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Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: SHRI S.S.GODARA & DR.DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This assessee’s appeal for Assessment Year 2019-20 is directed against the Ld.Commissioner of Income Tax(A)[NFAC], Delhi in case no.ITBA/NFAC/S/250/2021-22/1037110720(1) dated 22/11/2021, in proceedings u/s.143(1) of the Income Tax Act, 1961 [in short “the Act”]. The grounds of appeal
raised by assessee are as under:
1. The intimation by Ld AO u/s 143(1) is without considering the representation made by the appellant.
2.The Ld. CIT(A) erred in confirming disallowance of Rs.10,67,615 being delayed payment of Employee’s share of ESIC contribution.
A.Y. 2019-20 (A) Tirupati Industrial Services Pvt. Ltd.,
The Learned AO erred in making addition and Ld CIT(A) erred in conforming the disallowance of Rs.57,47,793/- being delayed payment of Employees share of provident fund.
4. The appellant craves for leave to add/modify/alter/delete and or amend any grounds of appeal.”
2. The only issue for our consideration is disallowance on account of Employees Contribution to Provident Fund of Rs.57,47,793/- and ESIC of Rs.10,67,615/- which was paid beyond the due dates mentioned in the relevant statute. The Ground No.1 to 3 are related to the same issue.
3. Mr.J.G.Pendse the ld.AR for Tirupathi Industrial Services Pvt. Ltd. submitted that at the time of the disallowance, there was decision of the Hon’ble Bombay High Court in favour of the assessee, therefore, the AO and ld.CIT(A) were duty bound to follow the decision of Hon’ble Bombay High Court which held that if assessee deposits the Employees Contribution towards ESI/PF before due date of filing of return of income mentioned under section 139(1), then assessee is eligible for deduction under section 36(1)(va) of the Act. The ld.Counsel Mr.Pendse submitted that Hon’ble Supreme Court’s decision in the case of Checkmate Services
(P) Ltd., is a subsequent decision and it was not available when AO and ld.CIT(A) passed the order, therefore, the AO and ld.CIT(A)
A.Y. 2019-20 (A) Tirupati Industrial Services Pvt. Ltd., failed to follow the order of Hon’ble Bombay High court in the case of Gadge Patil Transport.
The ld.Departmental Representaitve(ld.DR) for the Revenue relied on the order of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs. Commissioner of Income-tax-
1. 1.
5. We have heard both the parties and perused the records. The only issue for our consideration is Employees Contribution to Provident Fund of Rs.57,47,793/- and ESIC of Rs.10,67,615/- which were paid beyond the due dates mentioned in the relevant statute. All the three grounds are related to the same issue. It is an admitted fact that in the Audit Report it is mentioned that amount of Employees Contribution to Provident Fund of Rs.57,47,793/- and ESIC of Rs.10,67,615/- was paid beyond the due date mentioned in the respective statute.
However, the issue of delayed payment of Employee’s Contribution of Provident Fund has been decided by the Hon’ble Supreme Court. The issue of delayed payment of employee’s contribution of Provident Fund & ESIC has been decided by Hon’ble SC in the case of Checkmate Services (P.) Ltd. Vs. Commissioner of Income-tax-1 vide order dated October 12, 2022 as under : Quote, “ That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees’ contributions- A.Y. 2019-20 (A) Tirupati Industrial Services Pvt. Ltd., which are deducted from their income. They are not part of the assessee employer’s income, nor are they heads of deduction per se in the form of statutory pay out. They are others’ income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. ” Unquote.
6.1 Thus, the Hon’ble Supreme Court has held that the Employee’s Contribution towards Provident Fund & ESIC has to be deposited before the due date mentioned in the respective statute, to claim deduction. In this case it is an admitted position by the assessee in the Audit Report that the amount was not deposited before the due date mentioned in The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Hence, the impugned amount has been rightly disallowed by the AO. Accordingly, the Grounds of appeal raised by the assessee are dismissed.
In the result, appeal of the Assessee is Dismissed.