The Income Tax Appellate Tribunal (ITAT), Mumbai bench consisting of Prashant Maharishi, Accountant Member and Kavitha Rajagopal, Judicial Member set aside disallowance made by Assessing Officer (AO) on the ground that late deposit of employees contribution of PF but before the due date of filing of return of income.
The assessee, Global Waste Management Cell Pvt. Ltd. made a company engaged in the business of transportation of solid waste management. For Assessment Year 2017-18, it filed its return of income at Rs.4,38,53,460/-. The above return was processed and the order of intimation under section 143(1) of the income tax Act, 1961 by Central Processing Centre, Bangalore disallowing the employees’ contribution of Rs.2,94,92,315/- under section 36 (1) (va) of the Act due to late remittance. The assessee preferred before the National Faceless Centre, wherein the above disallowance was confirmed. The Commissioner of Income Tax (CIT) referred to the relevant statutory provisions and CBDT, and also the amendment by the Finance Act, 2021, which clarified the above position. Further, the decision of the Hon’ble Kerala High Court in the case of CIT vs. M/s. Merchem ltd. was also followed. Hence, the disallowance made by CPC was confirmed by the CIT.
The Tribunal said “We find that though there is an inconsistency in the details submitted in form number 3 CD by the assessee of the due date as prescribed in respective provident fund law now assessee is claiming that such due date for payment should be the due date of filing of the return of income, which is also supported by the decision of the jurisdictional High Court, we find that such adjustment cannot be made by the central processing unit. Thus, in the present case, the initiation of adjustment by invoking the provisions of Section 143 (1) (iv) was proper but the adjustment in view of the decision of the honourable jurisdictional High Court covering the issue in favour of the assessee is not proper.
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