Appeal partially allowed, relief granted for Provident Fund disallowance under section 43B. Tribunal criticizes lower authorities.

The Tribunal partially allowed the appeal, deleting the disallowance of Rs. 2,10,005/- under section 43B towards Provident Fund, as the timely payment was proven. The disallowance of Rs. 36,609/- was upheld. The Tribunal criticized the lower authorities for not properly considering evidence and highlighted procedural issues regarding grounds of appeal. The decision was in favor of the assessee, with relief granted for the excessive disallowance.

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Issues Involved:

1. Sustaining addition of Rs. 2,46,614/- under section 43B towards Provident Fund.
2. Consideration of facts by the Commissioner of Income Tax (Appeals), NFAC.
3. Relief entitlement for the assessee.
4. Excessiveness of the addition made.
5. Procedural issues regarding grounds of appeal.

Summary:

1. Sustaining Addition of Rs. 2,46,614/- under Section 43B:
The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi erred in sustaining the addition of Rs. 2,46,614/- under section 43B of the Income Tax Act, 1961 towards Provident Fund. The assessee contended that out of the total disallowed amount, Rs. 2,10,005/- was incorrectly reported as late payment by the auditors, and Rs. 36,609/- was paid before the due date for filing the return under section 139(1). The Tribunal observed that the assessee had submitted sufficient documentary evidence to prove timely payment of Rs. 2,10,005/-, which was not disputed by the revenue. Thus, the Tribunal deleted the disallowance of Rs. 2,10,005/-.

2. Consideration of Facts by the Commissioner of Income Tax (Appeals), NFAC:
The Tribunal noted that the lower authorities, including the Commissioner of Income Tax (Appeals), did not properly consider the evidence provided by the assessee regarding the timely payment of Rs. 2,10,005/-. The Tribunal emphasized that the provisions of section 2(24)(x) read with section 36(1)(va) did not warrant disallowance for this amount, and the disallowance was made due to a reporting mistake by the auditors.

3. Relief Entitlement for the Assessee:
The assessee argued for relief, stating that the disallowance was excessive and unjustified. The Tribunal partially allowed the appeal, granting relief for the disallowed amount of Rs. 2,10,005/-.

4. Excessiveness of the Addition Made:
The Tribunal found that the addition made was excessive to the extent of Rs. 2,10,005/-, which was paid within the due dates under PF/ESI laws. The Tribunal upheld the disallowance of Rs. 36,609/-, which was paid after the due date under PF/ESI laws but before the due date for filing the return under section 139(1), following the decision of the Hon'ble Supreme Court in Checkmate Services (P.) Ltd.

5. Procedural Issues Regarding Grounds of Appeal:
The Tribunal noted that the assessee had the right to add, alter, or amend any grounds of appeal as necessary. The Tribunal proceeded with the hearing in the absence of the assessee, as the notice sent by the registry was returned with the remark "left."

Conclusion:
The appeal of the assessee was partly allowed, with the disallowance of Rs. 2,10,005/- deleted and the disallowance of Rs. 36,609/- upheld. The order was pronounced on 13/03/2023.

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