2026 (4) TMI 98

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.... 1, Vadodara (the learned CIT - A) dated 5 November 2024 wherein the assessee filed an appeal against the intimation issued under section 143 (1) of THE INCOME TAX ACT [THE ACT] dated 12 May 2020 by THE CENTRAL PROCESSING CENTRE, BANGALORE [ the ld AO ] making an adjustment to the total income of the assessee under section 43B of the Act of Rs. 5,704,306 and further the disallowance of sum received from employees as contribution to the provident fund etc. under section 36 (1) (va) of the act of Rs. 3,238,115/-, was partly allowed deleting the addition of Rs. 5,704,306 and confirming the adjustment of employees' provident fund of Rs. 32,38,115/-. 2. Therefore, the assessee is in appeal before us, and the solitary ground of appeal is w....

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.... made. The learned CIT - A held that the checkmate services private limited versus Commissioner of income tax [sc] delivered on 12 October 2022 by the honourable Supreme Court covers the issue against the assessee and further after that the honourable Gujarat High Court in case (2023) 150 taxmann.com 384 (Gujarat) also confirmed the disallowance under section 36 (1) (va) made in intimation issued under section 143 (1) of the act, was upheld. He further referred to the several judicial precedents and also negated the contention of the assessee that insertion of the words "increase in income" in section 143 (1) (a) (iv) with effect from 1/4/ 2021 will have no impact on such disallowances. Accordingly, he confirmed the addition made by the cen....

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....416 (SC)/[2009] 319 ITR 306 (SC)/[2009] 227 CTR 417 (SC)[25-11-2009] [3] Commissioner of Income-tax vs. ANZ Information Technology (P.) Ltd. [2010] 189 Taxman 391 (Karnataka)/[2009] 318 ITR 123 (Karnataka)[15- 09-2009] and [4] Essae Teraoka (P.) Ltd. vs. Deputy Commissioner of Income-tax, Circle -11(3) [2014] 43 taxmann.com 33 (Karnataka)/[2014] 222 Taxman 170 (Karnataka) (MAG)/[2014] 366 ITR 408 (Karnataka)/[2014] 266 CTR 246 (Karnataka)[04-02-2014]. If those decisions are applied the above sum would not have been disallowed under the jurisdiction of Honourable Karnataka High court. However, it is an undisputed fact that the central processing Centre has made that adjustment under the provisions of section 143 (1) (a) (iv) of the act despi....

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....s, we do not find it necessary to discuss further the issue and allow the claim of the assessee holding that no disallowance could have been made by the CPC prior to 12 October 2022 (the date on which the honourable Supreme Court delivered the verdict in case of checkmate services) invoking the provisions of section 36 (1) (va) of the act as on that date issue was covered in favour of the assessee by a jurisdictional high court decision. 14. In view of the above, ground No. 1 and 2 of the appeal are allowed. 15. Ground No. 3 with respect to the levy of interest under section 234B and ground No. 4 against the levy of interest under section 234C of the act are consequential in nature and therefore dismissed. 16. In the result, the ap....