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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI LAXMI PRASAD SAHU
Per George George K, Vice President:
1. This appeal at the instance of assessee is directed against CIT(A)’s Order dated 26.02.2023, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2018-19.
The grounds raised by the assessee read as follows:
The Rectification Order for AY 2018-19 of the Asst. Director of Income Tax, CPC ['the Ld. AO'] under section 154 of the Income-tax Act, 1961 ('the Act') dated 12/03/2021 is contrary to law and facts of the case.
2. The Ld. AO erred in law in adding back the Rs. 46,54,886/- u/s 36(1)(va) of the Income Tax Act, 1961 for the delay in payments of PF and ESI. . This addition is pertaining to late payment of employee contribution of PF and ESI to the concerned funds after the due dates, but paid within the due date of filing Income Tax Returns 3. The Ld. AO erred in adding back as the payments of employee contributions to PF and ESI funds are made within the due date of filing of Income Tax Returns, relying upon the decision of SUPREME COURT OF INDIA between Principal Commissioner of Income-tax, Jaipur Vs. Rajasthan State Beverages Corporation Ltd DIARY NOS. 15041 OF 2017 dated JULY 4, 2017, it is noted that SLP has been dismissed and decided that "Amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va) of Income Tax Act, 1961".
The above grounds are without prejudice to each other.
5. The Appellant craves leave to add, alter, amend or withdraw all or any of the above Grounds of Appeal at or before the time of hearing of the appeal.
Brief facts of the case are as follows:
Assessee is an individual carrying on business of manpower supply services. For the Assessment Year 2018-19, the return of income was filed on 29.10.2018. The return of income was processed under section 143(1) of the Act on 12.03.2021. There was a disallowance under section 36(1)(va) of the Act amounting to Rs.46,54,886/- being employees’ contribution to ESI which was paid beyond the due date specified under the ESI Act. The assessee filed an application for rectification and the rectification application was rejected by the CPC.
4. Aggrieved, assessee filed an appeal before the First Appellate Authority. The CIT(A) confirmed the view taken by the CPC in rejecting the rectification application.
Aggrieved by order of CIT(A), assessee has filed present appeal before the Tribunal. None appeared on behalf of the assessee in spite of several hearing notices being served. Hence, we proceed to dispose off the issue raised in this appeal after hearing the learned DR.
Learned DR submitted that the issue in question is squarely covered against the assessee by the judgment of Hon’ble Apex Court in the case of Checkmate Service Pvt. Ltd., Vs. CIT reported in [2022] 143 taxmann.com 178 (SC).
We heard the learned DR and perused the material on record. The issue raised is no longer res-integra. The Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd., (supra) had categorically held that the employees’ contribution to the ESI/PF has to be paid within the due dates specified in the respective Acts. It was held by the Hon’ble Apex Court that in the event there is a delay of making such payment under the respective Acts, the disallowance made under section 36(1)(va) of the Act is justified. In view of the above cited judgment of the Hon’ble Apex Court, we reject the grounds raised by the assessee.
In the result, appeal filed by the assessee is dismissed
Pronounced in the open court on the date mentioned on the caption page.