CONFIDENCE PETROLEUM INDIA LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX- CIRCLE 1(2)(1), MUMBAI, MUMBAI

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ITA 3699/MUM/2025Status: DisposedITAT Mumbai31 July 2025AY 2020-21Bench: SHRI AMIT SHUKLA (Judicial Member), SMT. RENU JAUHRI (Accountant Member)1 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 as per Section 36(1)(va) of the Act, employee's contributions are deductible only if credited to the fund before the statutory due date, not just before the return filing date. The decision of the Hon'ble Apex Court in 'Checkmate Services Pvt Ltd' was relied upon.

What were the facts?

The assessee filed its return for AY 2020-21. The assessment was completed with an addition of Rs. 4,99,749/- made by CPC due to delayed payment of employee's contribution to provident fund and ESIC. The assessee claimed the deduction as the payment was made before the return filing date.

What were the issues?

Whether delayed deposit of employee's contribution to provident fund and ESIC, made before the return filing date, is allowable as a deduction under Section 36(1)(va) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 143(1),Section 139(1),Section 143(3),Section 144B,Section 250

AI-generated summary — verify with the full judgment below

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Before: SHRI AMIT SHUKLA & SMT. RENU JAUHRI

Hearing: 16.07.2025Pronounced: 31.07.2025

आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the CIT(A) National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] 13.03.2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year: 2020-21.

2.

The assessee has raised the following grounds of appeal:

1.

1. 1. That the learned CIT(A) erred in law and facts of the case and confirmed the addition of Rs. 4,99,749/- under section 36(1)(va) as processed by CPC and carried Ay 2020-21 Confidence Petroleum India Limited on by A.O. on account of delay in payment of employee’s contribution Provident Fund. The addition made therefore is totally wrong and illegal on the facts of the case.

2. That the Ld. CIT(A) failed to appreciate the fact that the delay in payment of employee’s contribution Provident Fund from the funds date, but was paid before filing of return of Income for the year.

3. That the Ld. CIT(A) failed to consider the fact that prime facie adjustment made for payment of PF by CPC was out of purview of section 143(1). The action of CPC on disallowance of PF as prime facie disallowance adjustment is totally illegal on facts and law.

4. That the Appellant craves to leave, add, alter or amend any of the ground at or before hearing.”

3.

Brief facts of the case are that the assessee filed its return declaring income of Rs. 63,95,24,490/- for AY 2020-21 on 30.01.2021. The assessment was completed u/s. 143(3) r.w.s. 144B of the Act at an income of Rs. 64,00,24,240/- which also included an addition of Rs. 4,99,749/- made by the CPC at the time of processing u/s. 143(1), on account of delay in payment of employee’s contribution of provident fund and ESIC. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A), claiming that amount of delayed payment of PF was made before the filing of return and hence the same should be allowed as a deduction. Ld. CIT(A) observed that as per provisions of Section 36(1)(va) of the Act, the assessee is entitled to claim the deduction in respect of the employee’s contributions only if there are credited to the Fund before the due date specified by the respective statute. Accordingly, Ld. CIT(A) dismissed the assessee’s appeal vide order dated 13.03.2025. Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the Tribunal.

Ay 2020-21 Confidence Petroleum India Limited 4. We have heard the rival submissions and perused the material placed before us. We find that the assessee’s case is squarely covered by the decision of Hon’ble Apex Court in the case of Checkmate Services Pvt Ltd Ors. vs CIT & Ors. [(2022]448 ITR 518 (SC)], wherein it has been held that the deposit of the employee’s share of EPF and ESI etc., can be allowed as deduction u/s. 36(1)(va) only if it is deposited before the time limits prescribed under the respective statutes and not if it is deposited only prior to the due date of filing returns u/s. 139(1) of the Act.

5.

In view of the above decision of the Hon’ble Apex Court, the order of Ld. CIT(A) is justified and deserves to be held up. The assessee’s appeal is accordingly dismissed.

6.

In the result, the appeal of the assessee is dismissed

Order pronounced in the open court on 31.07.2025. Sd/- Sd/- AMIT SHUKLA RENU JAUHRI (न्यानयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 31.07.2025 दिव्य रमेश न ुंिग वकर/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file.

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