SHYAMAL KUNDU,KOLKATA vs. DCIT, CIRCLE - 32(1), KOLKATA, KOLKATA

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ITA 1112/KOL/2024Status: DisposedITAT Kolkata21 January 2025AY 2020-20217 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal partially allowed the assessee's appeal. Regarding the Rs. 2,65,767/- deposited on 16.09.2019, which was due on 15.09.2019 (a Sunday), the Tribunal directed the AO to verify and allow the claim, invoking Section 10 of the General Clauses Act, 1897. This section provides that if an act is to be done on a closed day, it can be done on the next working day. For the Rs. 1,92,205/- payment delayed due to online system malfunction, the AO was directed to verify if any extension was granted by the concerned authority. If no extension was allowed, the AO would not be justified in accepting the delayed payment as within the due date, unless a specific circular or instruction permitted it. For the Rs. 7,24,929/- payment where the due date was extended due to COVID-19, the AO was directed to examine the notification and evidence of payment to allow the deduction if paid within the extended due date. The Tribunal noted that the total addition confirmed by the Ld. CIT(A) was Rs. 56,13,470/-, and the AO was directed to verify payments totaling Rs. 11,82,901/-. The addition would be deleted after verification if found to be paid within the due date. Consequently, Ground No. 1 was partly allowed. Ground No. 2 was general and not adjudicated separately.

What were the facts?

The assessee, Shyamal Kundu, filed an appeal before the ITAT Kolkata against the order of the Ld. CIT(A) for Assessment Year 2020-21. The Ld. CIT(A) had confirmed an addition of Rs. 56,13,470/- made by the DCIT (CPC) in an intimation order under Section 143(1) of the Income Tax Act, 1961. This addition pertained to the late deposit of employees' contribution towards ESI and PF. The assessee's contention was that these contributions were deposited before the due date of filing the return under Section 139(1). The Ld. CIT(A) dismissed the appeal, relying on the Supreme Court judgment in 'Checkmate Services (P) Ltd.' which held that employees' contributions must be deposited within the due dates prescribed by the relevant statutes (PF Act, ESI Act) to be allowable as a deduction, and Section 43B(b) does not apply to such contributions. The assessee is aggrieved by this confirmation and has filed the present appeal before the ITAT.

What were the issues?

1. Whether the addition of Rs. 2,65,767/- on account of employees' contribution to ESI and PF deposited on 16.09.2019, when the due date was 15.09.2019 (a Sunday), is justified, considering Section 10 of the General Clauses Act, 1897? The assessee argued that since the due date fell on a Sunday, payment on the next working day should be considered within the due date, relying on the principle in 'Radial International' vs. DCIT. The revenue's contention, as reflected in the lower authorities' orders, is that the deposit was beyond the statutory due date. 2. Whether the addition of Rs. 1,92,205/- for provident fund deposited on the next day due to malfunctioning of the online payment system is justified? The assessee argued for relief due to technical issues and lack of intention to misuse employee funds. The revenue's position is that the payment was delayed beyond the due date. 3. Whether the addition of Rs. 7,24,929/- for provident fund payments, where the due date was extended by the Provident Fund Department due to COVID-19, is justified? The assessee contended that these payments were made within the extended due date. The revenue's stance is that the original due dates were not met.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 250,Section 139(1),Section 43B(b),Section 2(24)(x),Section 10

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Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, KOLKATA ‘C BENCH, KOLKATA

Before: SRI SANJAY GARG & SRI RAKESH MISHRA

order

: January 21st, 2025 ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

1.

This appeal filed by the assessee is against the order of the Ld. ADDL/JCIT(A)-Panchkula [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2020-21 dated 18.03.2024, which has been passed against the intimation order u/s 143(1) of the Act, dated 30.11.2021.

6.

The assessee has contended that the payments amounting to Rs. 2,65,767/- relating to ESI and PF were deposited on 16.09.2019 as 15.09.2019 was a Sunday and has relied upon the decision of the ITAT Delhi "F" Bench in the matter of Radial International Vs DCIT in order dated 18.07.2023 that if the due date for payment of funds is a holiday and the payment is made on the next date, the same should be allowed as a deduction.

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