LALL CONSTRUCTION COMPANY ,NEW DELHI vs. ASSISTANT DIRECTOR OF INCOME TAX, CENTRALIZED PROCESSING CENTRE, BENGALURU, KARNATAKA

सुनवाईक�तारीख/ Date of hearing: 07.04.2025 09.04.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER SHRI C.N. PRASAD, J.M. This appeal is filed by the assessee against the order of the Ld.CIT(Appeals)-NFAC dated 18/07/2024 for the assessment year 2020-21. Assessee has raised the following grounds: - 1. “That the rectification order dated 15.12.2022 passed under Section 154 read with Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year (‘AY’) 2020-21 by the Assistant Director of Income Tax, CPC Bengaluru (hereinafter referred to as ‘CPC’) and the disallowance made are illegal, bad in law and without jurisdiction. The National Faceless Appeal Centre (hereinafter referred to as ‘NFAC’) vide order dated 18.07.2024 has also grossly erred in sustaining the said disallowance.

2. That in view of the facts and circumstances of the case, the CPC has erred on facts and in law, in making the disallowance on account of late deposit of ESI and PF under Section 36(1)(va) of the Act amounting to Rs. 7,72,180/- during the relevant Assessment Year. The NFAC vide its order dated 18.07.2024 too has grossly erred in sustaining the same.

3. That in view of the facts and circumstances of the case, the CPC has erred on facts and in law, in not considering that the addition has been made under Section 154 read with Section 143(1) of the Act and the same is beyond the scope of the said provision and as such the CPC had no power/authority/jurisdiction to make the said addition u/s 143(1) of the Act. The NFAC vide its order dated 18.07.2024 too has grossly erred in sustaining the same.

4. That in view of the facts and circumstances of the case, the CPC has erred on facts and in law, in not appreciating that no disallowance is called for where employee's share of contribution is paid before the due date of filing the return under Section 139(1) of the Act. Therefore, the disallowance amounting to Rs.7,72,180/- made on this account is illegal, bad in law and liable to be deleted. The NFAC vide its order dated 18 07.2024 too has grossly erred in sustaining the same.

5. That in view of the facts and circumstances of the case, the NFAC has erred on facts and in law, in not considering that the month in which the salary is actually disbursed to the employee should be considered as the relevant month of deduction for the purpose of calculating the due date of deposit of Employee 2

Provident fund and Employees' State Insurance as held in various judgments. 6. That in view of the facts and circumstances of the case, the NFAC has erred on facts and in law, in interpreting the judgments quoted in its order dated 18.07.2024 passed against the assessee.

The Assessee craves leave to add to, alter, amend and/or withdraw any grounds of appeal either before or during the course of bearing appeal.”

2. Ld. Counsel submits that the only issue in appeal is in respect of disallowance of employees’ contribution to PF and ESI, u/s 36(1)(va) of the Act. Ld. Counsel for the assessee submits that in so 3 far as employees’ contribution to PF & ESI is concerned the due date for deposit of PF & ESI shall be reckoned from the month in which disbursement of salary was made. In other words, the Ld.

Counsel submits that for computing the period of delay “month” to be considered is the month in which salary/wages are disbursed by the assessee. For this proposition reliance was placed on the decision of the Kolkata Bench of the Tribunal in the case of Kanoi Paper & Industries Ltd. s. ACIT (75 TTJ 448). Reliance was also placed on the following decisions and submitted that on identical facts the Delhi Bench of Tribunal restored the issue to the file of the Ld. Assessing Officer for examining the due date in the light of the above decisions: -

3. Vigilant Security Placement and Detective Services (P) Ltd. Vs. DCIT (ITA No.2740/2022 dated 13/06/2023).