CHECKMATE SERVICES PVT. LTD.,,VADODARA vs. THE ACIT, CIRCLE-1(1)(1), VADODARA

Your Appellant submit that in view of facts and circumstances of the case and as per provisions of Law as then existed the payment is made before filing Return of Income and therefore disallowance is not called for. The AO has failed to give any Show Cause Order and the amount that he had around for Addition. Asst. Year : 2015-16 - 2– 3. The CIT(A) has also erred in confirming applicability of Sec.26AS and confirming addition of Rs.2,78,40,685/- as alleged difference in revenue receipt between books of accounts and as per 26AS.

The brief facts of the case are that the assessee is engaged in the business of providing security personnel services and operates as a private limited company. It filed its return of income on 29.09.2015 declaring a total income of Rs.14,94,15,640/-. The case was subsequently selected for scrutiny under CASS and the assessment was completed under Section 143(3) of the Act on 27.12.2017, making total additions of Rs.12,88,00,453/- . The assessee challenged the order before the Ld. CIT(A), who confirmed the disallowances, leading to the present appeal.

The Assessing Officer made a disallowance under Section 36(1)(va) r.w.s. 2(24)(x) of the Act for delay in deposit of employees’ contribution to PF/ESI beyond the due date as prescribed under the statute. We find that the issue stands squarely covered against the assessee by the judgment of Hon’ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation in Tax Appeal No. 637 of 2013 and the judgement of the Hon’ble Apex Court in assessee’s own case, i.e. Checkmate Services (P.) Ltd. v. CIT [2022] 143 taxmann.com 178, wherein it was held that employees’ contribution to PF/ESI is allowable as deduction only if deposited within the due dates as prescribed under the respective Acts and not merely by the date of filing return under Section 139(1) of the Act. Asst. Year : 2015-16 - 3–

1 In view of the binding precedent of the Hon’ble Supreme Court and Hon’ble High Court, we find no infirmity in the order of the Ld. CIT(A). Accordingly, this ground of appeal is dismissed.

1 We have carefully considered the submissions and the documents available on record. While the assessee has offered some reasonable explanations for the discrepancies, no detailed party-wise reconciliation has been submitted either before the Assessing Officer or the CIT(A) to substantiate these claims. Given the nature of the assessee’s business, such mismatches may not be indicative of income concealment. Therefore, in the interest of justice, we consider it appropriate to restore this matter to the file of the Assessing Officer for a fresh examination. The Assessing Officer shall re-examine the reconciliation to be provided by the assessee, after Asst. Year : 2015-16 - 4– affording the assessee a reasonable opportunity of being heard. The assessee is directed to submit a complete party-wise reconciliation along with all necessary supporting documents.

In the result, appeal of the assessee is partly allowed for statistical purposes.

अपीलाथ / The Appellant 2.  थ / The Respondent. 3. संबंिधतआयकरआयु / Concerned CIT 4. आयकरआयु(अपील) / The CIT(A)- 5. िवभागीयितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड फाईल/ Guard file.