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Facts
The assessee filed a return for AY 2014-15. The Assessing Officer (AO) disallowed Rs. 7,39,24,559/- due to delayed payments of Employees' Provident Fund (EPF) and Employees' State Insurance Corporation (ESIC) contributions, invoking Section 2(24)(x) r.w. Section 36(1)(va) of the Income Tax Act. The CIT(A) subsequently dismissed the assessee's appeal, leading to the present appeal before the Tribunal.
Held
The Tribunal remanded the matter back to the Assessing Officer. The AO is directed to re-examine the claims of the assessee regarding the delayed payments of EPF and ESIC contributions and allow them as per law after proper verification of all submitted evidence.
Key Issues
Whether the disallowance of delayed payments of EPF and ESIC contributions (both employee and employer share) was justified, and whether the CIT(A) erred in not admitting additional evidence and not deciding the appeal on its merits.
Sections Cited
250, 2(24)(x), 36(1)(va)
AI-generated summary — verify with the full judgment below
Before: SHRI SAKTIJIT DEY, VICE PREISIDENT & SMT. RENU JAUHRI
Assessee by : Shri Kapil Sanghvi Revenue by : Shri Ram Krishn Kedia Date of Hearing 02.01.2025 Date of Pronouncement 06.01.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 23.09.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2014-15.
The assessee has raised following grounds of appeal:
1. Hon'ble CIT (Appeals) erred in confirming addition made by Ld AO u/s. 2(24)(x) r.w.s. 36(1)(va) of the Act on account of delayed payment of Employer's contributions to PF & ESIC with Government which is paid before A.Y. 2014-15. All Services Global Private Limited due date of filing return of income under the Provisions of the Income Tax Act, 1961 2. Hon'ble CIT (Appeals) erred in confirming addition made by Ld AO u/s. 2(24)(x) r.w.s. 36(1)(va) of the Act on account of delayed payment of Employee's contributions to Provident Fund with Government which is paid within the Grace Period allowed under the Act 3. Hon'ble CIT (Appeals) erred in confirming addition made by Ld AO u/s. 2(24)(x) r.w.s. 36(1)(va) of the Act on account of 3 delayed payment of contribution to PF & ESIC with Government where the challan are presented to the bank within due date but the amount was credited by the bank after due date 4. Hon'ble CIT (Appeals) erred in confirming addition made by Ld AO u/s. 2(24)(x) r.w.s. 36(1)(va) of the Act on account of delayed payment of Employer's contributions to PF & ESIC with Government amounting to Rs. 7,39,24,559/- 5. Hon'ble CIT(A) erred in not allowing submission of additional evidence during the course of appellate proceedings under Rule 46A of the Income Tax Rules, 1962 merely for the reason that reference of submission of additional evidence was not mentioned in appeal memo while filing Form 35 inadvertently by the appellant 6. Hon'ble CIT(A) erred in contending that submission made during the course of assessment proceedings and in response to notice u/s. 250 merely for the reason that there are some new contentions and additional evidence produced during the course of appellate proceedings and not decided on the merits of the case.”
Brief facts of the case are that the assessee filed return declaring income of Rs. 6,63,95,880/- on 1.10.2024. The case was selected for scrutiny during which AO noticed some delay in payment of Employees' State Insurance Corporation (ESIC) contribution and Employees' Provident Fund (EPF) contribution during the year from Form 3CD. Ld. AO invoked the provisions of section 2(24)(x) r.w.s. 36(1)(va) to hold that the assessee company had defaulted in making the payment by the due date and, therefore, disallowed Rs. 1,65,55,607/- on account of delayed payments of ESIC contribution and EPF contribution Rs. 5,73,68,952/- u/s 36(1)(va) of the Act. Assessment was accordingly completed after making total addition of Rs. 7,39,24,559/- u/s 2(24)(x) r.w.s 36(1)(va) vide order dated 28.11.2016.
A.Y. 2014-15. All Services Global Private Limited 4. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A). Before Ld. CIT(A), the assessee submitted following the breakup of EPF and ESIC contributions:
Particulars PF ESIC Total Employee’s Share 2,65,46,155/- 45,48,167/- 3,10,95,322/- Employer’s share 2,74,90,765 1,13,32,2121 3,88,22,886/- 23,66,479/- 23,66,479/-
He, further, submitted that an amount of Rs. 4,11,89,365/- being the employers’ contribution should not be disallowed, as the same had been paid before the due date of filing of return. He, further, submitted that the employees’ contribution of EPF and ESIC has been paid during the grace period and as such the same should also have been allowed by the Ld. AO. However, Ld. CIT(A) vide order dated 23.09.2024, dismissed the appeal of the assessee.
Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before us.
At the outset, Ld. AR has submitted that he may be allowed to furnish requisite evidence before Ld. AO for verification and has prayed for remanding the case to back to the Ld. AO. In all fairness, Ld. DR has not objected to the said proposition. 8. We have heard the rival submission and perused the material placed before us. We, accordingly, deem it appropriate to remand the matter back to the Ld. AO to consider and allow the claims of the assessee as per law after due A.Y. 2014-15. All Services Global Private Limited verification. The assessee is also directed to submit requisite documents before Ld. AO for the purpose of such verification. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 06.01.2025.