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Facts
The assessee appealed against the order confirming the disallowance of employers' contribution to Provident Fund. The disallowance was made for payments deposited after the due date for filing the Income Tax Return.
Held
The Tribunal held that the employers' contribution to PF, which was deposited before the due date of filing the return u/s.139(1), should be allowed. However, the disallowance for employees' contribution to PF and ESI, deposited after the due date, was confirmed.
Key Issues
Whether employers' contribution to PF deposited before the due date of filing the return is allowable? Whether employees' contribution to PF and ESI deposited after the due date is disallowable?
Sections Cited
154, 250, 139(1), 36(1)(va), 43B
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Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 04.04.2025 of Addl/JCIT (A)-4 Kolkata passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Rectification Order dated 30.09.2021 passed u/s.154 of the Act.
Assessee has raised following grounds of appeal :
“1. On the facts and in the circumstances of the case and in law, lower authorities have erred in making an addition of Rs. 15,09,924/- towards late payment of Employers contribution to Provident Fund dues as the same is allowable as the payment is made before the due date of filing of Income Tax return for the A.Y 2020-21.
Smartenviro Systems Private Limited Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.”
3. At the outset, Ld. Counsel for the assessee submitted that ld.CIT(A) erred in confirming the disallowance of Employers contribution at Rs.15,09,924/- which was deposited prior to the date of furnishing the return of income u/s.139(1) of the Act by treating it as Employee’s contribution towards PF and ESI and applying the judgment of Hon’ble Apex Court in the case of Checkmate Services (P.) Ltd. Vs. CIT (2022) 143 taxmann.com 178 (SC).
4. On the other hand, ld. DR supported the order of ld.CIT(A) but failed to controvert the submissions made by ld. Counsel for the assessee.
We have heard the rival contentions and perused the record placed before us. We notice that the assessee is Proprietary Limited Company and there was disallowance of Rs.16,336/- for late payment of employees contribution to PF and disallowance u/s.36(1)(va) at Rs.15,09,924/- for late payment of Employers contribution to PF. We however going through the impugned order of ld.CIT(A) and the details mentioned therein observe that the Employers contribution to PF at Rs.15,09,924/- deserves to be allowed because the payments of the same were made before the due date of filing of the return u/s.139(1) for A.Y. 2020-21. This fact is duly supported by the Audit Report and the observation of Auditor in the respective column annexed to Tax Audit Report. We further note that ld.CIT(A) has actually confirmed the disallowance at Rs.18,16,726/- u/s.36(1)(va). For arriving at this figure,
So far as employees contribution to PF and ESI which has been deposited after the due date amounting to Rs.3,06,802/- is concerned, the same deserves to be disallowed in view of the ratio laid down in the case of Checkmate Services (P.) Ltd. Vs. CIT (supra) . However, ld.CIT(A) has inadvertently disallowed the employers contribution of Rs.15,09,9024/- which is not covered by the judgment in the case of Checkmate Services (P.) Ltd. Vs. CIT (supra).
Before us, Ld. Counsel for the assessee fairly admitted that disallowance of Rs.3,06,802/- deserves to be confirmed. We therefore under the given facts and circumstances are of the considered view that out of the total disallowance of Rs.18,16,726/-, the disallowance made towards employers contribution at Rs.15,09,924/- is hereby deleted as the necessary condition prescribed u/s.43B of the Act has been fulfilled. So far as the remaining amount of disallowance at Rs.3,06,802/- towards delayed deposit of employees contribution to PF and ESI, the same is hereby confirmed.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced on this 12th day of September, 2025.