Finding that the additions under Section 143(1) of the Income Tax Act have been made in the Assessment Year prior to the decision of the Apex Court in Checkmate Services, the Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the addition was outside the scope of adjustments. Respectfully following the decisions of the co-ordinate benches, the ITAT deleted the addition of Rs. 2.38 crores.
The Division Bench comprising Challa Nagendra Prasad (Judicial Member) and Renu Jauhri (Accountant Member) observed that the Apex Court in the case of Checkmate Services (P) Ltd. Vs. CIT [(2022) 448 IT R 518] is misplaced considering the facts of the case. The Bench found that the impugned addition has been made under Section 143(1) when such an adjustment is clearly outside the scope of adjustments envisaged under the section.
The Bench also noted that the disallowance made under Section 143(1) in respect of late deposit of employees’ contribution to PF/ ESI has been deleted especially in cases pertaining to the assessment years prior to the decision of the Supreme Court in the case of Checkmate Services.
Briefly, the appellant – assessee company filed its return declaring income of Rs. 1.35 crores. The return was however processed by making addition of Rs. 2.55 crores, in respect of late deposit of employee’s contribution to PF/ESIC.
Appearances:
Advocate Swati Talwar, for the Appellant/ Taxpayer
Sr. DR Rajesh Kumar Dhanesta, for the Respondent/ Revenue
