Disallowance cant be done for error of Tax Auditor in Reporting in Form3CD of Payment Date of PF Collected from Employees
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) in the case of Ernst & Young Merchant Banking Services LLP has deleted the disallowance as the tax auditor had committed an error in reporting the date of payment of Provident Fund (PF) collected from the employees.  

The assessee, Ernst & Young Merchant Banking Services LLP was engaged in the business of providing corporate advisory services and merchant banking services. It filed its return of income on 30.10.2019 declaring a total income which was later revised by way of filing a revised return of income.

The said return of income was processed by the Centralised Processing Centre (CPC) under Section 143(1) of the Income Tax Act, wherein the CPC proposed to make certain adjustments. In response to the notice issued by CPC, the assessee had filed its replies. Subsequently the CPC issued intimation under Section 143(1) of the Income Tax Act determining total income by making various adjustments.

The appeal was filed against addition made under Section 36(1)(va) of the Income Tax Act on account of employees’ contribution to the provident fund. Nikhil Tiwari and Rajan Vora on behalf of the assessee submitted that the tax auditor had issued a revised certificate mentioning the correct dates of payment and the same was being furnished as additional evidence. He further submitted that the assessee had also furnished copies of challans and relevant bank account copies in support of the revised certificate issued by the tax auditor. Richa Gulati, appeared on behalf of the revenue. 

The two-member Bench of B.R. Baskaran (Accountant Member) and Kavitha Rajagopal (Judicial Member) observed that the assessee had furnished a revised certificate issued by the tax auditor mentioning correct dates of payment. The assessee had also furnished copies of challans for the payment of provident fund and also relevant copy of bank statements in support of the claim of actual date of payment mentioned. The ITAT bench set aside the impugned order passed and deleted the addition made under section 36(1)(va) of the Income Tax  Act.