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Income Tax Appellate Tribunal, “SMC-A’’BENCH: BANGALORE
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC-A’’BENCH: BANGALORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AssessmentYear:2020-21 SOLIFLEX PACKAGING Asst. Director of Income-tax PRIVATE LIMITED CPC Plot No. 13,14, and 15, Road Bengaluru No. 02, Antharasanahalli Industrial Area Vs. Tumkur, KARNATAKA - 572106 PAN NO : AAWCS7349M APPELLANT RESPONDENT Appellant by : Shri K. G. Acharya, CA Respondent by : Shri Ganesh R Gale, Standing Counsel for Department. (DR) Date of Hearing : 20.12.2022 Date of Pronouncement : 05.01.2023 O R D E R This appeal filed by the assessee is against the order passed by CIT(A) dated 15.9.2022 on the following grounds of appeal:
The Learned AO has made disallowance of expenditure in respect of Employee Contribution to Provident Fund(PF) u/s 36(1)(va) of the Income Tax Act.,1961. The Learned AO has eared in disallowing the employees contribution to PF by contending that the contributions were paid beyond the due date specified under the The Employees’ PF Scheme,1952.
As per the employees’ PF Scheme, 1952, the due date specified is 15 days from the close of the month in which wages for any period are paid ( not from end of month for which wages are due). The Learned AO has failed to appreciate the fact that the employees’ contribution has been paid within Soliflex Packaging Private Limited , Tumkur Page 2 of 11 15 days from the end of the month in which wages are paid and hence, there are no delays. 3. The Appellant assessee craves leave to add, alter, amend or to delete any of the grounds of appeal
on or before hearing of appeal, and to file written submissions and paper book at the time of actual hearing before the Hon’ble ITAT
2. The brief facts of the case are that the due date for filing the return of income was 15.02.2021, whereas assessee has filed return of income on 09.03.2021 declaring income from business or profession at Rs.11,86,650/-, the return was processed 143(1)(a) on 18.12.2021 by disallowing u/s 36(1)(va) r.w.s. 2 (24)(x) of the I.T. Act. 1961 for Rs. 5,42,940/- for delayed deposit of the employees’ Contribution to PF & ESI, accordingly the income was determined at Rs. 17,29,590/-. Aggrieved from the above order, the assessee has filed appeal before CIT(A) and the assessee has also flied detailed reply and relied on some case laws, which have been considered by the ld. CIT(A) & dismissed the appeal of the assessee. Aggrieved from the order of the CIT (A), the assessee filed appeal before the Income Tax Appellate Tribunal.
The ld. AR reiterated the submissions made before the lower authorities and he has also filed written submissions which is as under:-
Soliflex Packaging Private Limited , Tumkur Page 3 of 11 Soliflex Packaging Private Limited , Tumkur Page 4 of 11 Soliflex Packaging Private Limited , Tumkur Page 5 of 11 Soliflex Packaging Private Limited , Tumkur Page 6 of 11 Soliflex Packaging Private Limited , Tumkur Page 7 of 11 Soliflex Packaging Private Limited , Tumkur Page 8 of 11 In addition to the above, he submitted that the lower authorities were not justified for making disallowance u/s 36(1)(va) r.w.s. 2(24)(x) of the Act. The assessee paid the amount of PF within the period prescribed in the respective Act. The period should be counted from the month in which the actual salary is paid to the employees but not from the month for which the salary is paid. He reiterated the judgment cited supra and also referred to section 36 & 38 of the Employee’s PF Scheme, 1952, which is placed on the paper book at page No. 21 to 23. He further requested that the matter may be sent back to Assessing Officer for the verification for the date of payment of salary to its employees and decided the Soliflex Packaging Private Limited , Tumkur Page 9 of 11 issue in the light of the judgment of Fluid Air (India) Ltd. vs. DCIT (1997) 63 ITD 182 Mumbai
The ld.DR relying on the order of the lower authorities & submitted that the CIT(A) has decided the issue on merits and he has relied on several judgments of various High Courts. He also submitted that the addition can be made while processing the return as per sec. 143(1) of the Act. In support of his arguments, he relied on the judgment of the Hon’ble Madras High Court in the case of AA520 Veerappampalayam Primary Agricultural Cooperative Credit Society Ltd. Vs. Deputy Commissioner of Income-tax reported in (2022) 138 taxmann.com 571. He submitted that the issue is squarely covered in favour of the Revenue on the recent judgment of Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs CIT-1 reported in [2022] 143 taxmann.com 178. He further submitted that the assessee did not deposit the employees’ contribution to PF/ESI within the due date as per the respective Act, which was clear from the tax audit report uploaded by the assessee at the time of filing the return of income.
After hearing both the sides and perusing the entire materials available on records and order of the authorities below I observed that the disallowance made by the AO (CPC) on the basis of audit report uploaded by the assessee and further observed that from the written submissions the assessee has paid salary as per the table above and the PF has been deposited within the 15 days from the date of payment of salary in the same month in which the salary has been paid and this fact has been brought by the assessee before me first time, therefore , considering the entire submissions from both the sides and case law relied by both the sides, I think it fit to send back this issue to the file of the AO for verification of actual date of payment of salary & PF and decide the issue following the judgment of Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs CIT-1 reported in [2022] 143 taxmann.com 178 and Fluid Air (India) Ltd. vs. DCIT (1997) 63 ITD Soliflex Packaging Private Limited , Tumkur Page 10 of 11 182 Mumbai. Accordingly appeal of the assessee is allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 05th January, 2023.