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Income Tax Appellate Tribunal, ‘C’ BENCH, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad
Per Rajpal Yadav, Vice-President (KZ):- The present two appeals are directed at the instance of assessee against separate orders of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi 1 & 1077/KOL/2023 Assessment Years: 2018-2019 & 2019-2020 Snehasish Bhaumik dated 11.08.2023 and 10.08.2023 passed in A.Y. 2018-19 and 2019-20 respectively.
The grounds of appeal taken by the assessee are common in both the years. Therefore, we take up the issues together.
3. The first common grievance of the assessee is that the ld. CIT(Appeals) has erred in confirming the disallowance of Rs.2,26,820/- and Rs.2,21,678/- in A.Y. 2018-19 and 2019-20 respectively. This expenditure has been claimed by the assessee on the ground that it pertains to employees’ contributions required to be paid in the P.F. & ESI Acts. However, as per audit report, it revealed to the ld. Assessing Officer that this amount was not paid before the due date provided under those Acts. Accordingly, Assessing Officer disallowed the claim made by the assessee.
4. On appeal, assessee has submitted that Hon’ble Supreme Court failed to consider the P.F., ESI Scheme and, therefore, the judgment is not to be followed in the case of the assessee.
5. On the other hand, ld. CIT(Appeals) has held that the issue in dispute is squarely covered by the recent decision of the Hon’ble Supreme Court in the case of Checkmate Services (P) Limited -vs.- Commissioner of Income Tax reported in 143 taxmann.com 178 (SC). The Hon’ble Supreme Court has held that employees’ contribution not paid to the respective PF & ESI & 1077/KOL/2023 Assessment Years: 2018-2019 & 2019-2020 Snehasish Bhaumik Accounts within the limitation provided under those Acts, then, the assessee will not be entitled for deduction of employees’ contribution. The disallowance is to be made as per section 36(1)(vi) and section 43B.
Before us, ld. Counsel for the assessee has reiterated his submission that we do not find any merit in this submission because this Tribunal is not meant for debating the issue, whether the Hon’ble Supreme Court’s judgment is correct or not. Being a subordinate Appellate Authority, it is bound to follow the law laid down by the Hon’ble Supreme Court. We find that ld. CIT(Appeals) correctly followed the proposition laid down by the Hon’ble Supreme Court in the case of Checkmate Services (P) Limited. Hence, this ground of appeal deserves to be rejected in both the years. Accordingly disallowance of Rs.2,26,820/- in A.Y. 2018-19 and Rs.2,21,678/- in 2019-20 confirmed by the ld. CIT(Appeals) are upheld.
7. The next common grievance of the assessee is that the ld. CIT(Appeals) has erred in confirming the disallowance of Rs.6,383/- in both the years.
8. This amount pertains to Club Subscription expenses and it has been disallowed to the assessee. On appeal, addition has been confirmed by the ld. CIT(Appeals). It is pertinent to observe that it is the assessment under section 143(1) and this type of disallowance does not fall within the purview of prima facie & 1077/KOL/2023 Assessment Years: 2018-2019 & 2019-2020 Snehasish Bhaumik adjustment. Hence, addition of disallowance of Club Subscription is deleted in both the years.
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open Court on 12/12/2023.