GULERMAK-TPL PUNE METRO JOINT VENTURE,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRALISED PROCESSING CENTRE, BENGALURU, KARANATAKA

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ITA 1979/MUM/2022Status: DisposedITAT Mumbai31 May 2023AY 2020-213 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the employee's contribution to PF/ESI must be deposited within the due date prescribed by the respective Acts to be eligible for deduction. Relying on the Supreme Court's decision in Checkmate Services Pvt. Ltd., the disallowance was confirmed.

What were the facts?

The assessee's appeal concerns the disallowance of employee's contribution to PF/ESI amounting to Rs. 16,92,251/-. The adjustment was made by the CPC under Section 143(1) for late deposit of these contributions.

What were the issues?

Whether the disallowance of employee's contribution to PF/ESI for late deposit is justified. Whether the decision of the Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. is applicable.

Which sections of the Income-tax Act were involved?

Section 143(1),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, “D” BENCH, MUMBAI

Before: SHRI BR BASKARAN, AM & SHRI ABY T. VARKEY, JM

For Appellant: Shri Darshan Koikar
Hearing: 26/05/2023Pronounced: 31/05/2023

O R D E R

PER ABY T. VARKEY, JM:

1.

This is an appeal preferred by the assessee against the order of the Ld. CIT(A)/NFAC, Delhi dated 15.06.2022 for AY. 2020-21.

2.

Even though in the first round we had allowed the appeal vide order dated 28.09.2022, the same has been recalled on 29.05.2023 in MA No. 216/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.16,92,251/-. 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.16,98,246/- 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 decisions of Hon’ble Jurisdictional High Court in the case of Ghatge Patil Transport Ltd. (2015) 53 taxmann.com 141 (Bombay)

2 A.Y. 2020-21 M/s. Gulermak TPL Pune 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 come 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.

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