2023 (1) TMI 1371 - AT - Income Tax

Tribunal Orders Fresh Hearing on Tax Disallowances; Allows Assessee to Present New Legal Grounds on ESI and PF Issues.

M/s A Infrastructure Limited Versus DCIT, CPC, ACIT, CPC, Asst. Director of Income Tax, CPC, Bengaluru.

M/s A Infrastructure Limited Versus DCIT, CPC, ACIT, CPC, Asst. Director of Income Tax, CPC, Bengaluru. - TMI Issues:- Validity of order u/s 143(1) and rejection of order u/s 154- Addition outside the preview of section 143(1) of the Act- Sustaining addition made by the AO u/s 154 contrary to provisions of the law- Disallowance of contribution to ESI & PF- Restoration of all issues to the file of the AO for fresh hearingAnalysis:1. Validity of Orders: The assessee challenged the validity of the order u/s 143(1) and the rejection of the order u/s 154 by the CIT/NFAC. The grounds raised included errors in upholding the orders passed by the Assessing Officer. The Tribunal noted the legal contentions raised by the assessee and decided to restore all issues to the file of the AO for further examination, providing the assessee with an opportunity to present additional legal grounds.2. Addition Outside Section 143(1): The CIT/NFAC confirmed disallowance made u/s 143(1) due to the assessee's failure to pay employee's contribution towards ESI and PF within the prescribed due dates. The Tribunal considered the submissions made during the hearing, where the assessee argued against the addition of Rs. 10,51,408, emphasizing discrepancies in the computation of total income. The Tribunal allowed the appeal for statistical purposes, directing a fresh hearing and verification by the AO.3. Sustaining Addition Contrary to Law: The Tribunal addressed the issue of sustaining additions made by the AO u/s 154, which were deemed contrary to provisions of the law. The assessee's contentions regarding the legality of the additions were considered, leading to the decision to set aside the order of the CIT/NFAC and restore all issues to the AO for re-examination.4. Disallowance of Contribution to ESI & PF: The Tribunal specifically discussed the disallowance of Rs. 10,51,408 in respect of delayed payment of employee contributions towards PF and ESI. The arguments presented by both parties were taken into account, with the Tribunal ultimately allowing the appeal for statistical purposes and ordering a fresh hearing by the AO.5. Restoration of Issues for Fresh Hearing: In light of the commonality of issues in multiple appeals, the Tribunal decided to apply its findings and directions from one appeal to others with identical facts and circumstances. The appeals of the assessee were allowed for statistical purposes, emphasizing the need for a fresh examination of all issues by the AO.This comprehensive analysis highlights the key legal issues addressed in the judgment, outlining the Tribunal's decisions and directions for each issue involved in the appeals filed by the assessee.