M/S EDAC ENGINEERING LIMITED,CHENNAI vs. ADIT,CPC, BENGALURU

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ITA 68/CHNY/2023Status: DisposedITAT Chennai28 March 2023AY 2019-204 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the disallowance of delayed deposit of employees' contribution to PF & ESI is justified, as the payments were made beyond the due dates prescribed by the respective statutes. The Supreme Court's decision in M/s. Checkmate Services P.Ltd Vs. CIT was followed.

What were the facts?

The assessee made delayed payments of employees' contribution to PF & ESI. The Assessing Officer disallowed this amount under Section 36(1)(va) read with Section 2(24)(x) of the Act. The CIT(A) confirmed this disallowance.

What were the issues?

Whether delayed payment of employees' contribution to PF & ESI is disallowable under the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 2(24)(x)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGH, VICE- & SHRI G.MANJUNATHA

Hearing: 28.03.2023

PER MAHAVIR SINGH, VP: This appeal by the assessee is arising out of order passed by the Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi vide appeal No. ITBA/NFAC/S/250/2022-23 / 1047559141(1) dated 22.11.2022.

1.

The assessment was completed by the ADIT., CPC., Bengaluru for the relevant assessment year 2019-20 by intimation u/s.143(1) of the Income Tax Act, 1961 (hereinafter “the Act”) vide order dated 20.05.2020.

2.

This appeal was fixed for hearing before the Bench twice, but none represented. When this appeal was fixed for to-day and called for hearing, the assessee filed adjournment petition, seeking adjournment for two weeks. At this, the learned Sr. DR pointed out that this issue before the Bench raised by the assessee is as regards to order of CIT(A) confirming action of the Assessing Officer disallowing payment in respect of employees contribution to PF & ESI, which is covered by the decision of the Hon'ble Supreme Court in the case of M/s. Checkmate Services P.Ltd. Vs. CIT in Civil Appellate jurisdiction Civil Appeal No. 2833 of 2016 dated 13.10.2022.

3.

At this point, matter was taken up for hearing. We have heard the ld.Sr.DR and gone through facts and circumstances of the case.

4.

Brief facts are that the CPC., Bengaluru processed return u/s.143(1) of the Act on 20.05.2020 and made disallowance being delayed deposit of employees contribution to PF & ESI as is disclosed in the auditors’ report in Form No.3CD amounting to Rs.2,47,93,000/- u/s. 36(1)(va) r.w.s.2(24)(x) of the Act. The Assessing Officer noted that the employees contribution to PF & ESI was paid beyond due date of respective statutes i.e., PF & ESI Acts respectively and therefore, the AO made disallowance of Rs.2,47,93,000/- u/s. 36(1)(va) r.w.s.2(24)(x) of the Act. The CIT(A) following decision of the Hon'ble Supreme Court in the case of M/s.

Checkmate Services P.Ltd Vs. CIT (supra), confirmed action of the Assessing Officer. Aggrieved, now the assessee is in appeal before us.

5.

We noted that this issue stands concluded by the decision of the Hon'ble Supreme Court in the case of M/s. Checkmate Services P.Ltd Vs. CIT (supra) and admittedly, payments were made beyond due date as prescribed in the respective statutes i.e., PF & ESI Acts. Hence, the Assessing Officer has rightly disallowed and the CIT(A) has rightly confirmed action of the AO. We, therefore, confirm orders of the lower authorities in regard to disallowance of delayed deposit of employees contribution to PF & ESI and dismiss appeal of the assessee.

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