MANIPAL SINGH WALIA (L/H OF KIRPAL SINGH),NEW DELHI vs. ITO WARD 52(4), DELHI

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ITA 181/DEL/2023Status: DisposedITAT Delhi14 March 2023AY 2018-193 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal acknowledged that the issue of delayed employee contributions is generally against the assessee as per the Supreme Court's decision in Checkmate Services Pvt. Ltd. However, since the CIT(A) allegedly ignored the assessee's submissions, the matter was remitted back for fresh consideration.

What were the facts?

The assessee's appeals concerned additions made by the CPC on account of employees' contribution to PF and ESI paid after the due date. The assessee claimed that their submissions before the CIT(A) were ignored.

What were the issues?

Whether the CIT(A) was justified in upholding the addition for delayed employees' PF and ESI contributions, and whether the assessee's submissions were properly considered.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ : NEW DELHI

For Appellant: Shri Sameer Kapoor, CA
For Respondent: Shri Om Prakash, Sr. DR
Hearing: 09.03.2023

These appeals by the assessee are directed against the respective orders of National Faceless Appeal Centre (NFAC) pertaining to the Assessment Years 2018- 19 & 2019-20.

2.

Since the issues are common & connect and the appeals were heard together, the same are being disposed off by this common order.

3.

For the sake of reference, I am referring to AY 2018-19. The grounds of appeal taken by the assessee read as under :- “Whether on law or facts of the case, ld. CIT (A) was justified in upholding the addition of Rs.29,84,060/- made by the Ld. CPC on account of employees contribution u/s 36(1)(va).”

2 & 182/Del./2023 3. In this case, the issue relates to disallowance made by the CPC on account of employees’ contributions of PF and ESI u/s 36(1)(va) of the Income-tax Act, 1961 (for short 'the Act').

4.

In this regard, ld. Counsel of the assessee submitted that before the ld. CIT (A), assessee had submitted submissions which have not been considered and ld. CIT (A) has mentioned that no response was given. For this, ld. Counsel of the assessee brought before us evidence of having uploaded the reply and remarks which the ld. CIT (A) has failed to acknowledge.

5.

Upon careful consideration, I note that there is no doubt that the issue of employees’ contribution towards PF & ESI is covered against the assessee by the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (2022) 143 taxmann.com 178 wherein it has been held that if employee contribution of provident fund and ESI paid beyond due date as specified under the relevant Act then the same has to be added back in the income of the assessee. However, it is also correct and duly acknowledged by the ld. DR of the Revenue that assessee has given submissions before the ld. CIT (A) who ignored the same. Hence, interest of justice demands that the issue may be remitted to ld. CIT (A). Ld. CIT (A) is directed to decide afresh after considering the submissions of the assessee as per law. Our above order applies mutatis mutandis to both the appeals for AYs 2018-19 6. & 2019-20.

7.

In the result, the appeals of the assessee stand allowed for statistical purposes. Order pronounced in the open court on this 14th day of March, 2023.

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