MCAFEE SOFTWARE INDIA PRIVATE LIMITED,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BENGALURU

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ITA 1877/BANG/2025Status: DisposedITAT Bangalore15 June 2026AY 2019-205 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the PF contributions were actually deposited within the due dates, supported by electronic challans. The initial incorrect dates in Form 3CD led to the adjustment. The Tribunal directed the jurisdictional AO to verify the actual payment dates and delete the addition if found correct.

What were the facts?

The assessee's return was processed under section 143(1) with an adjustment of Rs. 3,72,95,062 for alleged late deposit of employee PF contributions. The CIT(A) upheld this adjustment, relying on the Supreme Court decision in Checkmate Services Pvt. Ltd.

What were the issues?

Whether the disallowance for late deposit of employee PF contributions was justified when actual deposits were within due dates, and whether the Supreme Court decision in Checkmate Services was applicable at the time of intimation.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: BANGALORE

Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI KESHAV DUBEY

PER PRASHANT MAHARISHI, VICE – PRESIDENT

1.

ITA No.1877/Bang/2025 for the AY 2019-20 is filed by McAfee Software India Pvt. Ltd. against the appellate order passed by the Addl./JCIT(Appeals)-1, Noida [the ld. CIT(A)] dated 16.6.2025 wherein the appeal filed by the assessee against the intimation issued u/s. 143(1) of the Income Tax Act, 1961 [the Act] by the Central Processing Centre [CPC] on 27.8.2020 was partly allowed.

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2.

The assessee is aggrieved with the same and has preferred the appeal raising the following grounds:-

“ 1. On the facts and in the circumstances of the case and in law, the intimation order dated August 27, 2020 issued by the Centralized Processing Centre, Bengaluru ('the CPC') under section 143(1) of the Income-tax Act, 1961 ('the Act') and the order passed by the Commissioner of Income-tax (Appeals), Addl. / JCIT (A)-1, Noida [hereinafter referred to as 'CIT(A)'] to the extent prejudicial to the Appellant, is bad in law and is liable to be quashed. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the adjustment made by the CPC amounting to 3,72,95,062 on account of late payment of employee contribution to provident fund without considering the fact that the same was deposited before the prescribed due date as specified under section 36(1)(va) of the Act. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) without considering the facts of the present case erred in erroneously applying the principles laid down by the Hon'ble Supreme Court in the case of Checkmate Services Private Limited. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the date of debiting the bank account of the Appellant should have been considered as the actual date of payment rather than the actual credit to the PF authorities, thereby, resulting in an unwarranted addition which is bad in law and liable to be quashed. 5. Without prejudice to the above, on the facts and in the circumstances of the case and in law, no addition ought to be made on account of delayed contribution to provident fund on account of the following - a) amendment to section 36(1)(va) of the Act by the Finance Act 2021 is prospective in nature, and not applicable to the year under consideration and b) there were favourable judgment of the Supreme Court and various High Court at the time of filing of return of income which stated that where employee contribution is paid before the due date of filing return of income, no addition is warranted under section 36(1)(va) of the Act. That the Appellant craves leave to add, alter, amend, rescind, modify, or withdraw any of the above grounds of appeal and to submit such further or other grounds as may be necessary at or before the hearing of the appeal.” 3. The grievance of the assessee is that the disallowance of Rs.3,72,95,062 was made on account of late payment of employees contribution of PF.

ITA No. 1877/Bang/2025 Page 3 of 5

4.

The brief facts of the case show that assessee filed its return of income on 28.11.2019 at a total income of Rs.104,41,44,310. Because of the merger of Skyhigh Network Technologies P. Ltd. with the assessee, the assessee filed a revised return on 31.3.2020 and also filed a revised return on 31.3.2020 with the consolidated financial statement consequent to the merger. The CPC processed the return of income on 27.8.2020 wherein it made disallowance u/s. 36(1)(va) of the Act of Rs.3,72,95,062 on account of delay in deposit of employees contribution to PF. There are some short grant of tax credit.

5.

The assessee aggrieved with the intimation preferred an appeal before the ld. CIT(A), who passed an order on 16.6.2025 confirming the order of the CPC held that the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. v. CIT on 12.10.2022 has decided this issue and further the amendment made by the Finance Act, 2021 which are clarificatory in nature and the addition of Rs.3,72,95,062 was confirmed.

6.

The assessee aggrieved with the same is in appeal before us. The ld. AR, Sri Aliasgar Rampurwala, CA, submitted that as on the date of intimation passed u/s. 143(1) of the Act on 27.8.2020, the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. dated 12.10.2022 was not available as the decision was rendered on 12.10.2022 and therefore the ld. CPC could not have made any adjustment on account of delay in deposit of employees PF for the reason that there were conflicting decisions of various High Courts and thus the issue was highly debatable. Further the decision of the Hon’ble Karnataka High Court was in favour of the assessee. Thus on the date of passing of the intimation order the issue was squarely covered in favour of the assessee and could not have been disallowed. He relied on several judicial precedents. He further submitted that in the present case there is no delay in the deposit of employees PF. He referred to the statement of PF of Rs.1,87,03,954

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wherein the due date of deposit is 15.8.2018 stating the actual date of payment in the tax audit report of 18.8.2018, but cleared in the bank account of the assessee on the date of deposit of cheque of 14.8.2018. Further the PF of Rs.1,85,91,108 due date of which is 15.9.2018, actually paid on 16.9.2018 as per tax audit report, but cleared in the bank account on the date of deposit of cheque on 14.9.2018. He therefore submitted that there is no delay in deposit of employees contribution of PF and therefore there could not have been any disallowance. He further submitted that the date in the tax audit report were inadvertently mentioned incorrectly. He referred to the electronic challan-cum-return from the Office of PF Organistion that the above dues were deposited on 14.8.2018 & 14.9.2018 respectively. He submitted that the relevant extract of bank statement, ECR, TRNN, combined challan for the above payment. Thus, he submitted that there is no delay in deposit of tax liability of employees dues.

7.

The ld. DR, Shri Subramanian, JCIT, submitted that the ld. CIT(A) is correct that the decision of the Hon’ble Supreme Court settled the issue from the date of its enactment and the CPC has made the correct adjustment.

8.

We have carefully considered the rival contentions and perused the orders of the ld. lower authorities. The issue involved herein shows that in fact the PF dues of Rs.3,72,95,062 has been deposited by the assessee within the due date prescribed under the respective PF Act. The date of payments are also supported by electronic challan-cum-receipt. Thus, it is apparent that the PF contribution pertaining to July, 2018 was debited in the bank statement of the assessee on 14.8.2018 and contribution for the month of August, 2018 has been deposited as shown in the bank statement of assessee on 14.9.2018. Thus, it is apparent that there is no delay in the deposit of employees contribution to the PF authority. In view of the above facts, the addition made by the CPC apparently is incorrect. However, the assessee itself while determining Form 3CD has incorrectly mentioned the

ITA No. 1877/Bang/2025 Page 5 of 5

date of deposit as 18.8.2018 instead of 14.8.2018 and 16.9.2018 instead of 14.09.2018 which has resulted into adjustment. Even otherwise, the decision of the Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. was rendered on 12.10.2022 whereas the intimation u/s. 143(1) was passed on 27.8.2020, thus on the date when the intimation was passed, the issue was covered in favour of the assessee by the decision of Hon’ble Karnataka High court in the case Spectrum Consultants India (P.) Ltd. vs. Commissioner of Income-tax, Bangalore - III [2013] 34 taxmann.com 20 (Karnataka)/[2013] 215 Taxman 597 (Karnataka)/[2014] 266 CTR 94 (Karnataka)[17-04-2013] hence at the time of passing of the intimation, the issue was covered in favour of the assessee and hence such adjustment could not have been made.

9.

However, as the actual date of payment is now shown to us which was not before the ld. CIT(A) as well as the CPC, therefore we direct the assessee to show this information to the jurisdictional AO, who may verify the same and if found in order, delete the addition. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 15th June 2026. Sd/- Sd/- (KESHAV DUBEY) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE-PRESIDENT Bangalore, Dated, the 15th June 2026. *TNTS* / Desai S Murthy/ Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore BY ORDER

Assistant Registrar, ITAT, Bangalore

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