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Facts
The assessee appealed against the order of the Ld. Addl/JCIT upholding a disallowance of Rs. 10,84,626/- due to late payment of employee's contribution to ESIC/EPF. The assessee contended that the CIT(A) mis-interpreted relevant sections and legal precedents.
Held
The Tribunal found that the issue was no longer res integra and had been decided by the Apex Court in the case of Checkmate Services Pvt. Ltd. The Apex Court held that payments towards employee's contribution to ESIC/PF after the due date are not allowable deductions.
Key Issues
Whether late payment of employee's contribution to ESIC/EPF is allowable as a deduction.
Sections Cited
36(va), 2(24)(x), 43B
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Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE
The Assessee has filed the instant Appeal against the Order of the Ld. Addl/JCIT(Appeal)-1, Jaipur dated 28.10.2024, relating to assessment year 2020-21.
At the time of hearing, ld. Counsel for the assessee submitted that Ld. CIT(A) made a substantial error, both factually and legally, by mis-interpreting the provisions of Section 36(va) read with Section 2(24)(x) and Section 43B, alongwith various legal precedents relevant to the assessment year 2020-21, thereby upholding the disallowance of Rs. 10,84,626/- due to the late payment of employee contribution to ESIC/EPF. Per contra, Ld. DR relied upon the order of the Ld. CIT(A).
We have both the parties and perused the records. We find that the issue involved in this appeal is no longer res integra and has been decided in favour of the Revenue by the decision of the Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. vs. CIT-I., wherein it has been held that payment towards employee’s contribution to ESIC/PF after the due date prescribed under the relevant statutes is not allowable deduction. Hence, Ld. CIT(A) has taken a correct decision of dismissal of appeal of the assessee, by relying upon the aforesaid precedent of the Hon’ble Apex Court, therefore, we uphold the order of the Ld. CIT(A) and reject the grounds raised
in the instant appeal.