2022 (5) TMI 357 - AT - Income Tax

Tribunal emphasizes thorough consideration in loss determination, deferred tax treatment, and EPF verification.

Arinna Lifesciences Private Limited Versus Income Tax Officer, Ward – 1 (1) (2), Ahmedabad

The Tribunal remitted the matter back to the CIT(A) for proper consideration of loss determination and deferred tax treatment, emphasizing the need for ... Taxability on Deferred Tax provided - CIT(A)-1 not adjudicating Ground No.1 viz.Deferred Tax provided is not income liable to tax and therefore loss determined - HELD THAT:- Even the learned DR has not been able to dispute this position which is clearly evident from the record. We, therefore, remit this matter back to the learned CIT(A) with the direction to consider and decide the issue raised by the assessee specifically in Ground No.1 after considering the written submission and paper-book already filed by the assessee and after giving the assessee a proper and reasonable opportunity of being heard. Ground Nos. 1 & 2 of the assessee’s appeal are accordingly treated as allowed for statistical purposes. Delayed Employee PF contribution - DR has contended that this claim, specifically made by the assessee for the first time before the Tribunal, requires verification by the Assessing Officer - HELD THAT:- We find merit in this contention of the learned DR. The impugned order of the learned CIT(A) on this issue is accordingly set aside and the matter is restored to the file of the Assessing Officer for the limited purposes of verifying the claim of the assessee that the payments in question towards Employees’ Provident Funds having been made within the grace period allowed under the relevant Act, there was no delay in the said payment and the disallowance is not called for. Ground No.3 of the assessee’s appeal is accordingly treated as allowed for statistical purposes. Issues:1. Adjudication of loss determination and deferred tax treatment.2. Addition of Employee Provident Fund under section 2(24)(x).Adjudication of Loss Determination and Deferred Tax Treatment:The appeal raised concerns regarding the determination of loss and the treatment of deferred tax. The CIT(A) did not adjudicate Ground No.1, which specifically addressed the loss determination and deferred tax treatment. The Tribunal remitted the matter back to the CIT(A) to consider and decide the issue after reviewing the written submissions and paper-book filed by the assessee. The Tribunal found that the issue was not adequately addressed by the CIT(A) and directed a proper consideration of the matter. Ground Nos. 1 & 2 of the assessee's appeal were treated as allowed for statistical purposes, emphasizing the need for a thorough examination of the issue.Addition of Employee Provident Fund under Section 2(24)(x):Regarding the disallowance made by the Assessing Officer and confirmed by the CIT(A) concerning belated payment of Employees' Provident Fund, the Tribunal addressed the issue. The counsel for the assessee argued that all payments were made within the grace period allowed under the Employees' Provident Funds Act, making the disallowance unjustified. The counsel highlighted the withdrawal of the grace period concession from February 2016, clarifying that the benefit was available during the relevant period of FY 2013-14. The Tribunal acknowledged the need for verification by the Assessing Officer on this matter, setting aside the CIT(A)'s decision and restoring the issue for verification. Ground No.3 of the assessee's appeal was treated as allowed for statistical purposes, emphasizing the importance of verifying the claim regarding the timely payments under the Act.In conclusion, the Tribunal's judgment addressed the issues raised by the assessee concerning loss determination, deferred tax treatment, and the addition of Employee Provident Fund under section 2(24)(x). The Tribunal emphasized the necessity for a thorough consideration of the issues and directed proper verification and decision-making processes to ensure a just outcome.