ATIABARI TEA COMPANY LIMITED,SEVOKE ROAD SILIGURI vs. D.C.I.T., CIRCLE - 1(1),, JALPAIGURI

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA Nos.3164/Kol/2025 (Assessment Year: 2024-25)

Atibari Tea Company Ltd. DCIT, Circle-1(1), Jalpaiguri Vs Arun Tea Warehouse Complex, Siliguri 734001. (PAN: AACCA5652K) (Appellant) (Respondent)

Assessee by : Shri S. K. Tulsiyan, Advocate & Lata Goyal, CA Revenue by : Shri Pankaj Pandey, Addl. CIT, Sr. DR Date of Hearing : 13.07.2026 Date of Pronouncement : 13.07.2026

ORDER Per George Mathan, JM: This is an appeal filed by the assessee against the order of the ADDL/JCIT(A) RANCHI [hereinafter referred to as the ‘CIT(A)’] in appeal no. ADDL/JCIT(A) RANCHI/10053/2023-24 dated 21.10.2025 for the assessment year 2024-25.

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“11. In view of the conflicting opinion, as referred to above, we would like to look into this issue….” 3.1 The entire decision of the Hon’ble Supreme Court in the case of Woodland (Aero Club) Pvt. Ltd. v. ACIT referred to supra reads as follows:

“1. The High Court recorded the following findings as regards as the issue in question. i. Employer's contributions under Section 36(1)(iv) and employees’ contributions covered under Section 36(1)(va) read with Section 2(24)(x) are fundamentally different in nature and must be treated separately. ii. Employees' contribution deducted from their salaries Reason: are deemed to be income under Section 2(24)(x) and are held in trust by the employer. The employers can claim deduction only if they deposit these amounts on or before the statutory due date under Section 36(1)(va).

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iii. The non-obstante clause in Section 43B cannot be applied to employees' contributions governed by Section 36(1)(va). iv. Alom Extrusions (supra) has been distinguished as the same has not considered Sections 2(24)(x) and 36(1)(va). v. Explanation 5 to Section 43B was not considered at all while arriving at the decision that employees' contribution must be deposited on or before the due dates under relevant statutes.” 2. As per Section 2(24)(x), any amount recovered by the employer from the employees towards their contribution to any provident or superannuation fund or any other fund set up under the provisions of the ESI Act, 1948 or any other fund for the welfare of the employees is income. 3. Section 36(1)(va) of the Act says that any sum so received by the assessee - employer from his employees to which provisions of Section 2(24)(x) applies, the assessee - employer shall be entitled to deduction while computing income under Section 28, if such sum is credited by the assessee - employer to the employees account before the due date. 4. The Explanation to Section 36(1) (va) says that the 'due date' means the date by which the assessee -cemployer is required to credit the employees contribution in the relevant fund under any Act, Rule, Order or Notification issued thereunder. 5. There are two School of thoughts as regards the interpretation of the words “due date”. 6. A combined reading of the Section 2(24)(x) and that Section 36(1) (va) of the Act, prima facie is indicative that any sum received by the assessee - employer from any of his employees as contribution towards PF & ESI is the income of the assessee under Section 2(24)(x) and it continues to be so, unless it is credited by the assessee - employer to the employee's account in the relevant fund on or before the due date specified under the relevant PF, ESI Act. 7. The employee's contribution towards PF, ESI received by the assessee - employer is his income under Section 2(24)(x) and if he wants to have it deducted from his income under Section 36(1)(va), he must credit the same to the employee's account in the relevant fund on or before the due date specified under the relevant PF,ESI Act. 8. The aforesaid view is supported by the following judgments of the High Courts:- (i) Unifac Management Services (India) (P.) Ltd. v. Dy. CIT [2018] 100 taxmann.com244 [2019] 260 Taxman 60/[2018] 409 ITR 225 (Mad.), (ii) CIT v. Gujarat State Road Transport Corpn. [2014]41 taxmann.com 100/366 ITR 170/223 Taxman 398 (Guj.), (iii) CIT v. Merchem Ltd. [2015] 61 taxmann.com 119/235 Taxman 291/378 ITR 443 (Ker.), (iv) B.S. Patel v. Dy. CIT [2010] 326 ITR 457/[2008] 171 Taxman 304 (MP) and (v) Popular Vehicles & Services Pvt Ltd v. CIT [2018] 96 taxmann.com 13/257 Taxman 120/406 ITR (Ker).

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ITA No.3164/Kol/2025 5. We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the issue in the decision of Hon’ble Supreme Court in the case of Checkmate Services (P) Ltd. vs. CIT is now under fresh consideration before Hon’ble Supreme Court in the case of Woodland (Aero Club) Pvt. Ltd. v. ACIT referred to supra and the Hon’ble Supreme Court has also considered various decisions. Admittedly the issue is a debatable issue in the present scenario. This being so, as a debatable issue is not permissible in an adjustment made in an intimation issued u/s 143(1) by the CPC. The CPC has taken the issue of PF & ESI contribution in respect of employees, the intimation issued u/s 143(1) dated 02.06.2025 stands quashed as the issue being debatable. Liberty is however granted to the revenue to initiate proceedings within the purview of the Income Tax Act in accordance with law.

Order pronounced in the open court on 13/07/2026.

Sd/- Sd/- [Laxmi Prasad Sahu] [George Mathan] लेखा सदस्य/Accountant Member न्याययक सदस्य/Judicial Member

Dated: 13/07/2026 RS Copy of the order forwarded to: 1. Appellant - 2. Respondent – 3. CIT(A)- 4. CIT- ,

ITA No.3164/Kol/2025

//True copy// By order Assistant Registrar, Kolkata Benches