DILIP PATHAK,GUWAHATI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, GUWAHATI
What did the Tribunal hold?
The Tribunal, following the Supreme Court's decision in Checkmate Services (P) Limited, held that employees' contribution must be deposited within the due dates under the PF & ESI Acts to be eligible for deduction. Consequently, the earlier order allowing the deduction was recalled.
What were the facts?
The assessee claimed deduction for employees' contribution to PF & ESI, which was disallowed by the Assessing Officer as it was not deposited within the due dates prescribed by the respective Acts. The Tribunal initially deleted the disallowance based on a High Court ruling.
What were the issues?
Whether employees' contribution to PF & ESI, if deposited after the due date under the respective Acts but before the due date of filing the return, is eligible for deduction under the Income Tax Act.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(3)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- Checkmate Services Pvt. Ltd. v. CIT1,392 citing143 Taxmann.com 178 · 2022 · SC · Read judgment
- ACIT v. Saurashtra Kutch Stock Exchange Ltd.470 citing305 ITR 227 · 2008 · SC · Read judgment
- Calcutta in CIT v. Vijay Shree Ltd.214 citing43 Taxmann.com 396 · 2014 · HC
Income Tax Appellate Tribunal, KOLKATA-GUWAHATI ‘e-COURT’, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Rajesh Kumar
Per Rajpal Yadav, Vice-President (KZ):- The present two appeals are directed at the instance of assessee against the orders of ld. Commissioner of & 3/GAU/2022 Assessment Years: 2018-2019 & 2019-2020 Dilip Pathak Income Tax (Appeals), National Faceless Appeal Centre, Delhi dated 15th May, 2021 passed in A.Y. 2018-19 and dated 13th May, 2021 passed in A.Y. 2019-20.
Grounds of appeal taken by the assessee in both the years are common. The solitary grievance of the assessee is that the ld. CIT(Appeals) has erred in confirming the disallowance of Rs.22,54,860/- in A.Y. 2019-20 and Rs.48,20,810/- in A.Y. 2018-19. These disallowances were made by the ld. Assessing Officer on the ground that the employees’ contribution received by the assessee by way of a deduction from the salaries of the employees were not deposited in the P.F. & ESI Accounts within the due date provided in P.F. & ESI Acts. Therefore, the assessee is not entitled to claim deduction of these amounts. The disallowance has been made with the help of section 36(i)(va) read with section 2(24)(x) of the Income Tax Act.
3. Dissatisfied with the disallowance, the assessee carried the matter in appeal before the Tribunal. The Tribunal vide its order dated 7th July, 2022 deleted the disallowance by observing that the payments were made before the due date of filing of the return and as per the existing position of law laid down by the Hon’ble Calcutta High Court in the case of CIT –vs.- Vijayshree Limited reported in 43 taxmann.com 396. & 3/GAU/2022 Assessment Years: 2018-2019 & 2019-2020 Dilip Pathak
After sometime, this issue of allowability of the employees’ contribution on account of its payment before the due date of filing of the return travelled to the Hon’ble Supreme Court in the case of Checkmate Services (P) Limited –vs.- CIT reported in 143 taxmann.com 178. The Hon’ble Supreme Court has held that as per section 36(1)(va) read with section 2(24)(x), such contribution is to be paid within the due date of the limitation provided under P.F. & ESI Acts and if an assessee fails to make the payment, then, deduction of such amount will not be allowed to the assessee. The Department has filed Miscellaneous Applications No. 6 & 7/GTY/2022 before the Tribunal. The Tribunal after hearing the parties had allowed the applications of the Department vide order dated 10th August, 2023. It is pertinent to observe that Hon’ble Supreme Court in the case of ACIT –vs.- Saurashtra Kutch Stock Exchange Limited reported in 305 ITR 227 has laid down that subsequent decision of the Hon’ble Jurisdictional High Court as well as of the Hon’ble Supreme Court would brand the order of the Tribunal as suffering from apparent error if it runs contrary to the proposition of law laid down by the Hon’ble Jurisdictional High Court as well as of the Hon’ble Supreme Court on the point of law. In other words, the subsequent decision of the Hon’ble Supreme Court could make the prior order of the & 3/GAU/2022 Assessment Years: 2018-2019 & 2019-2020 Dilip Pathak Tribunal as suffering from patent error. Thus the order of the Tribunal was suffering from apparent error because it has accepted the position of law contrary to the law laid down by the Hon’ble Supreme Court. Accordingly Tribunal has allowed those Miscellaneous Applications, recalled its earlier order and restore these appeals for fresh hearing.
Fresh notice of hearing was given to the assessee but no one has come present on behalf of the assessee. With the assistance of ld. D.R., we have gone through the record carefully. Since the assessee failed to make the payment of employees’ contribution in the P.F. & ESI accounts within the due date of limitation provided under those Acts, therefore, it is not entitled for deduction as per the law laid down by the Hon’ble Supreme Court. Accordingly these appeals on this point are devoid of any merit, hence dismissed.
In the result, both the appeals of the assessee are dismissed. Order pronounced in the open Court on 29.08.2023.
More judgments on Section 36(i)(va)
- Umang Boards Limited, Jaipur vs DCIT, Circle-1 Jaipur, JaipurITA 969/JPR/2025[2018-2019]Status: Disposed18 Sept 2025AY 2018-2019
- Welfare Buildings & Estates Pvt. Ltd… vs DCIT, CPC, BengaluruITA 252/KOL/2025[2021-22]Status: Disposed24 Jul 2025AY 2021-22
- The Mahil Gailan Cooperative Agriculture… vs Deputy Commissioner of Income Tax Circle-1…ITA 106/ASR/2024[2021-22]Status: Disposed7 Jul 2025AY 2021-22
- Nashik District Supervision Co Op Society… vs ITO Ward 1(1) Nashik, NashikITA 2250/PUN/2024[2018-19]Status: Disposed7 Apr 2025AY 2018-19
- Deputy Commissioner of Income Tax… vs Ms Gondwana Engineers Limited, NagpurITA 387/NAG/2024[2015-16]Status: Disposed21 Mar 2025AY 2015-16
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