RAJESH MARU,MHOW vs. ITO-5(1), INDORE, INDORE

ITA 838/IND/2025Status: DisposedITAT Indore12 October 2026AY 2022-202311 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, Rajesh Maru, filed appeals against the orders of the National Faceless Appeal Centre (NFAC) for Assessment Years (AY) 2022-23 and 2023-24. These orders confirmed the assessment orders passed by the Assessing Officer (AO) under section 143(3) read with section 144B of the Income-tax Act, 1961. The assessee, engaged in man power supply, had declared total incomes of Rs. 87,31,170/- (revised to Rs. 17,05,170/-) for AY 2022-23 and Rs. 60,45,260/- for AY 2023-24. The AO assessed total incomes at Rs. 88,70,335/- for AY 2022-23 and Rs. 1,25,98,505/- for AY 2023-24, making additions for late payment of employee's PF/ESIC contributions and undisclosed business receipts. The CIT(A) upheld these additions.

What did the Tribunal hold?

The Tribunal partly allowed the appeals. Regarding the disallowance for late payment of PF/ESIC contributions, the Tribunal noted the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT-1, which disallowed expenditures due to statutory violations. However, for specific amounts (Rs. 11,54,053/- for AY 2022-23 and Rs. 17,60,258/- for AY 2023-24), the assessee demonstrated that payments were made in the next month, extending the due date as per Section 38 of the PF Act, 1952, making them allowable under Section 36(1)(va). These grounds were allowed for statistical purposes, directing the AO to verify payments and challans. Concerning the addition of Rs. 51,261/- as undisclosed business receipts, the Tribunal found these to be reimbursements and credit notes not liable to tax, thus deleting the addition. For the disallowance of interest and charges on delayed PF/ESIC remittances, the Tribunal held that such charges are generally penal and not allowable, citing Prakash Cotton Mills Pvt. Ltd. vs. CIT. This ground was dismissed.

What were the issues?

1. Whether the CIT(A) erred in sustaining the disallowance of Rs. 70,25,008/- (AY 2022-23) and Rs. 57,25,174/- (AY 2023-24) for late payment of employees' contribution towards PF and ESIC, contrary to the provisions of the Act and material on record? The assessee argued that payments were made in accordance with applicable provisions, and in some cases, the due date was extended as per Section 38 of the PF Act, 1952, seeking relief for specific amounts. The revenue relied on the orders of the AO and CIT(A). 2. Whether the CIT(A) erred in sustaining the addition of Rs. 51,261/- as undisclosed business receipts for AY 2022-23? The assessee contended these were reimbursements and credit notes not in the nature of income. The revenue relied on the order of the CIT(A). 3. Whether the CIT(A) erred in sustaining the disallowance of Rs. 8,28,071/- for interest and other charges on delayed PF/ESIC remittances under Section 37 for AY 2023-24? The assessee claimed these were not penal in nature. The revenue relied on the order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 37(1),Section 143(3),Section 144B,Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI PARESH M. JOSHI & SHRI ARVIND SONI

For Appellant: Shri Vijay Bansal & Shri Chirayu Sodani, Ars
For Respondent: Shri Binay Kumar Rai, Sr, DR
Hearing: 28.09.2026Pronounced: 12.10.2026

PER ARVIND SONI, ACCOUNTANT MEMBER:

Both appeals have been filed by the assessee against the order dated 23.07.2025 & 29.07.2025 passed by the National Faceless Appeal Centre/-Addl/JCIT (A)- Delhi, [hereinafter referred to as "the ld. CIT(A)"] for Assessment Years 2022-23 & 2023-24 arising out of assessment order

Rajesh Maru ITA No. 838 & 839/Ind/2025

framed under section 143(3) read with section 144B of the Income-tax Act, 1961 ("the Act").

2.

The assessee is an individual engaged in doing the business of man power supply and filed his return of income

on 31.10.2022 & 30.10.2023 declaring total income of Rs.87,31,170/- (subsequently revised

The order continues below.

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