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Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR
Before: SHRI PAVAN KUMAR GADALE, JUDICIAL & DR. DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the Assessee is directed against the order of ld. Commissioner of Income Tax(Appeals)[NFAC], Delhi dated 29.08.2022 emanating from the order under section 143(3) of the I.T. Act, 1961 passed by ACIT, Circle-1, Udaipur for the A.Y.2014-15. The Assessee has raised the following grounds of appeal:
1. That The Ld. CIT (Appeals), NFAC, Delhi has grossly erred in facts and in law in confirming the disallowance of Rs. 308827.00 made on account of delayed statutory payment of employee contribution of PF as per the provisions of section 36(1)(va) of the IT Act, 1961 as per his convenience. Therefore, the action of the Ld. CIT (Appeals), NFAC, Delhi is unwarranted, against the principles of natural justice, illegal & unjustified and the disallowance so made & confirmed by the Ld. CIT (Appeals), NFAC, Delhi is bad in law & liable to be deleted.
R.K. Carriers India Private Ltd. 2. That the appellant reserves his rights to add, to alter or to modify any grounds of the appeal on or before hearing of the same.”
The only issue for our consideration is disallowance on account of Employees Contribution to Provident Fund i.e.PF/ESIC of Rs.308827.00 which was paid beyond the due dates mentioned in the relevant statute. The Ground No.1 is related to the same issue.
At the outset of hearing, none appeared on behalf of the assessee. Ld. AR filed an email requesting for adjournment. However, request for adjournment is rejected.
The ld. DR for the Revenue relied on the order of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs. Commissioner of Income-tax-1.
We have heard Ld. DR and perused the records. The only issue for our consideration is disallowance of Rs. 308827.00 on account of Employees Contribution to PF/ESIC which was paid beyond the due dates mentioned in the relevant statute. The ground no. 1 is related to the same issue. It is an admitted fact that in the Audit Report it is mentioned that amount of Rs. 308827.00 was paid beyond the due date mentioned in the respective statute. This amount is Employees Contribution to Provident Fund and ESIC.
The issue of delayed payment of employee’s contribution of Provident fund & ESIC has been decided by Hon’ble SC in the case
R.K. Carriers India Private Ltd. of Checkmate Services (P.) Ltd. Vs. Commissioner of Income- tax-1 vide order dated October 12, 2022 as under : Quote, “ That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees’ contributions- which are deducted from their income. They are not part of the assessee employer’s income, nor are they heads of deduction per se in the form of statutory pay out. They are others’ income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. ” Unquote.
Thus, the Hon’ble Supreme Court has held that the Employee’s Contribution towards Provident Fund & ESIC has to be deposited before the due date mentioned in the respective statute. In this case it is an admitted position by the assessee in the Audit Report that the amount was not deposited before the due date mentioned in The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Hence, the impugned amount has been rightly disallowed by the AO. Accordingly, the Grounds of appeal raised by the assessee are dismissed.
In the result, appeal of the Assessee is dismissed.