GANGAHUCHAIAH SURESH GOWDA,BENGALURU vs. ASSISTANT DIRECTOR OF INCOME-TAX, CPC, BANGALORE

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ITA 18/BANG/2023Status: DisposedITAT Bangalore23 February 2023AY 2018-193 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the Supreme Court judgment disallows employee contributions paid late but allows employer contributions paid before the due date of filing the return under Section 139(1). However, the issue of disallowance of employer contributions was not litigated before the lower authorities.

What were the facts?

The assessee's appeals concerned the disallowance of PF & ESI contributions. The lower authorities disallowed employees' contributions paid beyond the due date prescribed by the respective Acts, relying on the Supreme Court judgment in Checkmate Services Pvt. Ltd.

What were the issues?

Whether employer's contribution to PF & ESI paid before the due date of filing the return under Section 139(1) can be disallowed. Whether the Supreme Court judgment in Checkmate Services Pvt. Ltd. applies to employer contributions.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE

Before: SHRI CHANDRA POOJARI & SHRI GEORGE GEORGE K.

For Appellant: Shri Rajagopal S. Joshi, A.R
For Respondent: Dr. Sankar Ganesh K., D.R
Hearing: 23.02.2023Pronounced: 23.02.2023

PER BENCH:

1.

These two appeals by assessee are directed against different orders of NFAC, Delhi having common date 15.11.2022 for the assessment years 2018-19 & 2019-20. The issues in these appeals are common i.e. with regard to disallowance of remittance of PF&ESI contribution to employees.

2.

The contention of the ld. A.R. is that employer’s contribution of ESI & PF is also disallowed though it was paid within due date of filing return of income u/s 139(1) of the Income-tax Act,1961 ['the Act' for short], as such, provisions of section 43B of the Act cannot be invoked and only with respect of employees’ contribution, it has not paid within the due date prescribed in respective Act which is to be disallowed in view of the judgement of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT in Civil Appeal No.2833/2016 dated 12.10.2022 and this judgement cannot be applied in respect of employer’s contribution of ESI & PF which is paid within the due date of filing return u/s 139(1) of the Act.

3.

The ld. D.R. submitted that the judgement of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. cited (supra) is applicable in respect of employees’ contribution of ESI & PF paid beyond the date prescribed in respective Act and same was applied by lower authorities.

4.

We have heard the rival submissions and perused the materials available on record. Admittedly, in this case, lower authorities disallowed employees’ contribution of PF & ESI which is paid beyond the date prescribed in respective Act by placing reliance on the judgement of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ld. cited (supra), wherein held that the disallowance u/s 36(1)(va) r.w.s. 43B of the Act is to be made in respect of employees’ ESI & PF contributions made beyond the date prescribed in respective Act. This judgement has also made it clear that in respect of ESI & PF contribution relating to the employer share paid before the due date prescribed u/s 139 of the Act which cannot be disallowed.

Page 3 of 3 4.1 Thus, the ld. A.R. submitted that the deduction in respect of ESI & PF relating to the contribution of employer share made on or before the due date of filing return of income u/s 139(1) of the Act was also disallowed by AO. On going through the orders of the lower authorities, it was noticed that this issue was not subject matter of litigation before the lower authorities or in the grounds of appeal filed before us. However, in the interest of justice, we observe that the assessee is at liberty to take appropriate remedial measures on this count before the AO, if it is so advised.

5.

In the result, appeals of the assessee are dismissed.

Order pronounced in the open court on 23rd Feb, 2023

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