TMI Blog2010 (2) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... ality in the past it cannot work as an estoppel against law - if that legal position does not support the disallowance, the rectification order by way of which disallowance has been made cannot be approved either - Addition deleted - In favor of assessee - IT APPEAL NO. 5691 (MUM.) OF 2007 - - - Dated:- 12-2-2010 - PRAMOD KUMAR AND V.D. RAO, JJ. K. Shivram for the Appellant. Deepak Sutaria for the Respondent. ORDER Pramod Kumar, Accountant Member. - By way of this appeal, the assessee has called into question correctness of the learned Commissioner (Appeals) s order dated 5-3-2007, for the assessment year 1999-2000, in the matter of rectification under section 154 of the Income-tax Act, 1961 (for short "the Act" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. We are of the considered view that in the facts and circumstances of the case, the delay indeed deserves to be condoned as the assessee has given a reasonable explanation for the same with which we are satisfied. We, accordingly, condone the delay and proceed to decide the appeal on the merits. 5. On the merits, the short grievance of the assessee is that the learned Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs. 29,64,715 under section 43B read with section 154 of the Act by way of rectification of mistake alleged to be apparent on record. 6. The relevant material facts are like this. The assessee-company is engaged in the business of manufacturing industrial engineering goods and is also en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee carried the matter in appeal before the learned Commissioner of Income-tax (Appeals). The learned Commissioner of Income-tax (Appeal) confirmed the action of the Assessing Officer by observing as follows : "2.1 Before me, it is contended that the grounds on which the Assessing Officer has made further disallowance are not in accordance with law. The appellant has relied.upon the decisions in the case of Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677 (SC) and Kwality Milk Foods Ltd. v. Asst. CIT [2006] 284 ITR (AT) 89 (Chennai) (SB). 2.2 In the course of the appellate proceedings, attention of learned counsel of the appellant was brought to the fact that the appeal has been filed late by almost two years and that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of addition and is doing nothing else. Therefore, I refuse to readjudicate the issue and dismiss the appeal." 8. We have heard the rival contentions, perused the material on record and duly considered the applicable legal position as also the factual matrix of the case. The short question that we really need to adjudicate in this appeal at the threshold is, whether or not, the delayed payment of provident fund/Employees State Insurance Corporation contribution can be subjected to a disallowance under section 43B in the course of rectification proceedings. No doubt, a co-ordinate Bench of this Tribunal has confirmed such disallowance on the merits in the case of the assessee vide order dated 23-9-2009, but so far as the employees co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund/Employees State Insurance Corporation after the due date but before filing income-tax return cannot be the subject-matter of rectification under section 154. The plea raised by the assessee is thus indeed correct and meets our approval. It was not a fit case, by any stretch of logic, for resorting to the impugned disallowance by invoking section 154. As regards the learned Departmental representative s plea that the issue of disallowance has already reached finality and the impugned rectification order is in respect of the quantum alone and, therefore, we cannot, at this stage, adjudicate on the correctness or otherwise a disallowance per se , we are unable to see legally sustainable merits in this plea. The Assessing Officer has made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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