MOHD RIZWAN ANSARI,ALIGARH vs. ITO WARD 4(1)(3), ALIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “DB”, AGRA BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITANo.53/AGR/2025 (Assessment Year : 2018-19) Mohd Rizwan Ansari, vs. ITO, Ward 4(1)(3), House No.49, AL-HAMD Colony, Aligarh. Post Office – CDF, Anoopshahr Road, Aligarh -202 001 (Uttar Pradesh). (PAN: AAWPA0210E) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Pankaj Gargh, Advocate REVENUE BY : Shri Harsh Siddharth Gautam, Sr. DR Date of Hearing : 23.04.2026 Date of Order : 22.06.2026 O R D E R PER S. RIFAUR RAHMAN, AM : 1. This appeal is filed by the assessee against the order of the Ld. Addl./JCIT (A)-6, Chennai [hereinafter referred to as ‘ld. CIT(A)] dated 31.12.2024 for the Assessment Year 2018-19. 2. The only issue involved in this appeal is that the ld. CIT (A) has erred in upholding the disallowances of expenditure of Rs.55,62,245/- made by the Assessing Officer representing delay in remittance of Employee’s Contribution

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towards Provident Fund invoking provisions of section 36(1)(va) of the Income- tax Act, 1961 (for short ‘the Act’) and also sustaining the addition on account of interest of Rs.84,604/- u/s 234C of the Income-tax Act, 1961 (for short ‘the Act’). 3. At the time of hearing, ld. counsel for the assessee brought to our notice relevant facts of the case and his submissions are as under. He submitted that the assessee is a Govt. contractor (labour contractor) runs business under proprietorship, M/s. R.R. Engg. Co. and filed return of income at Rs.13,00,020/- on 15-10-2018. He submitted that the case was duly processed u/s 143(1) of the Act vide intimation order dated 08-01-2020 but CPC disallowed Rs.55,62,245/- towards EPF expenses and thus income assessed at Rs.68,62,270/- and charged interest u/s 234C of the Act. He submitted that on appeal before the ld. CIT (A), ld. CIT (A) also sustained the addition. He further submitted that the amount includes both employer and employee contribution. 4. Ld. AR submitted that the nature of business of the assessee is supply of labour to U.P. Power Corporation and the delay in payment of PF is for the reason that the assessee received payment very late and on the receipt of payment from U.P. Power Corporation, salary to the employees were paid and PF was deposited. In this regard, he submitted that relevant documents are submitted in the paper book. Further he relied on the following decisions of ITAT Benches as under :- (i) ITAT, Delhi in GR Gupta & Bros. vs. ACIT in ITA No.1817/Del/2022 order dated 10.08.2023;

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(ii) ITAT, Delhi in M/s. Harbir Singh vs. ITO in ITA No.541/Del/2023 order dated 22.12.2023; and (iii) ITAT, Agra Bench in Govind Agarwal vs. DCIT in ITA No.65/Agr/2022 order dated 29.05.2025. 5. In view of his above submissions and decisions of the ITAT Benches, he pleaded that the appeal may be allowed. 6. On the other hand, ld. DR for the Revenue objected to the submissions made by the ld. AR for the assessee and submitted that the issue is squarely covered by the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. vs. CIT 143 taxmann.com 178. 7. Considered the rival submissions and material placed on record. We observed that the assessee is a labour contractor. The issue towards taxability of belated employees’ contribution to Provident Fund/ESIC is no longer res integra in the light of the judgment of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. vs. CIT (supra). The Co-ordinate Bench of the Tribunal in Cemetile Industries vs. ITO (supra) had expressed a view that such adjustment/disallowance is also permissible in the proceedings carried out under Section 143(1) of the Act. Very recently, the Co-ordinate Bench of the Tribunal in Sauleen Kaur & Others us. ITO in ITA Nos. 2249/Del/2022 & Others for Assessment Year 2018-19 & Others vide order dated 09.01.2023 has also taken a similar view and upheld the action of the Revenue. In parity with the view taken

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by Coordinate Benches, we do not see any merit in the appeal of the assessee on first principles. 8. The Co-ordinate Bench of Tribunal in the case of Sentinel Consultants Pvt. Ltd. vs. ACIT in ITA No.7 & 8/Del/2023 order dated 12.06.2023 observed in para no.9.3 of that order, that month during which the disbursement of salary is actually made would be relevant for the purposes of determination of due date. The relevant operative para of the order of the Co-ordinate Bench of Tribunal is reproduced herein under for ready reference: “9.3 We also take note of yet another plea made out on behalf the assessee towards methodology of calculation of default under the relevant PF/ESIC Act. The Ld. Counsel contends that the month during which the disbursement of salary is actually made would be relevant for the purposes of determination of due date of deposit under the respective statute. The accrual of ability towards payment of salary without actual disbursement would not fasten obligation for deposits of employees contribution in the labour Acts per se as observed by the coordinate bench in Kanoi Paper and Industries Ltd. vs. ACIT (2002) 75 TTJ 448 (Cal). This aspect has not been found to be examined by the Assessing Officer or CITIA). Hence without expressing any opinion on merits on this aspect, we deem it expedient to restore the matter to the file of designated AO. It shall be open to the assessee to place factual matrix before the AO and take such plea for evaluation of the AO. The AO shall examine this aspect and fresh order in accordance with law after giving proper opportunity.”

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under Section 36(i)(va) of the Act, if any, on the above basis, in accordance with law. The assessee shall be entitled to appropriate relief under Section 36(i)(va) of the Act where it is found that deposits have been made towards PF/ESIC within the due date from the close of month of actual disbursement of salary/wages in the light of interpretation rendered in the case of Kanoi Paper and Industries Ltd. (supra). Further we also find force from the decisions of the ITAT Benches as relied upon by the ld. AR of the assessee. 10. In view of the above, the matter is remitted back to the file of the AO for fresh adjudication of the issue in accordance with law. Needless to add, proper opportunity shall be given to the assessee to adduce evidence towards timely deposit of employee’s contribution to the PF. The disallowance should be restricted only to the extent of employee’s contribution. 11. In the result, appeal of the assessee is allowed for statistical purposes Order pronounced in the open court on this 22nd day of June, 2026.

Sd/- sd/- (SUNIL KUMAR SINGH) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 22.06.2026 TS

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