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TMI Blog2023 (9) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... and replies filed in response to notice issue u/s 142(1) of the Act, therefore order passed by the assessing officer is neither erroneous nor prejudicial to the interest of revenue, hence we allow this issue of the assessee. Late payment of PF ESI - We note that this issue is covered against the assessee by the judgment of the Hon`ble Supreme Court in the case of CHECKMATE SERVICES P. LTD [2022 (10) TMI 617 - Supreme Court] Therefore, we dismiss this ground of assessee. Claim of service tax expense - We note that as per the Provisions of Service tax Act, assessee had paid service tax under reverse charge mechanism and 0.5 % of Swatchh Bharat Abhiyan and 0.5 % of Krishi Kalyan Cess, out of total service tax was claimed, as expenditure and remaining portion of service tax @ 14% was set off against the amount payable. Therefore the AO has rightly allowed the claim of Service tax Expense, hence we allow this ground of assessee. Claim of interest on TDS - We note that issue before us for interest component and not the TDS. We find merit in the submission of ld Counsel to the effect that the amount of TDS is not income tax for the assessee but it is the amount of income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 263 of the Income tax Act, 1961, in the matter of assessment under section 143(3) of the Act for the assessment year 2018-19, on the following grounds: 1. On the facts and in circumstances of the case as well as law on the subject, the learned Pr. CIT has erred in passing the order u/s. 263, although the assessment order passed u/s. 143(3) of the I. T. Act, 1961 was neither erroneous nor prejudicial to the interest of the revenue. 2. On the facts and in circumstances of the case as well as law on the subject, the learned Pr. CIT has erred in setting aside the order passed u/s. 143(3) with a direction to the assessing officer to pass fresh assessment order after taking into consideration, the issues as may have already been considered together with the issues discussed in order. Accordingly, PCIT has erred in setting with the issues discussed in order. Accordingly, PCIT has erred in setting aside the assessment order making it wide open instead of restricting the issues raised in the show cause notice. 3. On the facts and in circumstances of the case as well as law on the subject, the learned Pr. CIT has erred in holding that the amount of Rs. 3,85,407/- being addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. In absence of any documentary evidences available in the ITBA portal, the same needs to be disallowed. 4. Further, it was noticed by ld PCIT from the Form 3CB Col. 20(b), that the following PF and ESI contributions received from employees have not been deposited within the due dates: PF Employee Contribution (In Rs. ) Due Date of payment Actual Date of payment 3313 15.05.2017 25.05.2017 4143 15.06.2017 20.06.2017 4187 15.07.2017 19.07.2017 4504 15.08.2017 24.08.2017 4340 15.09.2017 05.10.2017 4329 15.10.2017 17.10.2017 4161 15.11.2017 21.11.2017 4342 15.12.2017 18.12.2017 4405 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and held that while finalizing the assessment proceedings, the assessing officer (AO) has not inquired/verified the issues as discussed above, for the year under consideration, which reflects non-application of mind by the Assessing Officer. Thus, the assessment order passed u/s 143(3) r.w.s. 143(3A) 143(38) of the Act, dated 30.03.2021 was treated by ld PCIT to be erroneous in so far as it is prejudicial to the interest of the Revenue. 9. Aggrieved by the order of ld PCIT, the assessee is in appeal before us. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. PCIT and other material brought on record. We note that assessee has submitted the following documents and evidences before us, Viz: (i) Tax Audit report, dated 01.09.2018 (vide Pb.1 to 20), (ii) Audit Report along with the audited financial statements, dated 02.09.2018 (vide Pb.21 to 47), (iii) Acknowledgment of Return of Income along with computation of Total income for AY 2018-19, dated 17.11.2018 (vide Pb.48 to 52), (iv) Notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss out of total service tax was claimed as expenditure and remaining portion of service tax @ 14% was set off against the amount payable. The assessee has contended that the AO has rightly allowed the claim of Service tax Expense. 13. On the issue of claim of interest on TDS of Rs. 194/-, the ld Counsel has contended that the said expenditure was incurred by the assessee wholly and exclusively for the purpose of carrying on the business and as per section 37(1) of the Act, only such expenditure which are incurred in connection with business and offence for an illegal act or breach of law or prohibition of law are alone not allowable and in other cases and more particularly in this case, the interest in respect of TDS was only in the nature of compensation of revenue to the Government of late payment of TDS. It was further submitted that the amount of TDS is not income tax for the assessee but it is the amount of income tax deducted and paid by the assessee on behalf of the third party. Thus, it is not a payment of income tax, the said expenditure incurred by the assessee is wholly and exclusively for the purpose of business and the delay in making payment of TDS late is not like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness and the delay in making payment of TDS late, is not like a penalty, and it does not amount to payment for breach of law or illegal act or prohibited act, therefore we allow this ground raised by the assessee. 19. The judicial precedent laid down by the Hon ble Apex Court in Malabar Industries Ltd. vs. CIT [2000] 243 ITR 83(SC) wherein their Lordship have held that twin conditions needs to be satisfied before exercising revisional jurisdiction u/s 263 of the Act by the PCIT. The twin conditions are that the order of the Assessing Officer must be erroneous and so far as prejudicial to the interest of the Revenue. In the following circumstances, the order of the AO can be held to be erroneous order, that is (i) if the Assessing Officer s order was passed on incorrect assumption of fact; or (ii) incorrect application of law; or (iii)Assessing Officer s order is in violation of the principle of natural justice; or (iv) if the order is passed by the Assessing Officer without application of mind; (v) if the AO has not investigated the issue before him; then the order passed by the Assessing Officer can be termed as erroneous order. Coming next to the second limb, which is required ..... X X X X Extracts X X X X X X X X Extracts X X X X
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