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Facts
The assessee, engaged in the security agency business, filed his return of income declaring INR 35,85,556/-. The assessment was made at INR 66,52,618/- after disallowing employees' PF/ESI contributions due to delayed payment. The CIT(A) dismissed the assessee's appeal against this order.
Held
The Tribunal condoned the delay in filing the appeal, considering the assessee's old age and ill health. The issue was the disallowance of employee's PF/ESI contribution paid after the due date. The Tribunal directed the AO to verify if the delay was from the actual salary payment date.
Key Issues
Whether the delay in depositing employee's PF/ESI contribution should be condoned, and if the disallowance is to be confirmed based on the due date of deposit or actual salary payment date.
Sections Cited
143(1), 36(1)(va), 250
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
& 75/Del/2025 [Assessment Years : 2019-20 & 2020-21] Dileshwar Nath, vs Jurisdictional Assessing Flat No.183, Sector-9, Officer, Ward-68(5), Delhi Pocket-02, Dwarka, Range Code-73 New Delhi-110077. ITO, Civic Center, Minto PAN-ABBPN1431E Road, Press Enclave, Ajmeri Gate, New Delhi-110002. 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 25.07.2025 ORDER
PER MANISH AGARWAL, AM :
The captioned appeals are filed by the assessee against the orders, both dated 21.10.2022 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] in Appeal No. NFAC/2018-19/10016171 and Appeal No. NFAC/2019-20/10146590 u/s 250 of the Income Tax Act, 1961 [“the Act”] pertaining to assessment years 2019-20 & 2020- 21 respectively.
Brief facts of the case are that the assessee is an individual and engaged in the business of security agency. The applicant filed his return of income on 02.10.2019, declaring total income of INR 35,85,556/- and the same was assessed u/s 143(1) on 11-12-2020 at the income of Rs.66,52,618/- 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 21.10.2022 thus, the assessee is in appeal before us.
Both the appeals are barred by limitation as they were filed delayed by 734 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 734 days and no proper explanation is given except ill health of the assessee which also was not supported by Page | 2 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 appeals for both the AYrs. and both appeals are admitted for adjudication.
The solitary issue in both the appeals 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 jdugement 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, is to be disallowed as has been held by Hon’ble Supreme Court in Page | 3 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 started. Accordingly, the AO is directed to verify whether the delay in deposit the employees contribution towards PF & ESI under the respective Act was from the date of actual payment of salary and decide the matter in accordance with law. The AO is directed to provide reasonable opportunity of being heard to the assessee.
In the result, both appeals of the assessee are partly allowed for statistical purposes.
Order pronounced in the open Court on 25.07.2025.