TaxTMI 
TaxTMI 
2022 (5) TMI 1427
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....he assessee. Against this Intimation u/s 143(1), the assessee submitted an application for rectification u/s 154 of the Act to the Ld. AO. The Ld. AO, however, passed order of rectification on 17.12.2018 whereby the application filed by the assessee was rejected. Being aggrieved by this order of rectification u/s 154, the assesse filed appeal to Ld. CIT(A). The Ld. CIT(A), however, dismissed the appeal of assessee in limine. Against the order of Ld. CIT(A), the assessee has filed this appeal and now before us. GROUNDS: 3. The assessee has raised following Grounds: 1. That impugned order passed by the National Faceless Appeal Centre, Delhi is bad in law, without jurisdiction, it is based on incorrect interpretation of law and without allowing proper and reasonable opportunity of being heard, moreover the facts have also been incorrectly construed. 2. That on the facts and in the circumstances of case and in law, the National Faceless Appeal Centre, Delhi erred in rejecting appeal filed by the assessee summarily by stating that appellant has not filed appeal against intimation order u/s 143(1) and tried to take back door entry by filing appeal against order u/s 154 for which ....
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....t of TDS of Rs. 60,49,627/-. Though the assessee did not file any appeal against this Intimation u/s 143(1), an application for rectification u/s 154 of the Act was filed to the Ld. AO within the time permissible u/s 154 of the Act for seeking redressal of the grievances arising out of the two adjustments made by Ld. AO. However, the Ld. AO rejected the application filed by the assessee. Being aggrieved by rejection, the assessee filed appeal to Ld. CIT(A) and technically such appeal happened to be against the order of rectification u/s 154 and not against the original Intimation u/s 143(1). The Ld. CIT(A) dismissed the appeal of assessee in limine by observing in Para No. 5 to 6 of his order as under: "5. It is pertinent to mention here that the appeal is not against the intimation order u/s 143(1). The appellant had filed an application u/s 154 before CPC. Thereafter, the CPC had passed order u/s 154 rejecting the request of the appellant for rectification of the mistake. It is against this order, the appellant has filed the present appeal. The original cause of action arises at the stage of 143(1) itself when the CPC had processed the return of income. Thereafter, the appellan....
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....heme of the Act. With these submissions the Ld. AR prayed that the lower authorities be directed to accept the claim of assessee on merit, in accordance with the decision of this Bench on the subsequent Grounds. 8. Per contra, the Ld. DR submitted that the assessee has not filed any appeal against the Intimation u/s 143(1), which necessarily should have been filed. According to Ld. DR, the assessee filed rectification-application u/s 154 against the Intimation u/s 143(1) and thereafter carried the matter to Ld. CIT(A) when the rectification-application itself was rejected. The Ld. DR submitted that this route adopted by the assessee was not permissible in the issues involved and therefore the Ld. CIT(A) was justified in dismissing the appeal of assessee in limine. With these submissions, the Ld. DR prayed to uphold the order of Ld. CIT(A). 9. We have considered the rival submissions of both sides and also perused the record. We are very much aware of the recent decision of ITAT, Jodhpur Bench in the case of Akbar Mohammad, Nagaur Vs. ACIT, CPC, Bangalore ITA No. 108 & 109/Jodh/2021 order dated 31.01.2012 in which the Hon'ble Co-ordinate Bench had resolved an identical controversy....
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....o squarely covered in favour of the assessee by decision of this very Bench of ITAT in the case of Nataraj Dal Mill, Indore vs. ACIT ITA No. 153/IND/2021 order dated 06.12.2021. The Ld. AR also submitted that even otherwise the impugned disallowance is debatable in nature and outside the scope of section 143(1)(iv) of the Act invoked by the Ld. AO and therefore also not sustainable, as held by ITAT, Visakhapatnam Bench in M/s. S.V. Engineering Constructions India (P) Limited vs. DCIT (ITA No.130/Viz/2021) order dated 23.09.2021. With these submissions, the Ld. AR prayed that the disallowance made by Ld. AO is illegal and deserves to be deleted. 13. Per contra, the Ld. DR relied upon the orders of lower authorities. He further submitted that in following decisions it has been held that once the employees' contributions are paid after the due dates under PF / ESI laws, disallowance is attracted even if the assessee has made payments within the time allowed u/s 43B i.e. upto the due date u/s 139(1) for filing of return: (a) Hon'ble Gujarat High Court in CIT vs. Gujarat State Road Transport Corporation, (2014) 41 taxmann.com 100 (b) Hon'ble Gujarat High Court in Pr. CIT vs. M/s....
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.... there is no dispute on this point by revenue. Regarding the decisions relied upon by both sides, we observe that there are divergent views of Hon'ble High Courts on the allowability of employees' contributions to PF / ESI paid after due dates under the PF / ESI laws but within the time allowed u/s 43B. While the Ld. AR has relied upon various decisions favouring to the assessee, the Ld. DR has quoted the decisions against the assessee. We are also informed by both sides that there is no decision of Hon'ble jurisdictional High Court of Madhya Pradesh on this issue. In this situation, we are mindful of the decision in Vegetable Products Ltd. 88 ITR 192 wherein the Hon'ble Supreme Court has held that if two reasonable constructions of a taxing provision are possible, that construction which favours the assessee must be adopted. In view of this, the decisions favouring the assessee shall get preference over the decisions against the assessee. Being so we hold that the employees contributions paid after due date under PF / ESI law but within the time allowed u/s 43B, are allowable as deduction. Regarding the amendments made through Finance Act, 2021, it is specifically mentioned by t....
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....isallowing the claim of the assessee. We therefore accept this Ground of assessee and direct the Ld. AO to make suitable rectification by deleting the disallowance. Therefore, Ground No. 3(a) is allowed for statistical purpose. GROUND No. 3(b): 17. In this Ground, the issue involved is related to the credit of TDS amounting to Rs. 60,49,627/-. 18. Before us, the Ld. AR has made a detailed submission on Page No. 6 to 9 of the Written-Submission. The Ld. AR has presented a lengthy reconciliation of the Gross-Receipts and TDS as per books of account and Form 26AS of assessment-year 2017-18 and 2018-19. We are not reproducing the same for the sake of brevity but the crux of the submission is that although the payers have deducted TDS in the financial year relevant to the assessment-year 2018-19, the assessee has offered the relevant income in the assessment-year 2017-18 as per regular method of accounting and therefore claimed the credit of TDS in the assessment-year 2017-18 which is very much correct and allowable in accordance with the following provision of section 199: "199. (1) Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Cen....