2022 (9) TMI 1516

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....ocessing Center, Bengaluru for the relevant Assessment Year 2018-19 vide intimation dated 24.11.2019 u/s. 143(1) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The first issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the A.O in disallowing the claim of deduction of ESI and PF claimed u/s. 36(1)(va) of the Act. 3. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the assessee has remitted the employees contribution to PF and ESI amounting to Rs. 5,15,978/- after the due date as prescribed under the respective statutes i.e., Provident Fund Act and ESI Act. The A.O while processing return u/s. 143(1) of the Act made a disall....

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....ome is Rs. 12,78,000/-. The assessee explained before us that the difference of Rs. 8,24,846/- has been added by the A.O while processing return of income u/s. 143(1) of the Act. The Ld. counsel for the assessee explained the entire particulars as under: Particulars Financial statement reference Amount (in INR) Treatment in ITR Disclosure in TAR Gratuity provision created in FY 2017-18 (disclosed as employee benefit expense in statement of profit and loss account) Note 19 in page No. 13 of financial statement, page No. 90 of the paperbook 9,626,816 Disallowed in ITR under SI, No. 9(c) (Refer page No. 30 of the ITR, page No. 30 of the paperbook) pertaining to disallowance of gratuity provision under section 40A(7)(....

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....eting the scrutiny assessment u/s. 143(3) of the Act by the A.O vide order dated 27.08.2021, which is enclosed in assessee's paper book at Page Nos.77 to 79. 8. On the other hand, the Ld. Sr. A.R filed his objections, which are reproduced as it is as under: "The counsel for the assessee has, during the hearing, projected a picture that the Departmental return processing system (CPC) has committed a grave error by not adhering to the law by carrying out un-wanted adjustments to the companies returned income while processing its return. Also the Commissioner of Income tax (Appeal) has also erred in upholding such actions of the CPC. The assessee failed to appreciate that Departmental return processing system (CPC) is a fu....

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.... report is a subset of a return and any return without accompanied by the tax audit report is subject to be treated as invalid return u/s 139(9) of Income Tax Act-1961 read with Rule-12 of the Income Tax Rules-1962. Hence, Department submits that such appeal should not be entertained and taxpayers made responsible and pay for their deeds of omissions and commissions. At the most, the assessee should have filed a mercy plea before the CBDT u/s 119(2)(b) accepting its mistake and seeking a relief instead of pointed out fingers on the Departmental applications and e-governance process implemented for betterment and ease of business of general law abiding public." 9. After hearing both the sides and going through the facts that the ....

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.... year as per s. 40A(7) r/w s. 37 of the Act and the same was disclosed at Sr. No.10B of the ITR i.e., Page No.30 of ITR u/s. 43B of the Act in the absence of specific field for disclosure in the ITR. It was claimed that the payment made for gratuity during the A.Y 2017-18 was not disclosed in the tax audit report in the clause for reporting as per s. 43B of the Act. We are of the view that this position led to inconsistency in the column as per ITR and the tax audit report that the amount disallowed u/s. 43B of the Act in any preceding previous year, but allowable during the previous year. The assessee also submitted that the additional evidence before us along with supporting documentary evidences i.e., extract from the books of accounts t....