DVB DESIGN AND ENGINEERING PROP SRI DARSHAN V BHATIA,HYDERABAD vs. DCIT, CIRCLE-2(1), HYDERABAD

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ITA 248/HYD/2023Status: DisposedITAT Hyderabad13 June 2023AY 2020-214 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 if employees' contribution to PF & ESI is not deposited before the statutory due dates, it cannot be allowed as a deduction. The addition made by the CPC and confirmed by the CIT(A) was upheld.

What were the facts?

The assessee made additions on account of late payment of employees' contribution to PF & ESI. The amounts were deposited before the due date of filing the return of income but after the statutory due dates under the respective Acts.

What were the issues?

Whether employees' contribution to PF & ESI deposited after the statutory due dates but before the return filing due date is allowable as a deduction.

Which sections of the Income-tax Act were involved?

Section 43B,Section 36(1)(va),Section 2(24)(x)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘A ‘ Bench, Hyderabad

Before: Shri R.K. Panda & Shri Laliet Kumar

For Appellant: Shri Santi Pavan Kumar
For Respondent: Shri Kumar Aditya, DR
Hearing: 12/06/2023Pronounced: 13/06/2023

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A ‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member Assessment Year: 2020-21 Shri Darshan Vijaysinh Vs. Dy. C. I. T. Bhatia, Hyderabad Circle 2(1) PAN:ABXPB8421E Hyderabad (Appellant) (Respondent) Assessee by: Shri Santi Pavan Kumar, Revenue by: Shri Kumar Aditya, DR Date of hearing: 12/06/2023 Date of pronouncement: 13/06/2023 ORDER Per R.K. Panda, A.M This appeal filed by the assessee is directed against the order dated 11/03/2023 passed by the learned CIT (A)-NFAC Delhi, relating to A.Y.2020-21.

2.

Addition of Rs.14,32,679/- made by the CPC on account of late payment of employees’ contribution to PF & ESI which has been confirmed by the CIT (A) NFAC, is the only issue raised by the assessee in the grounds of appeal.

3. At the time of hearing, an adjournment application was filed by the learned A.R of the assessee on the ground that he is not well and therefore, requested for adjournment of hearing.

ITA 248 of 2023 Darshan Vijaysinh Bhatia However, since the issue has now been decided by the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT vide civil appeal No.2833 of 2016 order dated 12th October 2022, the adjournment application filed by the assessee is rejected and the appeal is being taken up for hearing being a covered matter.

4.

Facts of the case, in brief, are that an amount of Rs. 14,32,679/- was added by the CPC Bengaluru in the intimation u/s 143(1) on account of late payment of employees’ contribution to PF & ESI as per the respective Acts.

5.

Before the learned CIT (A) NFAC, the assessee relying on various decisions submitted that they made all the payments before the due date of filing of the return of income and therefore, no addition/disallowance should be made.

5.1 However, the learned CIT (A) NFAC rejecting the various explanations given by the assessee held that the amount of Employees’ Contribution to PF & ESI paid by the assessee before filing of the ITR cannot be allowed as a deduction u/s 43B of the I.T. Act. He held that since the amounts were received from the Employees are deemed as income of the assessee u/s 2(24)(x) of the I.T. Act and since the same has not been deposited within the due date prescribed under the said Acts, therefore, the same is not deductible u/s 36(1)(va) of the I.T. Act. Accordingly, the appeal filed by the assessee was dismissed.

6.

Aggrieved with such order of the learned CIT (A)-NFAC the assessee is in appeal before the Tribunal.

ITA 248 of 2023 Darshan Vijaysinh Bhatia

7.

We have heard the learned DR and perused the record. It is an admitted fact that an amount of Rs.14,32,679/- being employees’ contribution to PF and ESI has not been deposited on or before the due dates provided under the respective Acts but has been deposited before the due date of filing of the return of income. We find the issue now stands decided against the assessee by the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT (Supra) wherein the Hon'ble Supreme Court has held that if the Employees’ contribution to PF & ESI are not deposited before the statutory due dates mentioned in the respective Act, the same cannot be allowed as a deduction. Since admittedly, the assessee, in the instant case, has not deposited the Employees’ Contribution to PF & ESI before the statutory due dates but has deposited the same before the due date of filing of the return of income, therefore, the learned CIT (A) NFAC was fully justified in upholding the addition/disallowance made by the CPC in the intimation u/s 143(1). The grounds raised by the assessee are accordingly dismissed.

8.

In the result, appeal filed by the assessee is dismissed.

Order pronounced in the Open Court on 13th June, 2023.

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