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Facts
The assessee failed to deposit employee's contribution to PF/ESI by the due dates. This was reported by the Tax Auditor, and CPC added the same to the income. The CIT(A) confirmed the adjustment, relying on Apex Court decisions.
Held
The Tribunal held that the impugned adjudication followed binding judicial precedent from the Apex Court. Specific provisions for disallowance would prevail over general provisions for deduction, and the assessee's plea regarding disputed due dates lacked substance.
Key Issues
Whether the disallowance of belated employee's contribution to PF/ESI is sustainable when the due dates were not met, despite arguments based on specific vs. general provisions and disputed due dates.
Sections Cited
143(1), 36(1)(va), 43B, 37(1)
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year: 2021-22) M/s Staunch Business Solutions ITO, Ward No. 6(1), बनाम/ SCF-7, Second Floor, 125, Kharar Chandigarh. Vs. SAS Nagar, Mohali. 140301. �थायीलेखासं./जीआइआरसं./PAN/GIR No. ADHFS-4693-M (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Vineet Krishan (Adv.) – Ld. AR ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 01-04-2025 घोषणाकीतारीख /Date of Pronouncement : 08-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2021-22 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals), Vishakhapatnam [CIT(A)] dated 27-03-2024 in the matter of an intimation issued by CPC u/s 143(1) disallowing belated payment of employee’s contribution to PF / ESI u/s 36(1)(va) r.w.s. 43B of the Act. The registry has noted delay of 26 days in the appeal which stand condoned.
From the facts, it emerges that the assessee failed to deposit employees contribution to PF / ESI by due dates as specified under those acts. The same was reported by Tax Auditor. Accordingly, CPC added the same to the income of the assessee. The Ld. CIT(A) confirmed the adjustment, inter-alia, by relying on the decision of Hon’ble Apex Court in Checkmate Services P. Ltd Vs. CIT (2022) 143 Taxmann.com 178 (SC). The Ld. CIT(A) also held that such an adjustment could be made u/s 143(1) as per the decision of Chennai Tribunal in the case of M/s Electrical India & ors. (ITA No.789/Chny/2022 & ors.). Aggrieved, the assessee is in further appeal before us.
We find that the impugned adjudication follows binding judicial precedent of Hon’ble Apex Court. Therefore, the adjudication could not be faulted with. The Ld. AR has referred to the decision of Cuttack Bench of tribunal in the case of M/s Nirakar Security & Consultancy Services Pvt. Ltd. (ITA No.98/Ctk/2022 dated 17-10-2022) to state that this deduction could be claimed u/s 37(1). However, in our opinion, specific provision would prevail over general provisions and therefore, no such deduction could be allowed to the assessee. The Ld. AR has also disputed the due dates as specified under relevant acts. However, we find that the default has been reported by Tax Auditor in the Tax Audit Report based on books of accounts as maintained by the assessee. Nothing has been shown to us that the due dates as indicated in the Tax Audit Report are not the correct due dates under relevant acts. Therefore, this plea does not have any substance.
The appeal stand dismissed. 4. Order pronounced on 08-04-2025.