2026 (1) TMI 740

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.... Assessment Year 2019-20. 2. The assessee has raised the following grounds of appeal: 1. That action of CPC/ADDL/JCIT (A) KOLKATTA in upholding the addition under S.36(1)(va) for Rs. 12,81,710 made under S.143(1)/154 processed by CPC 21-02-2020 and 12-05-2020 without appreciating the facts that provision under S.36(1)(va) PF and ESI is not applicable to the appellant as appellant not having single employee only part-time accountant therefore action of both the lower authorities is unjust, illegal, arbitrary, illusory and deserves to be deleted. 2. That action of CPC/ADDL/JCIT (A) KOLKATTA has erred in law and upholding the addition of Rs. 12,81,710 made under S.154 dated 24- 06-2020 ignoring the original physical Audit ....

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....got her accounts audited by a Chartered Accountant and prepared and e-filed the tax audit report (TAR) in Form 3CD. In the said TAR, an amount of Rs. 12,81,713/- was shown as collected from employees towards ESI and PF but reported as deposit after the due dates specified in the respective ESI and PF Acts. In view of the same, AO, CPC first added this amount to total income u/s 36(1)(va) of the I.T. Act while processing the return u/s 143(1) and on request for rectification by the appellant again did the same in the order u/s 154. As far as CPC's action is concerned, it was justified since the said adjustment was made u/s 143(1)(a)(iv) of the Act due to mismatch in facts and figures reported in TAR and ITR. On the other hand, appellant ....

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....w in appeal before the Tribunal. 6. Before us, the Ld. AR submitted that the assessee is a senior citizen lady engaged only in share trading and speculative transactions. The Ld. AR contended that that the assessee did not have any employees except a parttime accountant receiving Rs. 32,500/-; hence, PF/ESI laws were not applicable, and no PF/ESI was deducted or collected. It was also submitted that the details of another client's PF/ESI were mistakenly uploaded in Form 3CD due to a software or staff error while using "Spectrum KDK Income Tax Audit Software"; however, immediately upon discovering the error, the CA revised Form 3CB/3CD on 13.07.2022 vide acknowledgment No. 798222930130722. The Ld. AR further submitted that the assessee co....