SANDEEP NATWARLAL MEHTA,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CPC, BENGALURU

This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi [‘the CIT(A)’] dated 30.07.2021 for the assessment year 2018-19.

Briefly, the facts of the case are that during the course of proceedings for the assessment year under consideration, the DCIT, CPC, Bangalore made disallowance of Rs.1,67,730/- in the 143(1) of the Income Tax Act, 1961 (‘the Act’) dated 21.05.2019 on the ground that the appellant had not deposited the employees’ share of PF and ESI etc within due date prescribed under respective Statutes, but paid before due date for filing Return of Income under the provisions of section 139(1) of the Act. On appeal before the ld. CIT(A), the ld. CIT(A) confirmed the said disallowance. 3. Being aggrieved, the appellant is in appeal before us in the present appeal. 4. We heard the rival submissions and perused the material on record. The only issue relates to the confirmation of disallowance of Rs.1,67,730/- made by the DCIT, CPC, Bangalore u/s 36(1)(va) of the Act on account of late deposit of the Employees’ share of PF and ESI etc. 5. At the outset, ld. AR appearing on behalf of the appellant submitted that an identical issue has been decided in recent decision of Co-ordinate Bench of this Tribunal in the case of Prashant Arun Sangai vs. ADIT in for the assessment year 2019-20 order dated 22.06.2022, wherein, the Tribunal decided the issue in favour of the assessee. Referring to this decision of the Tribunal (supra), he submitted that principle of consistency should be applied to the facts of the present case. The ld. CIT-DR has expressed no objection on this submission of the assessee.

Considering the submission of the ld. AR and perusing the recent decision of the Tribunal (supra), we find that the identical issue was came up before this Tribunal in the case of Prashant Arun Sangai (supra) wherein the Tribunal decided the similar issue in favour of the assessee relying on the decision of the Hon’ble Himachal Pradesh High Court in the case of CIT vs. Nipso Polyfabriks Ltd. (2013) 350 ITR 327 (HP). The relevant paragraphs of the said decision of the Tribunal (supra) are extracted herein under :- “4. We have heard the ld. DR and gone through the relevant material on record. There is no appearance from the side of the assessee despite notice. We are, therefore, proceeding to dispose of the appeal ex parte qua the assessee on merits.

It is seen as an admitted position from the impugned order as well as the statement of facts before the ld. first appellate authority that the assessee did deduct employees’ share of EPF and ESI and paid the same after the due date under the respective legislations but before the time stipulated for filing return u/s 139(1) of the Act for the year under consideration. In our opinion, this issue is no more res integra in view of several judgments allowing deduction u/s 36(1)(va) of employees’ share of contribution deposited after due date under the respective Acts but before the date prescribed u/s 139 of the Act. The Hon’ble Himachal Pradesh High Court in CIT vs. Nipso Polyfabriks Ltd. (2013) 350 ITR 327 (HP) has held that there exists no difference between employees or employer’s contribution and both are to be allowed as deduction if deposited before the due date.