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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 27.06.2024 of the Ld. Commissioner of Income Tax (Appeals)/Addl./ JCIT(A), Faridabad [“CIT(A)”] pertaining to Assessment Year (“AY”) 2018-19.
The assessee has filed this appeal with a delay of 1 day due to technical reasons. We, therefore condone the said delay and proceed to decide the appeal.
The assessee has raised the following grounds of appeal :-
1. Ground No. 1 : On the facts and in law the AO has erred in disallowing employees contribution to P. F. Rs. 18901924 which was paid before the due date of filing the return of income us 139(1) of the Act 2. Additional Ground: 23/01/2023 On the facts and in law the AO has erred in making adjustment/addition of Rs. 1,89,01,924/- in the order u/s 143(1) which was not permissible as per provisions of section 143(1) at the time of processing of impugned return.
3. Additional Ground: 10/08/2023 On the facts and in law the AO has erred in making adjustment/addition of Rs. 1,89,01,924/- in the order u/s 143(1) without verification of PF challans and by disallowing entire amount paid for PF u/s 36(1)(va) thereby treating Employers contribution and Administrative charges are Employees Contribution”
4. Briefly stated, the facts are that the assessee filed its return of income for AY 2018-19 on 13.12.2018 declaring total income of Rs.44,68,644/-. The DCIT, CPC vide intimation u/s 143(1) of the Income Tax Act, 1961 (the “Act”) dated 16.10.2019 assessed the income of the assessee at Rs.2,33,70,568/- by making addition towards disallowance u/s 36(1)(va) of the Act of Rs.1,89,01,924/- on account of delayed payment of employees contribution to Provident Fund (“PF”) as per the PF Act but before the due date of filing return of income u/s 139(1) of the Act. The impugned payments were made during 16.05.2017 to 15.05.2018.
On appeal before the Ld. CIT(A), the assessee raised an additional ground that the Ld. Assessing Officer (“AO”) has erred in making adjustment/addition of Rs.1,89,01,924/- without verification of PF challans and by disallowing entire amount paid for PF u/s 36(1)(va) of the Act thereby treating Employers contribution and Administrative charges as employees contribution. The assessee made detailed submissions in support of its above ground before the Ld. CIT(A), inter alia submitting the copies of some PF challans which have been paid within due dates of PF Act with the amounts of employees contribution separately mentioned therein. The assessee submitted detailed statement/chart containing the said details. However, the Ld. CIT(A) dismissed the appeal of the assessee relying on the decision of Hon’ble Supreme Court in the case of Checkmate Services (P) Ltd. VS. CIT (2022) 143 taxmann.com 178 (SC) dated 12.10.2022. The relevant observations and findings of the Ld. CIT(A) are reproduced below : “5.1 Grounds of Appeal
No. 01 to 02 :- These grounds of appeal are against to the addition of Rs. 1,89,01,924/- under Section 36. (1)(va) of the IT Act. 4.1.1 It is admitted fact that employees' contribution towards PF/ESI was deposited beyond the due dates prescribed under the relevant Acts. As per the provisions of Section 2(24)(x) of the Act, any contribution received by the appellant from its employees towards EPF and ESIC is the income in the hands of the appellant Further, as per provision of Section 36(1)(va) of the Act, if such contribution is deposited in the relevant fund within due date prescribed under relevant Act, the same will be allowed to the appellant as deduction. The due date under the PF Act and ESIC Act was 15th of subsequent month during the year under consideration. But, the appellant has admittedly deposited the same beyond such due date. The submission made by the appellant that even though the EPF/ESI contribution by the Employee have not been paid in time as required u/s 36(1)(va) however the same has been paid before the due date of filing of return u/s 139(1) of I.T. Act, 1961 and therefore, the same is allowable is not tenable as only employer's contribution is governed by Section 438 and allowed if paid before the due date of filing of return u/s 139(1) of I.T. Act, 1961, but the employees' contribution is governed by the Section 10( 24(x) read with Section 36(1)(va) of the Act and allowed only if deposited in the relevant fund within due date prescribed under relevant Act. The appellant has relied on various decisions of different courts, however, after the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd. vs. CIT (2022] 143 taxmann.com 178 (SC) dated 12.10.2022, it is not required to go into the details of those judgments. The Hon'ble Supreme Court has, in above mentioned case, after considering all other decisions and the provisions of the relevant sections has confirmed the stand of the department that if the employees' contribution towards EPF and ESI is not deposited within the due dates under relevant Act as mandated by the explanation to Section 36(1)(va) the same will not be allowable as deduction. Thus, there is no merit in the grounds of appeal taken by the appellant and accordingly the same is rejected/dismissed. 5.2 Grounds of appeal no. 3 :-ln this ground of appeal, the appellant craves leave to add alter delete above or any other grounds of appeal. No such option was exercised by the appellant and, as such, this ground is treated as dismissed.”
The Ld. AR contended that there certain amounts paid within due date of PF Act, the details of which have been submitted in the form of chart/statement showing actual permissible disallowance u/s 36(1)(va) of the Act along with copies of PF paid challans. He filed a paper book containing 129 pages wherein the said details which were filed before the Ld. AO/CIT(A) has been placed on record. He submitted that both the Ld. AO/CIT(A) failed to consider the same. He, therefore, prayed that the matter may be set aside to the file of Ld. AO to verify the claim of the assessee in light of the documentary evidence filed by the assessee in support of its claim.
The Ld. DR had no objection to the above request of the Ld. AR.
We have heard the Ld. Representatives of the parties and perused the material available on record and also perused the paper book filed before us by the assessee. The facts are not disputed. Admittedly, some payments were made within the due date as per the PF Act but these were not verified by the Ld. AO/CIT(A). The assessee had filed copies of PF challans and a detailed chart in support of its claim but it remained unverified by the Ld. AO/CIT(A). The Ld. CIT(A) has disallowed the entire amount of Rs.1,89,01,924/- u/s 36(1)(va) of the Act treating employers contribution and administrative charges as employees contribution. The Ld. Counsel for the assessee, therefore, requested to restore the matter back to the file of Ld. AO to verify the above claim of the assessee in light of the documentary evidence submitted before the lower authorities. Considering the totality of the facts and in the circumstances of the case and in the interest of justice and fair play, we deem it fit to set aside the issue to the file of the Ld. AO with a direction to verify the above claim of the assessee in light of the documents/evidence filed by the assessee in support of its claim which is already available on record before him and also such other documents/evidence that may be called upon during the fresh proceedings and decide the claim of the assessee afresh as a result of such verification in accordance with the fact and law. We hold and direct accordingly.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 29th January, 2025.