HOME FIRST FINANCE COMPANY INDIA LTD.,MUMBAI vs. ADIT (CPC) & DCIT,CIRCLE 10(1)(1), MUMBAI

This is an appeal preferred by the assessee against the order of the Ld. CIT(A)/NFAC, Delhi dated 27.06.2022 for AY. 2019-20.

Even though, we had allowed the appeal vide order dated 28.09.2022, the same has been recalled in MA No. 209/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.42,34,050/-. 3. We have heard both the parties and perused the records. The CPC Banglore processed the return of income u/s 143(1) Income Tax Act, 1961 (hereinafter “the Act”) and made adjustment of Rs.42,34,050/- 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 Hon’ble Jurisdictional High Court in the case 2 A.Y. 2019-20 M/s. Home First Finance Company India Ltd. 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 the rescue 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. Order pronounced in the open court on this 31/05/2023. (BR BASKARAN) JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 31/05/2023. Vijay Pal Singh, (Sr. PS)