CENTRAL 4 SECURE SOLUTIONS,UDAIPUR vs. ITO, WARD-1(1), UDAIPUR

Assessee By Shri Yogesh Pokharna, CA Revenue By Shri Venkatesh V (JCIT-DR) Date of hearing 2/11/2022 Date of 3/11/2022 Pronouncement O R D E R PER: SANDEEP GOSAIN, JM

This is an appeal filed by the assessee against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 26-10-2021 for the assessment year 2018-19 wherein the solitary issue of the assessee is that the ld. CIT(A) erred in sustaining the addition of Rs.2,62,390/- made by the AO on account of default in payment of employees contribution to PF & ESI which was paid before the due date of filing of return of income.

2 ITA 27/JODH/2022 CENRTRAL 4 SECURE SOLUTIONS VS ITO, WARD 1(1), UDIAPUR 2.1 Brief facts of the case are that the AO, CPC made additions of Rs.2,62,389/- to the return income of the assessee u/s 143(1)(a)(iv) on account of late deposit of employees contribution to PF and ESI while processing the return of income.

2.2 In first appeal, the ld. CIT(A) confirmed the action of the AO by holding that if the payment was not done within the stipulated time prescribed under the relevant enactment, the benefit of deduction cannot be claimed, since such belated payment is not a valid payment to attract deduction under the purview of the Income Tax Act. The ld. CIT(A) considering the totality of the facts and circumstances of the case confirmed the disallowance of Rs.2,62,389/- u/s 36(1)(va) of the Act and dismissed the appeal of the assessee.

2.3 During the course of hearing, the ld. AR of the assessee prayed that the ld. CIR(A) was not justified in confirming the addition of Rs.2,62,389/- u/s 36(1)(va) of the Act.

2.4 During the course of hearing, the ld. DR relied upon the order of the ld. CIT(A).

2.5 After hearing the ld. DR and perusing the materials available on record, it is noticed that the AO made an addition of Rs.2,62,390/- on account of failure of depositing the employees Contribution timely under PF and ESI Act by the assessee which has been sustained by the ld. CIT(A). However, the Bench noted that the assessee has deposited employees contribution towards PF & ESI before due date of filing of return. Recently, the Hon’ble Supreme Court has in the case of Checkmate Services Pvt. Ltd. Vs CIT-1, 143 Taxmann.com 178 (SC)/Civil Appeal No. 2833 of 2016 held that the provision of Section 43B of the Act shall not apply to employee’s contribution to PF/ESI and the due date specified u/s 36(1)(va) of the Act shall apply for determination of deductibility of employee’s contribution to PF/ESI. Accordingly, in view of the aforesaid judgement of Hon’ble Supreme Court (supra), the issue in the appeal being similar in nature is remanded back to the file of ld. CIT(A) for afresh adjudication by providing adequate opportunity of being heard to the 3 ITA 27/JODH/2022 CENRTRAL 4 SECURE SOLUTIONS VS ITO, WARD 1(1), UDIAPUR assessee and the assessee is directed to submit the necessary details/documents concerning the issue in question before the ld. CIT(A) in order to square up the case. Further, the assessee is also at liberty to take any other plea before the ld. CIT(A), if so advised. Thus the appeal of the assessee is allowed for statistical purposes.

3.0. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 3/11/2022.