VICHARE EXPRESS & LOGISTICS PVT LTD,MUMBAI vs. ACIT. DCIT-CPC, BENGALURU

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/-.

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.

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

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.