Employee PF ESIC contributions denied but section 80-IA deduction allowed after proper Form 10CCB filing

The ITAT Mumbai dismissed the assessee's appeal regarding delayed payment of employees' PF and ESIC contributions, following the SC decision in Checkmate Services Pvt. Ltd. However, the Tribunal allowed the assessee's claim for deduction under section 80-IA, finding that Form 10CCB was filed online on 11/06/2020 and referenced in the revised return filed on 22/07/2020. The CIT(A)'s reliance on coordinate bench decisions was held misplaced, and the Revenue's reliance on Wipro Ltd. was distinguished as it concerned different statutory provisions under section 10B(8).

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Issues Involved:
1. Disallowance under Section 80-IA of the Income Tax Act, 1961.
2. Disallowance of employee's contribution to provident fund and ESIC under Section 36(1)(va) of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Disallowance under Section 80-IA:
The assessee challenged the disallowance of a deduction claimed under Section 80-IA of the Income Tax Act, 1961, amounting to Rs. 75,94,111. The original return of income was filed on 28/11/2019, but the audit report in Form no.10CCB was not submitted along with it. The Centralised Processing Centre (CPC) disallowed the deduction in the intimation dated 05/06/2020 issued under Section 143(1) of the Act. The assessee subsequently filed the audit report on 11/06/2020 and a revised return on 22/07/2020, which was again processed by the CPC, disallowing the deduction on the same grounds. The CIT(A) upheld the disallowance, stating that the audit report was not filed with the original return.

The Tribunal examined whether the audit report in Form no.10CCB must be filed with the original return or if it can be filed with a revised return. Section 80-IA(7) of the Act requires the audit report to be furnished along with the return of income but does not specify that it must be the original return. The Tribunal referenced the case of Aquasub Engineering v/s DCIT, where it was held that a revised return filed within the due date under Section 139(5) is valid for claiming deductions. The Tribunal found that the assessee filed the audit report on 11/06/2020 and referenced it in the revised return filed on 22/07/2020. Therefore, the Tribunal concluded that the CIT(A) erred in upholding the disallowance and allowed the deduction under Section 80-IA.

2. Disallowance of Employee's Contribution to Provident Fund and ESIC:
The assessee also challenged the disallowance of Rs. 85,466 under Section 36(1)(va) of the Act for delayed payment of employees' contribution to provident fund and ESIC. The learned Authorised Representative conceded that this issue is covered by the Supreme Court's decision in Checkmate Services Pvt. Ltd. Vs. CIT, which upheld the disallowance for payments made beyond the prescribed due date under respective laws, even if paid within the due date of filing the return of income. Consequently, the Tribunal dismissed this ground of appeal.

Conclusion:
The Tribunal partly allowed the appeal, setting aside the disallowance under Section 80-IA and upholding the disallowance under Section 36(1)(va). The decision emphasized the validity of revised returns for claiming deductions if filed within the statutory period and reaffirmed the Supreme Court's stance on the timeliness of statutory contributions.

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