M/S. UMIYA ASSOCIATES,MUMBAI vs. ASST COMM OF INCOME TAX CIRCLE 27 (10 , MUMBAI

These appeals are time barred by 22 days. The assessee has filed an application seeking condonation of delay in filing of the appeals. After examining the same we are satisfied that the delay in filing of the appeals is not willful. The delay has been caused due to reasons stated in the application, that appears to be bonafide. The delay in filing of the appeal is condoned and the appeals are admitted for hearing on merits.

Shri M. Subramaniam appearing on behalf of the assessee submits that identical issue is involved in both the appeal i.e. disallowance of ESI/PF u/s. 36 (1)(va) of the Income Tax Act, 1961 [ in short 'the Act']. The ld.Counsel for the assessee submits that in Assessment Year 2019-20 there is marginal delay of 1 to 3 days in deposit of the employees contribution for the months of June to October 2018 and there is no delay in depositing employees contribution for the months of May, November, December 2018, January, February, March and April 2019. In assessment proceedings u/s. 143(1), employees contribution has been disallowed even for those months where there is no delay. The ld.Counsel for the assessee furnished a chart/details – Viz. date, amount, etc. of the contributions received from employees and deposits thereof. The ld.Counsel for the assessee further furnished online deposit challans for the F.Y. relevant to the Assessment Year 2019-20. The ld.Counsel for the assessee prayed for restoring this issue to the file of Assessing Officer to re-examine the details furnished.

Per contra, Shri Manjoj Kumar Sinha representing the Department vehemently defended the impugned order. The ld. Departmental Representative submits that in the light of recent decision of Hon'ble Supreme Court of India in the case of Checkmate Services Pvt. Ltd. vs. CIT, 143 taxmann.com 178 the delay in deposit of employees contribution towards PF and ESI is liable to be disclosed u/s. 36(1)(va) of the Act.

We have heard the submissions made by rival sides and have examined orders of authorities below. The solitary issue raised in both the appeals is with respect to disallowance of Rs.14,26,241/- u/s. 36(1)(va) in assessment year 2019-20 and Rs.10,25,091/- in assessment year 2018-19.

For the period relevant to assessment year 2019-20, the assessee has furnished a chart giving details of the amount received from employees, due date for payment and actual date of payment. The short contention of the assessee is that the assessee has deposited contributions received from the employees before the due date for the months of May, November, December 2018 and January to April 2019. The delay in deposit of employees contribution is only for the months of June to October 2018. To substantiate its plea the assessee has also filed copies of the challans. Purportedly, for the Assessment Year 2019-20, entire employees contribution have been disallowed u/s. 36(1)(va) of the Act. We deem it appropriate to restore this issue to the file of Assessing Officer for the limited purpose of ascertaining the date of amounts received from employees and the amount deposited by the assessee on or before the due date. The Assessing Officer after ascertaining the facts shall decide this issue in the light of decision rendered by Hon'ble Apex Court in the case of Checkmmate Services Pvt. Ltd. vs. CIT (supra). Consequently, the appeal of the assessee in for Assessment Year 2019-20 is allowed for statistical purpose.

The assessee has not filed any chart/documentary evidence for Assessment Year 2018-19 to show that the amounts were deposited before due date. We find no infirmity in the order of CIT(A) in disallowing deduction of employees contribution towards ESI/PF u/s. 36(1)(va) of the Act. Thus, in the light of decision in the case of Checkmmate Services Pvt. Ltd. (supra), appeal of the assessee in is dismissed.

To sum up, assessee’s appeal for Assessment Year 2019-20 is allowed for statistical purpose and for Assessment Year 2018-19 is dismissed.