M/S JASANI INDIA PRIVATE LIMITED,MUMBAI vs. NATIONAL FACELESS APPEAL CENTRE (NFAC) , DELHI

Fact in brief is that the CPC Banglore found that assessee has not deposited the employee’s contribution towards Provident Fund to the amount of Rs.5,16,812/- to the government account within the due date as prescribed in PF/ESIC Act. Therefore, the CPC has disallowed the amount of Rs.5,16,812/- on account of late deposit of employee’s contribution towards PF/ESIC u/s 36(1)(va) r.w.s. 2(24)(x) of the Act to the government account beyond the due date as prescribed in the PF/ESIC Act.

The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee holding that issue has reached finality with the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT -1 Civil Appeal No. 2833 of 2016 dated 12.10.2022. 4. Heard both the sides and perused the material on record. The Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT -1 Civil Appeal No. 2833 of 2016 dated 12.10.2022 held that if the employer’s did not deposit the amount towards employee’s contribution on or before the due date as prescribed in the EPF/ESIC the assesse was not entitled to the deduction. The Hon’ble Supreme Court vide the decision referred as supra set at rest the entire controversy wherein it is held that employer’s have to deposit the employee’s contribution towards PF/ESIC on or before the due date prescribed in the respective law for availing deduction.

However, in the case of the assessee it has submitted that the amount towards employee’s contribution to PF/ESI was deposited within the due date as prescribed in the relevant Act. In this regard, the ld. Counsel has referred to clause 20(b) of the tax Audit report showing the detail of the payment made as placed in the paper book. We consider that as per the judgment of the Hon’ble Supreme Court referred supra

The CPC has disallowed the amount of Rs.9,008/- pertaining to penalties which was reported under the tax audit report. The same was confirmed by the ld. CIT(A).

During the course of appellate proceedings the ld. Counsel has submitted that the impugned amount of penalty has already disallowed by the assessee itself. The ld. Counsel has referred schedule 2 pertaining to statement of income wherein under the head disallowance of expenditure the assesse has already disallowed the amount of penalty.

The ld. D.R could not controvert this claim of the assessee based on the relevant supporting documents i.e income tax return acknowledgment and statement of income etc. Therefore, we allow this ground of appeal of the assessee.

In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 28.04.2023 (Sandeep Singh Karhail) (Amarjit Singh) Judicial Member Accountant Member