2022 (1) TMI 78 - AT - Income Tax

Disallowance on account of late payments towards EPF and ESI u/s 36(1)(va) before furnishing the return of income under section 139(1) - HELD THAT - Since the facts involved in the present case are identical to the facts involved in the case of Mohangarh Engineers and Construction Company 2021 (8) TMI 563 - ITAT JODHPUR and in the case of Bikaner Ceramics Private Limited, Bikaner 2021 (9) TMI 1319 - ITAT JODHPUR . So respectfully following the aforesaid referred to order, the disallowances sustained by the Ld. CIT(A) are deleted.

Summary

Issues Involved:
1. Jurisdiction and statutory reasons for quashing the impugned order.
2. Addition of ?1,84,880 on account of contribution to PF/ESI.
3. Condonation of delay in filing the appeal.

Issue-wise Detailed Analysis:

1. Jurisdiction and Statutory Reasons for Quashing the Impugned Order:
The assessee challenged the order dated 16.10.2019 passed by the CPC under section 143(1) of the Income Tax Act, 1961, claiming it was "bad in law and on the facts of the case, for want of jurisdiction and various other statutory reasons." The appellant sought the quashing of the impugned additions made therein. However, the judgment primarily focused on the condonation of delay and the disallowance of contributions to PF/ESI, without delving deeply into the jurisdictional issues.

2. Addition of ?1,84,880 on Account of Contribution to PF/ESI:
The core issue was the addition of ?1,84,880 made by the Assessing Officer (A.O.) due to late payments towards EPF and ESI under section 36(1)(va) of the Income Tax Act, 1961. The assessee contended that these payments were made before the filing of the return of income under section 139(1) of the Act. The Tribunal noted that similar issues had been adjudicated by various ITAT benches, including the ITAT Jodhpur Bench, which held that contributions made before the filing of the return should not be disallowed. The Tribunal cited several cases, including the ITAT Kolkata Bench's decision in Harendra Nath Biswas vs. DCIT and the ITAT Hyderabad Bench's decision in Salzgitter Hydraulics Private Ltd vs. ITO, which supported the assessee's position. The Tribunal concluded that the impugned additions made by the A.O. and sustained by the CIT(A) were to be deleted, as the contributions were made before the due date for filing the return.

3. Condonation of Delay in Filing the Appeal:
The appeal was filed 21 days late due to the COVID-19 pandemic. The assessee referenced various Supreme Court orders extending the period of limitation due to the pandemic. The Tribunal, acknowledging the unprecedented circumstances and the Supreme Court's directives, condoned the delay, stating that it was beyond the control of the assessee. Consequently, the appeal was admitted.

Conclusion:
The Tribunal allowed the appeal, deleting the disallowance of ?1,84,880 for late PF/ESI contributions, as these were made before the return filing deadline. The delay in filing the appeal was condoned due to the pandemic, following the Supreme Court's orders.