appeal against CIT(A)'s order:
The assessee appealed against the CIT(A)'s decision to confirm the disallowances u/s 80IA and u/s 36(1)(va). The grounds of appeal included references to previous ITAT decisions in the assessee's favor for other assessment years.

Issue 4 - Grounds of appeal raised by the assessee:
The assessee raised seven grounds of appeal, with specific focus on disallowances u/s 80IA and u/s 36(1)(va). Ground No. 7 highlighted the applicability of previous ITAT decisions to the current case.

Issue 5 - Remittance of issues back to the AO:
The ITAT remitted the issues back to the AO for fresh examination based on documents submitted by the assessee, including agreements with the Indian Medical Association and approvals from the Pollution Control Board. The ITAT directed the AO to consider the documents and provide a fair opportunity for the assessee to present its case. The disallowances u/s 80IA and u/s 36(1)(va) were treated as allowed for statistical purposes.

In conclusion, the ITAT allowed the appeal of the assessee for statistical purposes, remitting the issues back to the AO for a fresh examination based on the documents submitted and in accordance with the law. The judgment emphasized providing a fair opportunity for the assessee to be heard in the matter.