M/S. ABT LIMITED,COIMBATORE vs. ADIT CPC BENGALURU, KARNATAKA

The sole grievance of the assessee in captioned appeal is disallowance of late payment of PF / ESI dues for Rs.44.17 Lacs u/s 36(1)(va). The period of delay has been tabulated in impugned order at para 6.2 as under: - Nature of Fund Actual Due Date of Delayed Days Amount Date Payment Provident Fund 15-07-2020 14-08-2020 30 Days 12,13,140/- Provident Fund 15-08-2020 14-09-2020 30 Days 12,75,724/- Provident Fund 15-10-2020 19-10-2020 4 Days 19,27,947/- Total 44,17,081/-

During appellate proceedings, the assessee relied on EPFO Circular No.1112 dated 15.05.2020 which stated that delay in deposit of contribution during the period of Covid-19 lockdown, could not be attributed to any culpable state of mind of the employer and therefore, would not call for penal damages for delay in deposit of dues. However, Ld. CIT(A) held that granting relief from penal damages on delayed payment can by no stretch of imagination be equated with extension of due date for payment of EPF. Accordingly, the disallowance was upheld.

Before us, Ld. AR relied on the same circular and pleaded that there was minor delay due to lockdown situation arising out of COVID-19 pandemic. To support the submissions, Ld. AR referred to the decision of Kolkata bench of Tribunal in Steel House vs. DCIT (ITA No.766/Kol/2023 dated 17-10-2023) wherein similar disallowance was deleted for short delay of 3 days and 1 days respectively. The Ld. Sr. DR submitted that the issue is covered against the assessee by the decision of Hon’ble Apex Court. 4. It is undisputed fact that the impugned issue stood against the assessee by the latest decision of Hon’ble Supreme Court in bunch of appeals titled as Checkmate Services P. Ltd. Vs CIT (143 Taxmann.com 178). So far as the cited circular is concerned, the same merely exonerate the assessee from penal damages and nothing more. The decision of Hon’ble Apex Court would certainly take precedence over the cited decision of Kolkata Tribunal. Respectfully following the ratio laid down by Hon’ble Apex Court, we confirm the impugned order.