TaxTMI 
TaxTMI 
2024 (6) TMI 1610
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....see drew our attention to legal ground raised by the assessee challenging the impugned action of the Ld.PCIT issuing notice and consequently passing an order dated 28.03.2023 for AY 2018-19 as bad in law because it was passed after the moratorium as well as the order of the Ld.NCLT dated 20.01.2020 approving the resolution plan. The Ld.AR brought to our notice that the facts related to this legal issue and submitted that pursuant to the Financial Creditor (Union Bank of India) approaching/filing application dated 01.11.2018 before the Hon'ble NCLT, Chennai against the assessee (M/s.Empee Distilleries Ltd.), the Hon'ble NCLT ordered insolvency proceedings under the Insolvency & Bankruptcy Code, 2016 (hereinafter in short 'the Code') and cons....
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....on to ESI/PF before filing of return of income (RoI) and the AO accepted the contention after verification, which action of the AO cannot be termed as erroneous because prior to the Hon'ble Supreme Court order in the case of M/s.Checkmate Services P. Ltd., [in Civil Appeal No.2883 of 2016 order dated 12.10.2022], the position of law as laid by the Hon'ble High Court of Madras on this issue was that if an assessee remit the employee's contribution of PF/ESI before due date of filing of RoI u/s. 139(1), then no disallowance is warranted. Therefore, action of the AO cannot held to be erroneous and for such a proposition relied on the decision of the Hon'ble Calcutta High Court order in the case of PCIT vs M/s. SPPL Properties Management Pvt Lt....
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....law; (ii) Assessing Officer's order is in violation of the principles of natural justice; (iii) if the AO's order is passed without application of mind; or (iv) if the AO has not investigated the issue before him. In the circumstances enumerated above only the order passed by the Assessing Officer can be termed as erroneous for the purpose of S.263 of the Act. Coming next to the second limb, the AO's erroneous order can be revised by the Ld. CIT only when it is shown that the said order is prejudicial to the interest of Revenue. When this aspect is examined one has to understand what is prejudicial to the interest of the revenue. The Hon'ble Supreme Court in the case of Malabar Industries (supra) held that this phrase i.e. "....
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.....22/2015 has clarified 'employees' contribution to welfare fund' can be claimed as deduction if it is paid before the due date specified u/s. 139(1) of the Act and this is not applicable to employees' contribution". Accordingly, the PCIT was of the view that contribution of Rs. 58,34,599/- received from the employees' towards PF/ESI which were beyond due date needs to be disallowed and requires to be added as total income of the assessee and since, the AO has failed to verify this aspect while completing the scrutiny assessment dated 19.03.2021 (u/s.143(3) of the Act) has allowed the assessee's claim of deduction of Rs. 58,34,599/- which action was erroneous and prejudicial to the interest of Revenue. 6. The aforesaid assertion of the PC....
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....A(7) Part A OI 9 (c) 21 (e) 16,05,338 3 Sum referred to section 438 which was not Paid on or before the due date for furnishing the return Part A OI 11(h) 26(1)(8)(b) 3,16,73,272 Disallowance of employee contributions due to delay in remittance with respective departments have not been made provided the same is paid on or before the 139(1) due date (or) date of filing the return whichever is earlier. References Invited to the decision of Honourable Madras High Court in the case of CIT vs. Industrial Security and Intelligence India Private Limited"; Honourable Delhi High Court in the case of CIT vs AIMIL Limited"; Honourable Rajasthan High Court in the case of "CIT vs Jaipur Vidyut Vitran Nigam Limited"; and ....