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2018 (10) TMI 1175 - AT - Income TaxRevision u/s 263 - AO had not examined that the assessee has collected employees' share of EPF and ESI, but the payment towards the fund has not been made within the period prescribed for the purpose by Government of India - Held that:- As referring to the judgment of CIT vs. Merchem Ltd. [2015 (9) TMI 560 - KERALA HIGH COURT] assessee is entitled to get the benefit of deduction u/s. 43B(b) as provided under the proviso thereto only with regard to the portion of the amount paid by the employer to the contributory fund. Held, allowing the appeal, that since the assessee had admittedly not paid the remittance of the employees’ contribution to the provident fund and ESIC within the dates prescribed under the respective Acts, the assessee was not entitled to deduction under section 43B of the amounts deducted thereunder for an on behalf of the employees. This judgment was delivered on 8th September, 2015. The assessment order was passed on 19/12/2016. At the time of passing of the assessment order, the judgment was available to the Assessing Officer and he should have considered the same and disallowed the employee’s contribution towards ESIC and EPF after the prescribed date under the respective Act. The Assessing Officer failed to take note of the judgment of the Jurisdictional High court cited supra. In view of the above judgment, the assessment order is erroneous in so far as it is prejudicial to the interest of the revenue. Non consideration of TPA provision applicability - Held that:- Regarding referring the matter to the Transfer Pricing Officer u/s. 92CA(1) when the specified transactions with the sister concerns exceeded ₹ 15 crores, as per the provisions of the Act, the Assessing Officer should have examined whether the assessee’s case is fit to refer to the TPO or not. However, there was no whisper in the assessment order regarding the applicability of section 92CA(1) of the Act. The failure on the part of the Assessing Officer to make necessary enquiry in this matter, renders the assessment erroneous which also resulted in loss to the revenue, hence, it is prejudicial to the interests of the Revenue. Therefore, the CIT correctly exercised the power conferred under section 263 in setting aside the assessment order and remanded the case back to the file of the Assessing Officer to make necessary enquiry into the applicability of TP provisions and decide thereupon - Assessee appeal dismissed.
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