GAJRA DIFFERENTIAL GEARS LTD,MUMBAI vs. CIT (A) NFAC, DELHI

This appeal has been filed by the assessee challenging the order of the Learned Commissioner of Income Tax (Appeals)-4 [hereinafter “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 [hereinafter “the Act”] relevant to the assessment year [hereinafter “the A.Y.”] 2019-20.

There was no representation on behalf of the assessee, we hereby proceed to dispose of this appeal by hearing the Learned Departmental Representative [hereinafter “the Ld. DR”] and on perusal of the material available on record.

The brief facts are that the assessee is a private company and had filed its return of income declaring total income at ₹ 1,62,81,891/- and was processed u/s 143(1) of the Act. The Ld. AO/CPC vide intimation u/s 143(1) of the Act dated 11.05.2020 had disallowed ₹ 10,36,667/- as being employees contribution to PF deposited after the due date prescribed under the relevant Acts but before the filling of return of income u/s 139(1) of the Act.

The Assessee was in appeal before the Ld. CIT(A) challenging the impugned addition/disallowance made by Ld. AO/CPC. The Ld. CIT(A) upheld the disallowance made u/s 36(1)(va) of the Act.

The assessee was in appeal before the Tribunal and the Tribunal vide order dated 25.07.2022 deleted the impugned addition/disallowance by relying on the decision of the Hon’ble Jurisdictional High Court in the case of CIT v/s Ghatge Patil Transporters Ltd. (2014) 53 taxmann.com 141(Bombay High Court), CIT v/s M/s Hindustan Organic Chemicals Ltd. 48 taxmann.com 421 and various other decisions.

The revenue has filed the miscellaneous application to recall the said order in view of the decision of the Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. v/s CIT-1 (2022) 448 ITR 518 (SC) and the Tribunal vide order dated 30.12.2022 recalled the said order of the Tribunal.

We have heard the Ld. DR and perused the material available on record. It is evident that the assessee had deposited the impugned amount which is the employees contribution to PF and ESIC belatedly after the due date prescribed under the relevant Acts nevertheless before filling of the return of income. Though there were various decisions of the Hon’ble High Courts wherein it was held that employees contribution paid after the due date prescribed under the relevant Acts but before filing of the return of income was an allowable deduction and that the same was held to be covered under the provision of section 43B explanation 2 with retrospective effect, the Hon’ble Apex Court in the decisions of Checkmate Services Pvt. Ltd. (supra) brought an end to the contradictory decisions of various High Courts. The Hon’ble Supreme Court in its decision has held that employees’ contribution deposited after the due date prescribed under the relevant Acts but before filling of the return of income was not an allowable deduction and the same would not be covered under the provision of section of 43B which only pertains to the employer’s contribution to the said fund.

As the issue is no longer res integra, we do not find any merits in the submission of the assessee and we hereby dismiss the ground raised by the assessee.

In the result the appeal filed by the assessee is dismissed.