2025 (3) TMI 1562

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....ars 2018-19 and 2019-20. 2. Since issues raised in both the appeals are similar based on the same identical facts, with the consent of both the parties, we proceed to hear the appeals together and pass consolidated order for the sake of convenience. 3. The first common ground raised by the assessee in both the appeals is whether the first appellate authority is justified in confirming the disallowance of contribution to PF and ESIC for both the assessment years under consideration. 4. At the outset, we note that the CPC passed intimation under section 143(1) of the Income Tax Act, 1961 ["Act" in short] by making disallowance of Rs..3,23,84,312/- and Rs..5,76,85,234/- for the assessment years 2018-19 and 2019-20 being late payment o....

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....te Services P. Ltd. v. CIT (supra), relied on by the first appellate authority, is prospective in nature and since there was no specific direction in the judgement to apply retrospectively, the assessee is eligible to claim deduction of employees contribution to PF & ESIC, which was not remitted within the due date specified by the statute. 9. We have perused the decision in the case of M/s. Checkmate Services P. Ltd. v. CIT (supra) and noted that the Hon'ble Supreme Court has considered the issue of disallowance of belated remittances of employee's contribution to PF & ESI under section 36(1)(va) r.w.s. 2(24)(x) of the Act, and after considering relevant provisions and also by relying upon various judicial precedents held that in order ....

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....e Services Pvt. Ltd. v. CIT (supra) and confirmed the addition made by the CPC, Bengaluru. Thus, we find no infirmity in the impugned order and the ground raised by the assessee stands dismissed for both the assessment years under consideration. 12. The next common ground raised by the assessee is with regard to restriction of deduction under section 80JJAA of the Act. 13. Consequent upon the confirmation of disallowance of late payment of PF & ESIC of Rs..3,23,84,312/-, the first appellate authority enhanced the total income from business to Rs..5,98,08,044/- and the deduction under section 80JJAA of the Act has been restricted to Rs..4,16,35,521/-, which is 30% of total cost incurred of Rs..13,87,85,069/- as against the assessee's c....

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....ovided. Since the deduction under section 80JJAA of the Act is not limited to a single assessment year, but, is intended to be spread across three consecutive assessment years, the ld. AR of the assessee prayed for allowance of deduction under section 80JJAA of the Act for the assessment years under consideration. 16. On the other hand, the ld. DR fairly conceded that the matter may be remitted to the file of the Assessing Officer to verify and allow the deduction in accordance with law. 17. We have heard both the parties and perused the material available on record. We have also perused the relevant provisions of section 80JJAA of the Act and the same is reproduced as under for ready reference: 80JJAA(1)Where the gross total....