MEHARA EYETECH PVT LTD,MUMBAI vs. ASSTT COMMISSIONER OF INCOME TAX, CIRCLE 1(3)(1), MUMBAI

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ITA 1684/MUM/2022Status: DisposedITAT Mumbai31 May 2023AY 2020-20213 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the disallowance made by the authorities below needs to be confirmed. This is in accordance with the Supreme Court's decision in Checkmate Services Pvt. Ltd. Vs. CIT, which states that employee's contribution to PF/ESIC must be deposited within the due date prescribed by the respective Acts to be eligible for deduction.

What were the facts?

The assessee's appeal concerned the disallowance of Rs. 9,15,520/- for late deposit of employee's contribution to PF/ESI. The CPC made this adjustment under Section 36(1)(va) read with Section 2(24)(x) of the Income Tax Act.

What were the issues?

Whether the disallowance of employee's contribution to PF/ESI for late deposit is justified in light of the Supreme Court's ruling in Checkmate Services Pvt. Ltd.?

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 2(24)(x)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, MUMBAI ‘B’ BENCH, MUMBAI.

Before: Shri B.R. Baskaran (AM) & Shri Aby T. Varkey (JM)

For Appellant: Shri N. R. Agrawal
For Respondent: Dr. Samuel Pitta, (Sr. AR)
Hearing: 26.05.2023Pronounced: 31.05.2023

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI ‘B’ BENCH, MUMBAI. Before Shri B.R. Baskaran (AM) & Shri Aby T. Varkey (JM) (A.Y. 2020-21) Mehra Eyetech Pvt. Ltd. Vs. ACIT, Circle-1(3)(1) B-801 Lotus Corporate Park, Off 1st Floor, Aayakar Western Express Highway, Mumbai- Bhavan, Mumbai- 400063. 400020 or ACIT, CPC, Bangalore. PAN: AAACU2684H (Appellant) (Respondent) Assessee by Shri N. R. Agrawal Department by Dr. Samuel Pitta, (Sr. AR) Date of Hearing 26.05.2023 Date of Pronouncement 31.05.2023 O R D E R Per Aby T. Varkey (JM) :-

This is an appeal preferred by the assessee against the order of the Ld. CIT(A)/NFAC, Delhi dated 20.06.2022 for AY. 2020-21.

2.

Even though in the first round, we had allowed the appeal vide order dated 25.08.2022, the same has been recalled in MA No. 166/Mum/2023. The only issue is regarding the disallowance confirmed by Ld. CIT(A) regarding employee’s contribution towards PF/ESI to the tune of Rs.9,15,520/-.

3.

We have heard both the parties and perused the records. The CPC Bangalore processed the return of income u/s 143(1) Income Tax Act, 1961 (hereinafter “the Act”) and made adjustment of Rs.9,15,520/- u/s 36(1)(va) r.w.s. 2(24)(x) of the Act for late deposit of employee’s contribution to EPF/ESIC beyond the due date as prescribed in the specified Act (PF/ESIC Acts). The assessee has referred the decision of 2 Mehra Eyetech Pvt. Ltd.

Hon’ble Jurisdictional High Court in the case of Ghatge Patil Transport Ltd. (2015) 53 taxmann.com 141 (Bombay) and in the case of CIT Vs. Hindustan Organics Chemical Ltd. (2014) 48 taxmann.com 421 (Bom) and various other decisions of other High Courts and Tribunals. However, we find that the case laws relied upon by the assessee cannot came to its aid in the light of the judgment of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT (448 ITR 518). In this decision, the Hon’ble Supreme Court held that for allowing the deduction such amounts (employee’s contribution to PF/ESIC) are deposited within the due date as prescribed in the specified Act in the relevant funds. If the employer/assessee fails to deposit the amount towards employee’s contribution on or before the due date as prescribed under the EPF/ESIC Act, the assessee was not entitled to the deduction. Therefore, unless the assessee is able to show that it has deposited the employee’s contribution towards PF/ESIC in the relevant fund within the due date as prescribed in the respective PF/ESIC Act, disallowance u/s 36(1)(va) of the Act as made by AO/Ld. CIT(A) need to be confirmed in accordance with the decision of Hon’ble Supreme Court in the case Checkmate Services Pvt. Ltd. Vs. CIT (448 ITR 518). Therefore, the appeal filed by the assessee is dismissed.

4.

In the result, appeal filed by the assessee is dismissed. Pronounced in the open court on 31/05/2023 Sd/- Sd/- (B.R. BASAKARAN) (ABY T. VARKEY) Accountant Member Judicial Member Mumbai; Dated: 31/05/2023 Vijay Pal Singh, (Sr. PS)

3 Mehra Eyetech Pvt. Ltd.

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