Income Tax Appellate Tribunal - Mumbai
Nomura Services India Pvt Ltd ,Mumbai vs Dy Dit-15(1)(2), Mumbai on 27 March, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "B" MUMBAI
BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)
AND
MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER)
ITA No.7920/MUM/2025
Assessment Year: 2022-23
Nomura Services India Deputy Director of Income
Private Limited, 10th Tax - 15(1)(2), Mumbai
Floor, Winchester, Off Vs. (Assessment Unit, National
High Street, Powai Faceless Assessment
Business District, Centre), Aayakar Bhawan,
Mumbai-400076. Maharishi Karve Road,
Maharashtra - 400020.
PAN NO. AABCL 0053 C
Appellant Respondent
Assessee by : Shri Hardik Nimal CA, & Ms. Hinal
Shah, CA.
Department by : Shri Swapnil Choudari (SR. DR).
Date of Hearing : 25/02/2026
Date of pronouncement : 27/03/2026
ORDER
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order, dated 19.09.2025, passed by the Learned Commissioner of Income Tax Nomura Services India Private Limited 2 ITA No. 7920/MUM/2025 (Appeals), National Faceless Appeal Centre, Delhi [in short 'the Ld. CIT(A)'] for Assessment essment Year (in short A.Y) 2022-23.
2. Briefly stated facts of the case are that the assessee filed return of income on 25.11.2022 declaring total income of Rs.245,24,01,040/-.. T The he return of income filed by the assessee was processed u/s 143(1) of the Income Tax Act, 1961 (in short Act) on 26.07.2023, wherein the Central Processing Centre (CPC (CPC) made 28,57,553/- for employees contribution to Provident adjustment of Rs.28,57,553/ Fund(PF) not paid on or before the due date prescribed under the relevant Act and assessed the total income at Rs.2,79,95,32,530/ Rs.2,79,95,32,530/-.
2.1. The return of income filed by the assessee was later on selected for scrutiny on various grounds inter-alia arm's length price of international national transaction transaction, expenses incurred for earning exempted income, refund claim, ICDS complaints and adjustment, double taxation of relief, imports, deprivation claim and claim on any other amount allowable as deduction in Schedule - BP. The learned Assessing Officer considering submission of the assessee did not fficer after consider make any addition u/s 143(3) of the Act, and assessed income u/s 143(3) of the Act at income of Rs.279,95,32,530/-
Rs.279,95,32,530/ i.e. the income determined in processing u/s 143(1) of the Act.
2.2 Aggrieved, the assessee filed appeal before the learned CIT (A)against the order u/s 143(3) of the Act, dated 11.03.2025.
11.03.2 The learned CIT(A), while adjudicating the issues raised before him, Nomura Services India Private Limited 3 ITA No. 7920/MUM/2025 upheld the disallowance of ₹28,57,553/- made under section 36(1)(va) of the Act in respect of employees' contribution to PF on the ground that the contribution had been deposited beyond the due date prescribed under the relevant statute, relying upon the judgment of the Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. v. CIT (supra). The relevant finding of ld CIT(A) is reproduced as under:
"5.2. In the ground no.
no 3, the appellant has contended against the disallowance of leave encashment payments u/s 438 amounting to RS.3,57,24,627/- The appellant RS.3,57,24 explained that there was a compensating error due to interchange of figures between current year and prior year payments u/s 43B. The appellant claims that nil the CPC still made the disallowance. although the net effect was nil, 5.3. It is clear from the perusal of the Tax Audit Report (TAR) and the ITR that the disallowance is due to erroneous reporting of relevant amounts under wrong columns. This issue warrants verification of the facts as per the supporting irected to verify the same. If the issue arose merely documents, hence, tthe AO is directed due to inadvertent misreporting, the deduction shall be allowed to the appellant.
appellant 5.4. In the ground no. 4, the appellant has contended against the addition of VAT/GST refund to the tune of Rs.47,56,63,367/-, Rs , The appellant argued that refund of GST was not routed through the Profit & Loss account but directly through Balance Sheet accounts.
5.5. Since no GST expense was debited, its refund cannot be treated as taxable income. Judicial precedents relied u pon by the appellant, including Nomura group upon cases, support the appellant's stand. Therefore, after verification of the amount claimed by the appellant, the addition of the amount under question shall be deleted.
Nomura Services India Private Limited 4 ITA No. 7920/MUM/2025 In view ew of the above discussion, the grounds no. 1 to 4 are allowed for statistical grounds purposes.
5.6. As per the ground no. 5, the appellant has pleaded against the disallowance of employees' loyees' PF contributions of Rs.28,57,553/-
Rs. u/s 36(1)(va).
36(1)(va) It is a matter of fact that the appellant made delayed payments payments of the PF contributions of its employees, as the TAR shows that there was a delay of one day in payment as per the relevant statue. The appellant has relied on the EPFO circular which made clarification due to AADHAR related issues.
regarding the delays caused in PF/ESI payments due 5.7. However, the section 36(1) (va) mandates that the PF/ESI contributions credited' to the employee's received by the employer from its employees must be 'credited' due date account by the 'due date'' prescribed under the relevant law The Hon'ble Supreme Court in the case of Checkmate Services Pvt Ltd vs CIT (Civil Appeal no. 2830 to 2833 of 2018 and 159 of 2019) vide order dated 12.10.2022, has clearly marked the difference between nature and character of assessee-employer's assessee contribution and amou amounts nts retained by assessee from out of employee's income by way of deduction wherein one is liability to be paid by employer and second is deemed income as per section 2(24)(x) which is held in trust by assessee/employer.
assessee/employer 5.8. The Apex Court has clearly stated stated that Section 438 could not apply in case of amounts which were held in trust as was case of employee's contribution which were deducted from their income and was not part assessee/employer's income, thus, said clause would not absolve assessee/employer from its liability to deposit employee's contribution on or before due date as a condition for deduction.
5.9. In view of the above discussion, discussion, the disallowance of Rs.
Rs.28.57.553/-u/s 36(1)(va) is upheld and the ground no. 5 is dismissed."
dismissed
3. Aggrieved, the assessee is before the Tribunal by way of raising grounds as reproduced as under:
Nomura Services India Private Limited 5 ITA No. 7920/MUM/2025 "1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income-tax, Income tax, National Faceless Appeal Centre ['CIT(A)] erred in confirming the action of the Assessing Unit, Income Income-tax tax Department (Assessing Officer or "AO) of computing the total income at INR 2,45,52,58,597 as against total income of INR 2,45,24,01,044 declared by the Appellant in its return of income.
2. On the facts and in the circumstances of the case and in law, the Ld. Income tax National Faceless Appeal Centre ['CIT(A)] erred in not Commissioner of Income-tax appreciating that the additions made under section 143(1) of the Act are invalid, bad in law and liable to be quashed.
ts and circumstances of the case and in law, the CIT(A) / AO erred in
3. On facts making a disallowance amounting to INR 28,57,553 under section 36(1)(va) of the tax Act, 1961 (the Act') on account of delay in the payment of the employee's Income-tax contribution to Provident dent Fund (PF).
4. On the facts and in the circumstances of the case and in law, the Centralized Processing Centre (CPC) /AO erred in levying the interest amounting to INR 28,169 under Section 234C of the Act.
The Appellant craves leave to add, alter, amend, amend, substitute or withdraw all or any of the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary at either at or before the appeal hearing so as to according to the law."
enable the Hon'ble Tribunal members to decide these according
4. Before us, the learned counsel for the assessee referred to page 11 of the Paper Book, Book being the Tax Audit Report (TAR) (TAR), which reflects the payment of ₹28,57,553/- towards employees' contribution to PF on 16.06.2021.
16.06.2021 He further referred to sub-row row (k) of row 6 at page 6 of the intimation issued under section 143(1) 143(1), wherein the CPC made an adjustment of ₹28,57,553/- on account of delayed Nomura Services India Private Limited 6 ITA No. 7920/MUM/2025 deposit of employees' PF contribution as required under section 36(1)(va) of the Act.
4.1 From the record, it is evident that the CPC, while processing the return under section 143(1) of the Act vide order dated 26.07.2023, made the aforesaid adjustment and determined the total income at ₹2,79,95,32,530/- as against the returned income of ₹2,45,24,01,040/-.. Thus, the disallowance in question was made in the intimation issued under section 143(1) of the Act and not in the assessment framed under section 143(3).. During the course of scrutiny proceedings, the Assessing Officer did not independently examine or adjudicate this issue.
issue 4.2 The learned counsel for the assessee submitted that the delay of one day in depositing the PF contribution occurred due to a technical glitch in the EPFO portal his contention, he referred to portal. In support of this Book,, showing that the EPFO server was page 44 of the Paper Book temporarily unable to service the request due to maintenance downtime or capacity issues.
4.3 It was further submitted that the assessee was required to Aadhaar seeded cases for generate an ECR challan in respect of non-Aadhaar the month of May 2021, but due to the portal malfunction the same could not be generated within time. The assessee accordingly raised a complaint on 15.06.2021 with the Regional Provident Fund Office, Nomura Services India Private Limited 7 ITA No. 7920/MUM/2025 Thane, a copy opy of which placed on page 45. T The he relevant complaint raised by the assessee is reproduced as under:
"From:: Mendon, Harish (HR/IN) Sent:: 15 June 2021 23:18 To:: '[email protected]' Cc:: '[email protected]' Subject:: PF Portal Not working- Est. Code-TH/THA/99368 Dear Sir/Madam, We, M/s Nomura Services India Private Limited, Limited, is an Un-exempted Un establishment, registered under Establishment Code No. TH/THA/99368 with RPFC-Thane.
We wish to bring to your notice, that we are facing a consistent error while logging into the Employer EPFO portal. As a result, we are unable to proceed with the ECR Challan generation and remittance for the month of May, 2021 for the non non-Aadhaar seeded cases.
he EPFO Employer link Annexed attached is a snapshot of the error on tthe Today, 15th June 2021, is the last day for remittance of PF dues for the month of May 2021. We request you to waive off the interest and damages for the delay in remittance of PF dues, on account of the above issue.
Request you to kindly dly consider the issue and resolve the same at the earliest. We await your positive response and action in the matter.
Thanking You, Yours faithfully.
Harish Mendon Human Resources 4.4 The learned counsel also referred to the notification issued by the Employees' Provident Fund Organisation (EPFO) making Aadhaar seeding mandatory for filing ECR with effect from 01.06.2021,, which allegedly caused operational difficulties during Nomura Services India Private Limited 8 ITA No. 7920/MUM/2025 the transition phase. The relevant notification of EPO is reproduced as under:
"No: BKG-27/7/2020 27/7/2020-G/Pt.file Date: 01.06.2021 To All Addl. CPFCs(HQ)/ACC (Zones) Subject: Mandatory seeding of Aa Aadhaar dhaar Number for filing of ECR - Reg.
Madam/Sir.
Secu ty, 2020, has been brought into force, Section 142 of the Code on Social Security, with effect from 03.05.2021, vide, gazette notification No. 1730(E) dated 30.04.2021.
2. The section 142 of Chapter XIV of the Social Security ty Code, includes the the beneficiary under this Code or rules, provisions related to Aadhaar, wherein the hemes made or framed there under, shall establish his identity or, regulations or Schemes as the case may be, the identity of his family members or dependents through Aadhaar number
3. In compliance of the above provision in EPFO, the Competent Authority has approved that the ECR shall be allowed to be filed only for those members, whose Aadhaar numbers are seeded and verified with the UANs, wef. 01.06.2021 4 Accordingly, the employers shall be allowed to file the ECR only for the UANs seeded with Aadhaar, w.e.f.
w.e. 01.06.2021. To o ensure that the members and the employers are not adversely affected in the transition phase, the following steps and measures may be undertaken by the field offices under your jurisdiction. A zone wise pendency position is attached as an annexure, as a ready reference.
a. All the employers need to be made aware of the mandatory filing of ECR with Aadhaar validated UANs. Therefore, wide publicity may be ensured in this regard. b. The ROs may conduct virtual conferences and also make use of the Social Med Media es to reach out to maximum number of employers and subscribers. handles c. A Nodal officer may be appointed, for coordination of these efforts and to facilitate the resolution of any issues being faced by the employers and members in this regard.
d. Daily progress may be obtained from the field offices, to ensure close monitoring.
monitoring Accordingly, the Zonal Offices are requested to ensure strict compliance of the above instructions."
(Issued with approval of Competent Authority) Yours faithfully.
Nomura Services India Private Limited 9 ITA No. 7920/MUM/2025
-sd-
(Rajiv Bisht) ACC (F&A) 4.5 The learned counsel further referred to the paper book page 47, wherein the mandatory seeding of the Aadhaar number for filing ECR was extended to 01.09.2021.
4.6 Further the learned counsel referred to the letter dated 31.08.2021 issued by the Employee Provident Fund Organization, officers were advised in relation to delay in filing the wherein the field officer ECR for the wage month of May, 2021 2021, which was due on or before 15.06.2021, but could not be filed due to the non non-seeding of the Aadhaar and directed that those entities should not be presumed as employers in default and each case should be appreciated in own facts u/s 14(b) of EPF Act.
4.7 However, during the course of hearing, the learned counsel for the assessee could not place on record any material to demonstrate whether the complaint made before the Regional PF authorities was adjudicated under section 14B of the EPF Act Act,, or whether the authorities had accepted the explanation regarding the delay.
5. We have heard rival submissions of the parties and perused the relevant material on record. From the facts placed before us, it is evident that the adjustment relating to employees' contribution contribu to PF 28,57,553/- was made while processing the return amounting to ₹28,57,553/ under section 143(1) of the Act Act.. The said adjustment was not the Nomura Services India Private Limited 10 ITA No. 7920/MUM/2025 subject matter of examination in the scrutiny assessment proceedings under section 143(3).
143(3) The Assessing Officer, while le passing the order under section 143(3) 143(3),, merely adopted the income already determined under the intimation issued under section 143(1) and did not independently adjudicate upon the issue of delayed deposit of employees' PF contribution. In such circumstances, the grievance raised by the assessee essentially relates to the adjustment made under section 143(1) of the Act. The mere fact that tha the income determined under section 143(1) was adopted while framing the assessment under section 143(3) would not convert the adjustment made under section 143(1) into an issue arising from the assessment order passed under section 143(3).
5.1 ly, the appropriate remedy available to the assessee Accordingly, was to challenge the intimation issued under section 143(1) 143(1), wherein the impugned adjustment was originally made.
5.2 In this regard, we draw support from the decision of the coordinate bench of the Tri Tribunal, bunal, Mumbai in the case of Innovsource Services Pvt. Ltd. (ITA No. 3424/Mum/2024), 3424/Mum/2024) wherein it has been held that where an adjustment is made in the intimation under section 143(1) and the assessment order under section 143(3) merely adopts the income determined therein determined without independently examining the issue, the adjustment cannot be challenged in proceedings arising out of the Nomura Services India Private Limited 11 ITA No. 7920/MUM/2025 assessment order under section 143(3) 143(3).. The Tribunal in that case also explained the scope of the doctrine of merger merger, observing that merger would arise only where the same issue is examined and adjudicated in the assessment order under section 143(3) 143(3). Where the subject matter of the intimation and the assessment order are merg with the different, the intimation under section 143(1) does not merge assessment order. Relevant part of decision is reproduced as under:
under We have heard rival submissions of the parties on the issue of the merger of the intimation order u/s 143(1)(a) of the Act with assessment order u/s 143(3) of the Act. We find that assessee filed rectification against the intimation order dated 22.09.2022 which was disposed off by the AO vide rectification order dated 21.10.2022. The Ld. CIT(A) has cited the submission of the assessee in the impugned order wherein the assessee has requested to merge the appeal against the rectification order with the appeal filed against the assessment order. In our opinion, the assessee itself is accepting that the issue of adjustment made u/s 143(1)(a) of the Act and the rectification order merged with the assessment order. In the ground no. 1 raised before us also, the sessee is praying to this effect. In background of these facts and assessee circumstances, we are of the opinion that , once, the issue involved in intimation order gets merged with the assessment order, the present appeal becomes infructuous. The irrespective of the fact of admission by the assessee, the law itself is clear on the concept of Nomura Services India Private Limited 12 ITA No. 7920/MUM/2025 merger between an intimation and the assessment has been dealt with by various Hon'ble Courts and the Benches of the Tribunal.
The Hon'ble High Court of Madras in the case of Tamil Nadu, Magnesite Ltd. Vs. Commissioner of Income Tax Writ Petition No. 17819/2001 held that after passing of an order u/s 143(3) of the Act, the intimation u/s 143(1) of the Act get merged with the order u/s 143(3) of the Act and intimation order u/s 143(1)(a) of the Act does not survive independently for rectification by the Assessing Officer. The Hon'ble High Court of Calcutta in the case of CESC Ltd. v. DCIT (2004) 134 Taxman 647 (Cal) held that when assessee accepted in the intimation has been reversed in the regular assessment and the assessee has preferred appeal which is pending, the theory of merger is bound to apply in the present case for the reason that the intimation issued u/s 143(1)(a) of the Act is no longer operative. The Co ordinate Bench of the Delhi Co-ordinate Tribunal in South India Club v. ITO (2024) 163 taxmann.com 479 (Delhi) held that exemption claimed u/s 11 of the Act was denied vide the intimation u/s 143(1) of the Act and subsequently the matter was picked up for scrutiny and the Assessing Officer also denied the same exemption in the assessment order u/s 143(3) of the Act. Co ordinate Bench of the Tribunal held that t. The Co-ordinate intimation order u/s 143(1) of the Act merges with the assessment order u/s 143(3) of the Act and the said intimation becomes inoperative and the appeal filed against such intimation could also uctuous. But if the subject matter of adjustment u/s become infructuous.
Nomura Services India Private Limited 13 ITA No. 7920/MUM/2025 143(1) of the Act and section 143(3) are different then said concept of the merger may not apply. In the case of Areca Trust v. CIT(A), NFAC reported in (2024) 117 ITR (Trib) 264 (ITAT[Bang]), (ITAT[Bang]) the Bengluru ru Bench of the Tribunal observed that the assessee filed return of income declaring total income at Rs. Nil which was processed by the Assessing Officer and in the intimation u/s 143(1) of the Act, the Assessing Officer considered an amount of ,417/- as income chargeable to tax u/s 115JB of the Rs.23,29,62,417/ Act. The assessee filed a rectification application against the said intimation u/s 154 of the Act. Subsequently, the case of the assessee was selected for scrutiny and assessment order u/s 143(3) of the Act was passed whereby assessing total income at Rs.23,29,63,417/-
Rs.23,29,63,417/ as per the intimation letter issued u/s 143(1) of the Act. The Assessing Officer merely repeated the figure of the income which was mentioned in the intimation order, the assessee preferred appeal against the order u/s 143(3) of the Act before the Ld. CIT(A), the Ld. CIT(A) held that appeal filed by the assessee against the order u/s 143(3) of the Act was not maintainable since the assessee did not adjudicate the matter on merits and merely concluded the assessment by incorporating adjustment from the intimation u/s 143(1) of the Act. Similarly, the Co-
Co-ordinate Bench of the Tribunal in the case of Orient Craft Ltd. v. Dy. CIT (2024) 158 taxmann.com 1124 (Delhi (Delhi-Trib.) also affirm the finding of o ordinate Bench of the Tribunal in the case of Areca Trust the Co-ordinate (supra). From the above decisions, it is clear that an intimation Nomura Services India Private Limited 14 ITA No. 7920/MUM/2025 order u/s 143(1) of the Act will not automatically merged with the assessment order u/s 143(3) of the Act in case where the issues dealt in the intimation order and the assessment order are different and in the assessment order u/s 143(3) of the Act merely the income adopted under the intimation order u/s 143(1) of the Act has been accepted and no addition has been made separately.
separ The ld counsel referred before us to the decision of the Coordinate bench of Mumbai in the case of National Stock Exchange of India Limited vs DCIT in ITA No. 732/Mum/2023 for AY 2020- 21 and submitted that no appeal lied against assessment order, butt we find that in said case the adjustment which was made in intimation order, was not made in the assessment order passed after discussion. Thus, facts of that case are different from the facts of instant case before us.
8.3 In light of the above discussion, upon examining the facts of discussion, the present case, it is evident that the adjustment proposed in the order issued under Section 143(1) of the Act pertains to the deduction claimed under Section 80JJAA of the Act. Notably, the same issue has also been addressed addressed in the order issued under Section 143(3) of the Act, which is currently under appeal before the Learned First Appellate Authority. The primary question in the order under Section 143(1)(a) is whether the deduction under Section 80JJAA should be restr icted to the business income or restricted extended to the gross total income. The assessee contends that the Nomura Services India Private Limited 15 ITA No. 7920/MUM/2025 deduction, being calculated based on the expenditure incurred, should not be limited to the business income. However, in the assessment order, the assessee d id did not provide complete responses to the queries raised by the Assessing Officer. Consequently, the Assessing Officer denied the entire deduction claim amounting to ₹30,10,31,823. Given that the issue of deduction is identical in both the order under Section Secti 143(1) and the order under Section 143(3) of the Act, the former order effectively merges with the latter.
5.3 28,57,553/- was made In the present case, the disallowance of ₹28,57,553/ solely in the intimation issued under section 143(1) and the Assessing Officer did not adjudicate the issue in the assessment 143(3). Consequently, the challenge raised proceedings under section 143(3).
by the assessee in the present appeal is not maintainable. Respectfully following the ratio laid down by the coordinate coord bench in (supra), we hold that the present Innovsource Services Pvt. Ltd. (supra), appeal, insofar as it seeks to challenge the adjustment made under section 143(1), cannot be entertained in proceedings arising from the assessment order passed under section 1 143(3).
5.4 Accordingly, the order of the learned CIT(A) on the issue under dispute is set aside, aside, with liberty to the assessee to pursue such remedy as may be available in law against the intimation issued under section 143(1) 143(1).
Nomura Services India Private Limited 16 ITA No. 7920/MUM/2025
6. In the result the appeal ffiled iled by the assessee is dismissed as non non-
maintainable
Order pronounced /03/2026.
ced in the open Court on 27/03
Sd/- Sd/
Sd/-
(KAVITHA
KAVITHA RAJAGOPAL)
RAJAGOPAL (OM
OM PRAKASH KANT)
KANT
JUDICIAL MEMBER ACCOUNTANT MEMBER
Mumbai;
Dated: 27/03/2026
M. RanganathVittal , Sr. P.S.
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
BY ORDER,
//True Copy//
(Assistant Registrar)
ITAT, Mumbai