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Facts
The assessee paid employees' contributions of Rs. 7,53,68,295/- towards ESIC and EPF after the due dates prescribed under the respective Acts. This amount was added back to the assessee's income via an intimation under Section 143(1) of the Income Tax Act. The Ld. CIT(A) dismissed the assessee's appeal, upholding the AO's action, relying on the Supreme Court decision in Checkmate Services Pvt. Ltd. vs. CIT.
Held
The Tribunal, noting the absence of the assessee, held that the issue is settled by the Hon'ble Apex Court's decision in Checkmate Services Pvt. Ltd. (Supra). It reiterated that payments of employee's contributions to ESIC/PF made after the statutory due dates are not allowable deductions. Consequently, the Tribunal upheld the order of the Ld. CIT(A) and dismissed the assessee's appeal.
Key Issues
Whether the delayed payment of employees' contribution to ESIC and EPF is an allowable deduction under the Income Tax Act, and if an addition for such payment can be made under Section 143(1).
Sections Cited
143(1), 143(1)(a)
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Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI
Before: SHRI SHAMIM YAHYA, & SHRI SUDHIR PAREEK
ORDER
PER SHAMIM YAHYA, AM :
The Assessee has filed the instant Appeal against the Order of the Ld. Addl/JCIT(Appeal)-1, Noida dated 03.01.2024, relating to assessment year 2021-22 on the following grounds:- 1. That in the present case, employees’ contribution Rs. 7,53,68,295/- towards ESIC and EPF was paid after due dates prescribed under the respective Acts of ESIC and PEF. In the impugned order u/s. 143(1) of the Act the said amount of Rs. 7,53,68,295/- has been added back in the income declared in the return of income filed for the present period without any prior intimation in terms of first proviso with section 143(1)(a) of the Act to the appellant assessee to establish its claim.
2. That the issue involved in the present case being debatable / controversial and having conflicting judicial opinion s as on 4.2.2022 the day return of income for the present period was originally filed and on 14.6.2022 the day return was revised, no addition on such issue could be made u/s. 143(1) of the Act in the returned income.
That the impugned orders in the present case passed by authorities below are in teeth of the judgement of the ITAT, Delhi dated 25.11.2022 and of the ITAT Bombay dated 7.12.2022 and dated 27.4.2022 ITA No. 1785/Mum/2021.
Brief facts of the case are that in this case, the employees’ contribution Rs. 7,53,68,295/- towards ESIC & EPF was paid after due dates prescribed under the respective Acts of ESIC & EPF and vide intimation u/s. 143(1) of the Act, the said amount has been added back to the income of the assessee. Against the aforesaid, Assessee preferred before the Ld. CIT(A who vide his impugned order dated 03.01.2024 elaborately discussed the issue in dispute and by relying upon the decision of the Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. vs. CIT (Civil Appeal No. 2833 of 2016) [2022] 448 ITR 518 (SC) (FB) dismissed the appeal of the assessee by upholding the action of the AO. Aggrieved with the order of the Ld. CIT(A), assessee is in appeal before us.