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Income Tax Appellate Tribunal, MUMBAI BENCHES “E”, MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
O R D E R Per Kavitha Rajagopal, J.M. This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeal) (‘ld. CIT(A)’ for short) passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’ for short) relevant to Assessment Year (A.Y. for short)
2019-20.
The solitary ground of appeal is the disallowance of ₹25,72,165/- made u/s. 2. 36(1)(va) of the Act pertaining to employees contribution to PF and ESIC deposited belatedly after the due date prescribed under the relevant Act but before filing of the return of income.
(A.Y. 2019-20) Atlas Tours & Travels Private Limited vs. Dy. CIT 3. The brief facts of the case are that the assessee company is engaged in the business of travel agency, tour operators and foreign exchange dealers. The assessee company is also engaged in the business of wind power, i.e., generation of electricity through wind mill. The assessee company filed its return of income dated 29.09.2019, declaring total income at ₹1,36,95,880/- and the same was processed u/s. 143(1) of the Act. The A.O./CPC vide intimation dated 3.01.2020 made a disallowance of ₹25,72,165/- u/s. 36(1)(va) of the Act being the employees contribution towards PF & ESIC deposited after the due date prescribed under the relevant Act.
The assessee was in appeal before the ld. CIT(A) challenging the impugned disallowance who confirmed the addition /disallowance made by the A.O./CPC.
The assessee is in appeal before us, challenging the order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the A.O./CPC had made the disallowance u/s. 36(1)(va) of the Act on the employees contribution towards PF & ESIC which was deposited by the assessee after the due date prescribed under the relevant Act but before filing of the return of income.
The ld. Authorised Representative (‘ld. AR’ for short) contended that the lower authorities have failed to consider the fact that the assessee had deposited the said PF on or before the due date prescribed under the relevant Acts. The ld. AR brought our attention to page no. 38 of the paper book where at Sr. Nos. 23 to 29, the assessee is said
(A.Y. 2019-20) Atlas Tours & Travels Private Limited vs. Dy. CIT to have deposited the PF before the due date prescribed under the Act but the same was overlooked by the lower authorities. The ld. AR prayed that the disallowance made towards belated deposit of employee’s contribution to PF & ESIC has to be deleted if the same was filed within the due date.
The ld. Departmental Representative (ld. DR for short), on the other hand, controverted the said fact and stated that the lower authorities have rightly made the disallowance. The ld. DR relied on the order of the lower authorities.
We have heard the rival submissions and perused the materials available on record. It is observed that as the issue of allowability of employees contribution towards PF & ESIC paid after the due date prescribed under the relevant Acts but before filing of the returns was settled by the Hon’ble Apex Court in the case of Checkmate Services P Ltd. vs. CIT (in Civil Appeal No. 2833 of 2016 vide order dated 12.10.2022). As this issue is no longer res integra, we are inclined to follow the said proposition except for remanding this issue to the file of the ld. A.O. for limited purpose of verifying the fact whether the assessee has deposited the said amount towards employees contribution to PF & ESIC within the due date specified under the relevant Act. It is also pertinent to point out that clause 38 of the Employees Contribution Fund Scheme, 1952 fixes the time limit for making the payments in respect of contribution to PF to be 15 days from the close of the month concerned and the interpretation of ‘month’ in this has been held to be the wage month and not the month when salary was disbursed. This has been reiterated in the decision of the Hon’ble Madras High Court in the case of CIT vs. Madras Radiation and (A.Y. 2019-20) Atlas Tours & Travels Private Limited vs. Dy. CIT Processing Ltd. 264 ITR 620 (Mad) and has also been followed by the Tribunal in Creative Textile Mills Pvt. Ltd. vs. DCIT, CPC (in vide order dated 24.05.2022). The said matter was recalled by the Tribunal in Miscellaneous Petition filed by the Revenue subsequent to the decision of the Hon’ble Apex Court in the case of Checkmate Services P Ltd. vs. CIT (in Civil Appeal No. 2833 of 2016 vide order dated 12.10.2022). We, therefore, remand this issue back to the file of the ld. A.O. for limited purpose of verifying the fact whether the assessee has deposited the said amount on or before the due date.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on this day of 31st July, 2023.