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Facts
The assessee, engaged in a security agency business, filed his return of income. The CPC made a disallowance for delayed payment of employees' PF/ESI contributions. The assessee's appeal to the CIT(A) was dismissed.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's senior citizen status and ill health. The issue of disallowance for delayed PF/ESI contribution was examined in light of the Supreme Court's decision in Checkmate Services.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether disallowance of employees' PF/ESI contribution paid after the due date is justified.
Sections Cited
250, 143(1), 36(1)(va), 36(1)(va)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI “A” BENCH: NEW DELHI
Before: SHRI YOGESH KUMAR U.S & SHRI MANISH AGARWAL
[Assessment Year : 2019-20] Shiv Pratap Singh Kunwar, vs Jurisdictional Assessing 508, Begum Bagh, Meerut, Officer, Circle-1(1)(1), Uttar Pradesh-250001 Range-14, Meerut, PAN-AFMPK3273Q Uttar Pradesh-250001 APPELLANT RESPONDENT Appellant by Shri Hemant Jain, Adv. Respondent by Shri Ajay Kumar Arora, Sr.DR Date of Hearing 15.07.2025 Date of Pronouncement 30.07.2025 ORDER
PER MANISH AGARWAL, AM :
The captioned appeal is filed by the assessee against the order dated 29.11.2023 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] in Appeal No. NFAC/2018-19/10029654 u/s 250 of the Income Tax Act, 1961 [“the Act”] pertaining to assessment year 2019-20.
Brief facts of the case are that the assessee is an individual and engaged in the business of security agency. The appellant filed his return of income on 17.08.2020, declaring total income of INR 46,84,309/- and the same was assessed u/s 143(1) on 11-12-2020 at the income of Rs.87,33,921/- wherein the CPC made the disallowance on account of delayed payment of employees contribution towards PF/ESI u/s 36(1)(va) of the Act.
Against this order, the assessee preferred appeal before Ld.CIT(A) who dismissed the appeal of the assessee vide impugned order dated 29.11.2023 thus, the assessee is in appeal before us.
The present appeal is barred by limitation as they were filed delayed by 338 days. The Ld.AR for the assessee filed a delay condonation application wherein it is stated that the assessee is a senior citizen and suffering from a chronic diseases and due to ill health, he could not have been contacted to the Counsel to file the appeals against the order of ld. CIT(A). It is only when the pursuance of payment of demand was made from the office of AO, the assessee rushed to the counsel and filed the appeal. It is thus, requested that the delay is not malafide and requested for condonation of the same. He placed reliance on the following judgements and prayed for the condonation of delay:- Collector of Land Acquisition vs Mst . Katiji & Ors. 167 ITR 471 (i) Vijay Vishin Meghani, vs The DCIT 398 ITR 250 (Bom.) (ii) Just Steels vs DCIT (2012) 74 DTR (MA) 86 (iii) (iv) Oracle India Pvt Ltd vs. Deputy Commissioner of Income Tax (2008) 13 DTR 371 (v) Improvement Trust, Ludhiana vs Ujagar Singh & Ors. in Civil Appeal No.2395/2008
On the other hand, ld. Sr. DR for the Revenue vehemently opposed the condonation of delay and submits that there is inordinate delay of 338 days and no proper explanation is given except ill health of the assessee which also was not supported by any evidences, he thus requested that the delay in filing the appeal should not be condoned.
Heard both the parties sand perused the material available on record. From the perusal of the delay condonation petition supported by an affidavit, we find that claim of the assessee of ill health could not be denied. Further looking to the old age of the assessee and his prolonged illness and further placing reliance on the judgements relied upon by the assessee, in the larger interest of justice, we condoned the delay in filing the appeal and the present appeal is admitted for adjudication.
The solitary issue in the present appeal is with respect to disallowance of employees contribution towards PF & ESI being paid delayed in terms of section 36(1)(va) of the Act.
Before us, the only contention of the assessee was that it had paid the employees contribution in accordance with the provisions of respective law within due date from the date of payment of salary thus, the same deserved to be allowed.
On the other hand, Ld. Sr. DR for the Revenue relied upon the judgement of Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. v. CIT [2022] 448 ITR 518 (SC) and requested for the confirmation of the disallowance so made.
Heard the contentions of both the parties and perused the material available on record. Apparently, there was delay in depositing the employees contribution towards PF & ESI and thus, the same is to be disallowed as has been held by Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. (supra) for which there is no quarrel on the part of the assessee also. The only request of the assessee is that delay should be counted from the actual date of payment of salary from where the liability of payment of employees contribution towards PF & ESI commenced. Accordingly, the AO is directed to verify whether the delay in deposit of employee’s contribution towards PF & ESI was from the date of actual payment of salary under the respective Act and decide the matter in accordance with law. The AO is further directed to provide reasonable opportunity of being heard to the assessee.
In the result, appeal of the assessee is partly allowed for statistical purposes.