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M/s. Rukmini Polytubes Pvt. Ltd., X-22, Loha Mandi, Naraina, New Delhi Vs. The DCIT, CPC Bangalore
October, 13th 2021

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES “SMC-1” : DELHI
[THROUGH VIDEO CONFERENCING]

BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER

ITA.No.1855/Del./2020
Assessment Year 2018-2019

M/s. Rukmini Polytubes The DCIT, CPC
Pvt. Ltd., X-22, Loha
Mandi, Naraina, vs.
New Delhi – 110 028.
PAN AACCR8167Q Bangalore – 560 500

(Appellant) (Respondent)

For Assessee : Shri Suresh Kumar Gupta, CA
For Revenue : Shri Rajesh Kumar Dhanesta, Sr. DR

Date of Hearing : 29.07.2021
Date of Pronouncement : 13.10.2021

ORDER

This appeal filed by the Assessee is directed
against the Order dated 11.09.2020 of the Ld. CIT(A), Delhi-
7, relating to the A.Y. 2018-2019.

2. The assessee raised sole ground challenging the

order of the Ld. CIT(A) in sustaining the disallowance of

Rs.1,82,543/- made by the DCIT, CPC passed order under
2

ITA.No.1855/Del./2020 M/s. Rukmini
Polytubes P. Ltd., Delhi..

section 143(1) in respect of delayed payment of employees’

contribution to PF & ESI.

3. Facts of the case, in brief, are that the assessee is

a Private Limited Company engaged in the business of

manufacturing of PVC pipes and trading of PVC resin and

CPE and other products. It filed its return of income

declaring total income of Rs.24,92,370/- on 31.10.2018.

The DCIT, CPC, Bangalore in the intimation under section

143[1] of the I.T. Act, 1961 vide order dated 13.11.2019

determined the total income of the assessee at

Rs.33,40,680/- wherein he made addition of Rs.8,48,310/-

which includes delayed payment of employees’ contribution

to PF and ESI of Rs.61,539/-, disallowance under section

43(b) at Rs.1,82,543/- and difference in income/receipt at

Rs.6,04,227/-.

3.1. Aggrieved by the order of the DCIT, CPC,

Bangalore, the assessee preferred an appeal before the Ld.

CIT(A). Since the assessee did not press adjustment of

Rs.6,04,227/- before the Ld. CIT(A), the Ld. CIT(A)

dismissed the same.


3

ITA.No.1855/Del./2020 M/s. Rukmini
Polytubes P. Ltd., Delhi..

3.2. So far as the addition regarding belated payment

of PF and ESI of Rs.61,539/- is concerned, the Ld. CIT(A)

deleted the addition subject to verification of payment at the

end of the A.O. The Ld. CIT(A) also directed the A.O. to verify

the payments and if it is paid before the due date of filing

the return, it shall be allowed.

3.3. So far as the adjustment of Rs.6,04,227/- made

to the returned income regarding difference in income/

receipt credited in P & L A/c and with income considered

under the other heads of income is concerned, the Learned

Counsel for the Assessee submitted that rectification

application filed before the CPC with respect to adjustment

of Rs.6,04,227/- has been considered by the DCIT, CPC and

the DCIT, CPC deleted the addition. Therefore, the assessee

did not press this ground before the Ld. CIT(A). In view of

the above, the Ld. CIT(A) dismissed this ground of appeal.

3.4. So far as the disallowance of Rs.1,82,543/- made

under section 43B, the Ld. CIT(A) sustained the addition

made by the A.O. CPC on the ground that the disallowance
4

ITA.No.1855/Del./2020 M/s. Rukmini
Polytubes P. Ltd., Delhi..

of the same was based on the Report of the Auditor’s in

Form No.3CD.

4. Aggrieved by the order of the Ld. CIT(A) in

sustaining the addition of Rs.1,82,543 under section 43B of

the I.T. Act, the assessee is in appeal before the Tribunal by

raising the following grounds :

1. The Ld CIT(A) has erred in upholding addition of
Rs.1,82,543/- u/s 43B of IT Act ignoring the fact
that the above figure has been reported under
wrong column of Form 3CD and the above
statutory dues were duly paid before the date of
filling of return of income prescribed u/s 139(1) of
IT Act.

2. The appellant craves leave to add, delete, modify /
amend the above grounds of appeal with the
permission of the Hon’ble appellate authority.”

5. On Ground No.1, the Learned Counsel for the

Assessee submitted that the Tax Auditor in his report under

section 43B in Item No.26 has wrongly mentioned that the
5

ITA.No.1855/Del./2020 M/s. Rukmini
Polytubes P. Ltd., Delhi..

following items which are incorporated in previous year were

not paid on or before the aforesaid date. The Learned

Counsel for the Assessee drew our attention to the following

chart :

Nature of Amount Date of Remarks
Liability (in Rs.)
Provident Payment These items appear as part of accrued
38036 expense of Rs. 13,14,630/- shown in
Fund 14.04.2019 audited balance sheet in Note No.8(i)
“Other Current Liabilities (PB 36) and
(PB 91) the summary of above expenses are at
page 114 showing these outstanding
10.04.2018 liabilities highlighted in the said
summary chart. 1 Ledger account of
ESI 9788 (PB 103) PF/ESI Payable also placed at pages
115-116 where liability is accounted
Bonus 119623 30.06.2018 for after including other charges paid
payable (PB 109- at the 1 time of payment.
113)

GST 15096 16.04.2018 These amount is part of Duties and
(PB 108) taxes Payable of Rs.l,45,904/- shown
in audited balance sheet in Note
No.8(ii) “Other Current Liabilities (PB
36). The ledger accounts of payables
are at pages 117-121 showing the
above outstanding liability.

5.1. He submitted that from the perusal of the above

details shows that the date of payment against each other

item falls prior to the due date of filing of the return of

income under section 139(1) and, therefore, the above

report in the tax audit report is nothing, but, a mistake by

the Tax Auditor in choosing the correct Head of disclosure
6

ITA.No.1855/Del./2020 M/s. Rukmini
Polytubes P. Ltd., Delhi..

in Form No.3CD. He submitted that the correct head under
which the above has to be reported is in item No.26B(a) i.e.
under the heading “sum incurred in the previous year and
was paid on or before the due date of furnishing of return of
income of the previous year under section 139(1) of I.T. Act".
This fact of reporting the information in incorrect head can
be verified from perusal of the ledger account of the
amounts payable shown in the balance sheet under the
head and the ledger account of the above item in the next
financial year in which amounts have been paid before the
due date of filling of return supported with the payments
challans.

5.2. He accordingly submitted that the adjustment of

Rs.1,82,543/- is as a result of reporting of 43B payments

under wrong Heads although such reporting clearly shows

that it is a clerical mistake committed by the Tax Auditor

which could be rectified under section 154 being mistake

apparent from records by verifying the payments challans

submitted in the paper book.
7

ITA.No.1855/Del./2020 M/s. Rukmini
Polytubes P. Ltd., Delhi..

6. The Ld. D.R. on the other hand strongly

supported the order of the Ld. CIT(A) and submitted that

since the assessee has not made the deposits on account of

employees’ contribution to PF & ESI before the specified

dates as mentioned in the Statute, therefore, the Ld. CIT(A)

was fully justified in sustaining the addition made by the

CPC. He submitted that there are various decisions in

favour of the Revenue where the Hon’ble Courts have held

that the Amendment by Finance Act, 2015 in Section 43B is

restricted only in respect of employers contribution to PF &

ESI and if the same is paid on or before the due date of

filing of the income tax return under section 139(1), the

same is an allowable deduction under section 43B of the I.T.

Act, 1961. However, the same amendment would not be

applicable for the belated payment to employees’

contribution to PF & ESI. He submitted that since the

assessee has received the money by taking it from the salary

of the employees and kept the same without making

payment to the Government Account, the concession given

in Section 43B is not available with respect to employees’


8

ITA.No.1855/Del./2020 M/s. Rukmini
Polytubes P. Ltd., Delhi..

contribution. Referring to the amendments in the provisions
of Section 43B as well as 36(1)(va), he submitted that the
Explanation-2 inserted by Finance Act, 2021 clarifies that
the definition of “Income” as provided in Section 2(24)(x)
remains unchanged and provision of Section 43B does not
apply and deemed to never have been applied for the
purpose of determining the due date of payment of
employees’ contribution to PF & ESI. He accordingly
submitted that the grounds raised by the assessee should
be dismissed.

7. After hearing both the sides, I find the

adjustment of Rs.1,82,543/- under section 43B(b) was

made by the CPC on account of belated payment of PF and

ESI payment of Bonus and GST. It is the submission of the

Learned Counsel for the Assessee that the above payments

were made before the due dates as prescribed under the

respective Act and due to a clerical mistake in the reporting

by the Auditor’s the same was disallowed. Since the Ld.

CIT(A) has sustained the addition merely based on the

report of the Auditor, therefore, considering the totality of
9

ITA.No.1855/Del./2020 M/s. Rukmini
Polytubes P. Ltd., Delhi..

the facts and circumstances of the case and in the interest
of justice, I restore this issue to the file of the A.O. with a
direction to verify the details and if the payments are made
before the specified date, then, to delete the addition.
Ground of appeal No.1 of the assessee is accordingly
allowed for statistical purposes.

8. Ground No.2 being general in nature is

dismissed.

9. In the result, appeal of the Assessee is partly

allowed for statistical purposes.

Order pronounced in the open Court on 13.10.2021.

Sd/-
(R.K. PANDA)
ACCOUNTANT MEMBER
Delhi, Dated 13th October, 2021
VBP/-

Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT ‘SMC-1’ Bench, Delhi
6. Guard File.

// By Order //

Assistant Registrar : ITAT Delhi Benches : Delhi.

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