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Facts
The assessee is in appeal against the order of the CIT(A) which confirmed the disallowance of Rs.24,95,732/-. This disallowance was made because the assessee was unable to pay employees' contribution to ESI/PF accounts within the due date.
Held
The Tribunal held that the CIT(A) rightly confirmed the disallowance. The assessee failed to demonstrate that the employee's contribution was paid within the due date, thus, the deduction cannot be allowed as a business expenditure.
Key Issues
Whether the disallowance of employees' contribution to ESI/PF, not paid within the due date, is justified?
Sections Cited
36(1)(va)
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
HYBRID HEARING O R D E R PER RAJPAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 11.03.2024 passed for assessment year 2019-20. 2. The assessee has taken six grounds of appeal
, however, its grievance revolves around a single issue namely, ld. A.Y.2019-20
2. CIT(A) has erred in confirming the disallowance of Rs.24,95,732/- which was made under Section 36(1)(va) of the Income Tax Act. The assessee was unable to pay employees’ contribution to respective ESI/PF Accounts within the due date, therefore, following the judgement of Hon'ble Supreme Court in the case of Checkmate Services P.
Ltd. & Ors. VS. CIT & Ors. (2022) 448 ITR 518 (SC), addition has been confirmed.
On due consideration of the record with the assistance of ld. Representative, we do not find any merit in this appeal.
The ld. CIT(A) has rightly confirmed the disallowance. It has not been demonstrated before us as to how employees’ contribution was paid to respective ESI/PF accounts within due date and if it was not paid within due date, then deduction cannot be allowed to the assessee as business expenditure.
The ld. CIT(A) has rightly placed reliance upon the judgement of Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. & Ors. VS. CIT & Ors. (2022) 448 ITR 518 (SC). Accordingly, this appeal is dismissed. A.Y.2019-20 3
In the result, appeal of the assessee is dismissed.