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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI, S RIFAUR RAHMAN, AM AND MS. KAVITHA RAJAGOPAL, JM (Assessment Year: 2019-20) Vichare Express & Logistics Pvt. Ltd. Asst. DIT – CPC Bangaluru 407/408, Kesar Plaza, A wing, RDP-6, Centralized Processing Centre, Vs. Charkop, Kandivali (west) Bengaluru-560100 Mumbai-400067 PAN/GIR No.AAACV4075B (Appellant) : (Respondent) Assessee by : Shri Anuj Kisnadwala, AR : Ms. Vranda U Matkari, DR Revenue by Date of Hearing : 18.04.2023 Date of Pronouncement : 14.07.2023 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 (Appeals) – [hereinafter “the CIT(A)”] passed under section 250 of the Income Tax Act,1962 [hereinafter “the Act”], relevant to Assessment Year 2019-20.
The assessee has challenged the disallowance of ₹62,41,002/- being employees’ contribution to provident fund paid after the due date prescribed under the relevant Acts before the filling of the income and the assessee has also challenged the non granting of TDS credit to the extent of ₹ 4,889/-.
(A.Y. 2019-20) Vichare Express & Logistics Pvt. Ltd.
The brief facts are that the assessee is engaged in the business of postal and courier services and had failed its return of income dated 25.10.2019 declaring a loss of ₹2,93,60,960/- and the same was processed under section 143(1) of the Act were the CPC/AO made the disallowance of ₹62,41,002/- u/s 36(1)(va) of the Act as being employees contribution towards PF/ESIC paid after the due date prescribed under the relevant Acts and also made the disallowance of the credit of TDS amounting to ₹ 4,889/-
The assessee was in appeal before the Ld. CIT(A) challenging the impugned addition/disallowance. The Ld. CIT(A) dismissed the ground of disallowance made u/s 36(1)(va) of the Act by the relying on the decision of the Hon’ble Apex Court in the case of Checkmates Services Pvt. Ltd. (2022) 143 taxmann.com 178 (SC) and had allowed the claim of credit of TDS raised by the assessee.
The assessee is in appeal before us challenging the order of Ld. CIT(A). Ground No. 1 pertains to the disallowance of ₹62,41,002/- which is the employees contribution towards PF/ESIC deposited belatedly after the due date prescribed under the relevant Acts but nevertheless before the filling of return of income. The assessee had filled its revised ground of appeal dated 15.04.2023 wherein it had challenged the ground that the Ld. CIT(A) should have decided the validity on intimation u/s 143(1) of the Act.
The Ld. Authorized Representative for the assessee contended that the AO/CPC ought not to have made disallowance u/s 143(1) of the Act and had challenged the validity of intimation u/s 143(1)(a) of the Act. The Ld. AR relied on the order of the Hon’ble Apex Court in the case of Commissioner of Income Tax v/s Hindustan Electro Graphites Ltd. (2000) 109 Taxmann.com 342 (SC) challenging the validity of (A.Y. 2019-20) Vichare Express & Logistics Pvt. Ltd.
section 143(1)(a) of the Act. The Ld. AR brought our attention to page no. 7 of the intimation dated 06.05.2020 wherein it has specified that the assessee has not responded/response given is not acceptable. The Ld. AR contended that it is an inaccurate finding because the assessee has responded to the notice given. The Ld. AR stated that the CPC/AO has not considered the assessee’s submission and has further stated that while depositing the PF/ESIC for one month the last date was falling on the Sunday for which the assessee has deposited the same on the next day that is on the 16 July. The Ld. AR prayed that the same can be remanded back to the Ld. CIT(A) for verification of the fact that same was paid within the due date.
The Ld. DR on the other hand controverted the said fact of the assessee. The Ld. DR distinguished the case of Hindustan Electro Graphites Ltd. (supra) and relied on the decision of the Ld. CIT(A).
We have heard rival submission and perused the material on the record. It is observed that the assessee has challenged the grounds of disallowance amounting to ₹62,41,002/- being employees contribution to PF/ESIC which was paid belatedly after the due date specified under the relevant Act but before the filling of return of income. It is pertinent that prior to the decision of the Hon’ble Apex Court in the case of Checkmates Services Pvt. Ltd (supra) there were various High Courts which has held that the belated payment is also an allowable deduction and some High Courts have also held against the assessee. These infirmities arising out of contrary decisions of various High Courts have been dealt with by the Hon’ble Apex Court in the case of Checkmates Services Pvt. Ltd (supra) wherein the Apex Court has categorically held that the belated
(A.Y. 2019-20) Vichare Express & Logistics Pvt. Ltd. payment of employees’ contribution to PF/ESIC is not an allowable deduction. The Ld. AR has placed reliance on the decision of Hindustan Electro Graphites Ltd. (Supra) which is distinguishable on facts of the case present case in hand. We do not find merits in the submission of the Ld. AR on this issue as it is now a settled proposition of law. We deem it fit to send this issue back to the file of the Ld. AO only to the limited extent of verifying the fact that for one month the employees contribution was paid on the next day were the last day was falling on a Sunday. Therefore, Ground No. 1 is dismissed and the Ground No. 2 is partly allowed.
Ground No. 3 pertains to the non granting TDS to the extent of ₹ 4,889/-. It is observed that the Ld. CIT(A) has already given relief to the assessee on this ground and had directed the AO to allow credit after due verification. We, therefore, allow this ground of appeal raised by the assessee and direct the Ld. AO to give credit of TDS claimed by the assessee based on TDS certificate and 26AS filed by the assessee after due verification in accordance with the law.
In the result the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on14.07.2023