This article delves into the proceedings and final judgment in ITA No. 1874/DEL/2020, involving Snowhite Apparels Ltd and the Deputy Commissioner of Income Tax (DCIT), Centralized Processing Center (CPC), Bangalore. The case, which pertains to the Assessment Year (AY) 2017-18, was filed on November 19, 2020, and the final order was pronounced on July 29, 2021.
Snowhite Apparels Ltd, a company engaged in the business of trading readymade garments, filed its return of income on October 28, 2017, declaring a total income of Rs. 8,26,280. The return was processed by CPC, Bangalore, on March 16, 2019, at an income of Rs. 15,01,500, making various disallowances, including Rs. 2,76,860 on account of late deposit of employee’s contribution to the Provident Fund (PF).
The assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] against the disallowance made by CPC. However, due to the non-appearance of the assessee despite two opportunities granted, the CIT(A) passed an ex parte order sustaining the disallowance of Rs. 2,76,860 on account of delayed deposit of employee’s contribution to PF.
The assessee, represented by Shri Mukesh Aggarwal, Chartered Accountant (CA), contended that given an opportunity, they could substantiate their case regarding the delayed deposit of PF contributions. The primary argument was that the delay should not result in disallowance as the contributions were eventually paid.
The respondent, represented by Shri Rajesh Kumar Dhanesta, Senior Departmental Representative (DR), supported the order passed by the CIT(A) and argued that the disallowance was justified due to the late deposit of PF contributions.
The Income Tax Appellate Tribunal (ITAT), presided over by Shri R.K. Panda, Accountant Member, reviewed the facts of the case and the arguments presented. The tribunal noted the non-appearance of the assessee before the CIT(A) despite multiple opportunities and the resulting ex parte order.
The tribunal acknowledged the assessee’s request for an opportunity to substantiate their case and deemed it proper to restore the issue to the file of the CIT(A). The tribunal directed the CIT(A) to grant one final opportunity to the assessee to substantiate its case and decide the issue based on facts and law. The tribunal also directed the assessee to appear before the CIT(A) and substantiate its case without seeking any adjournment under any pretext, failing which the CIT(A) would be at liberty to pass an appropriate order as per law.
The final order, pronounced on July 29, 2021, reads:
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Signed by:
Shri R.K. Panda, Accountant Member
This judgment underscores the importance of complying with statutory deadlines and the opportunity for taxpayers to substantiate their claims if they miss these deadlines due to genuine reasons.
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