CHECKMATE FACILITY AND ELECTRONIC SOLUTIONS PRIVATE LIMITED,VADODARA vs. THE DCIT, CIRCLE-1(1)(1), VADODARA

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ITA 875/AHD/2024Status: DisposedITAT Ahmedabad26 February 2025AY 2020-21Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri Makarand Vasant Mahadeokar (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the addition made by the AO for delayed payment of employees' PF/ESIC contribution was confirmed, relying on the Finance Act, 2021 amendments and the Supreme Court judgment in the case of Checkmate Services Pvt. Ltd.

What were the facts?

The assessee, engaged in providing security personnel services, filed its return for AY 2020-21 declaring income of Rs.1,12,55,240/-. The return was processed under Section 143(1) with an addition of Rs. 3,36,89,290/- for delayed payment of employee's contribution to PF/ESIC.

What were the issues?

Whether the addition for delayed payment of employee's PF/ESIC contribution is a prima-facie adjustment under Section 143(1)(a) and if it's debatable considering various High Court judgments.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 36(a)(va),Section 143(1)(a)(iv),Section 36,Section 43B,Section 143(1)(a)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH

Before: Shri T.R. Senthil Kumar & Shri Makarand Vasant Mahadeokar

Assessment Year: 2020-21 Checkmate Facility and The DCIT, Electronic Solutions Circle-1(1)(1), Private Limited Vs Vadodara 6 to 9 Amaan Towers, Fatehgunj Main Road, Vaodara-390002, Gujarat PAN: AACCC5367P (Respondent) (Appellant) Assessee Represented: Ms. Kaushani Shah, A.R. Revenue Represented: Shri Prathvi Raj Meena, CIT-DR Date of hearing : 24-02-2025 Date of pronouncement : 26 -02-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the appellate order dated 29.02.2024 passed by the Additional Commissioner of Income Tax-1, Lucknow, NFAC arising out of the intimation passed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2020-21.

2.

Brief facts of the case is that the assessee is engaged in the business as service industry dealing in providing security A.Y. 2020-21 Page No 2 Checkmate Facility and Electronics Solutions Pvt. Ltd. Vs. DCIT personnel. For the Asst. year 2020-21, assessee filed its Return of Income on 04-12-2020 declaring income of Rs.1,12,55,240/-. The return was processed u/s. 143(1) of the Act by making addition of Rs. 3,36,89,290/- being late payment of Employees Contribution towards PF/ESIC and demanded tax thereon.

3.

Aggrieved against the same, assessee filed an appeal before Ld. CIT(A) who confirmed the demand by observing as follows: 6.3 As seen from the details furnished in the Tax audit report, a sum of Rs3,36,89,290/- is liable to be disallowed on account of failure of the appellant to pay employees' contribution of PF/ESI within the prescribed due dates u/s.36(a)(va) of the Act. 6.4 Since these amounts were not disallowed in the Return of income filed by the appellant in ITR, the variance between Tax Audit Report and ITR has been duly flagged by the CPC in the computerized processing and disallowed u/s.143(1)(a)(iv)of the Act on the basis of facts furnished by the appellant for audit. ……………………… 6.13 Keeping in view the amendments made by the Finance Act, 2021 in section 36 and section 43B of the Act and that these amendments are clarificatory in nature, and the judgment of the Hon'ble Supreme Court in case of Checkmate Services Pvt. Ltd Vs. Commissioner of Income Tax -1 in Civil Appeal No 2833 of 2016, addition made by the AO on account of delayed payment of employee's contribution of PF/ESI is confirmed. 7. In the result, the Appeal of the appellant is DISMISSED.”

4.

Aggrieved against the same, the assessee is in appeal before us raising the following Ground of Appeal:

1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming addition of Rs. 3,36,89,290/- on account of debatable and contentious issue as prima-facie adjustment u/s 143(1)(a) of the Act.

A.Y. 2020-21 Page No 3 Checkmate Facility and Electronics Solutions Pvt. Ltd. Vs. DCIT

2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming addition of Rs. 3,36,89,290/- on account of delay in payment of employees' PF and ESIC contribution even when at the relevant time different High Courts have given contradictory judgments.

3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming addition of Rs.3,36,89,290/- on account of delay in payment of employees’ PF and ESIC contribution without considering the fact that payment is not made to the employees and hence, there is no question of deduction of the sum and in-turn payment under relevant acts.

4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 5. Ld. Counsel appearing for the assesse fairly conceded that the issue covered against the assessee by the Hon’ble Supreme Court Judgment in the case of Checkmate Services Pvt. Ltd. reported in 143 taxmann.com 178 (SC) vide judgment dated 12-10-2022.

6.

Recording the same, there is no merits in the grounds raised by the assessee. Therefore the appeal filed by the Assessee is hereby dismissed.

7.

In the result, the appeal filed by the Assessee is hereby dismissed.

Order pronounced in the open court on 26-02-2025 Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 26/02/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee A.Y. 2020-21 Page No 4 Checkmate Facility and Electronics Solutions Pvt. Ltd. Vs. DCIT

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