VENKATA SATYA LAKSHMI KANTHA RAO GRANDHI,GUNTUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), GUNTUR

Facts

An individual assessee filed their return for AY 2021-22, and the AO added Rs. 4,59,827/- for delayed payment of employee's PF & ESI contributions. The assessee contended the delay was due to the banker's processing and the Covid-19 pandemic, despite generating challans on time. The Ld. CIT(A) dismissed the appeal, relying on the Supreme Court's decision in Checkmate Services Private Limited vs. CIT.

Held

The Tribunal upheld the disallowance, stating that delay in depositing employee's PF/ESI contributions is not excusable without proof of timely submission to bankers, following the Supreme Court's Checkmate Services judgment. It confirmed that the CPC has the power under Section 143(1) to disallow such claims if apparent from the record, and the levy of interest under Sections 234A, 234B, 234C is consequential.

Key Issues

Disallowance of employee's PF/ESI contributions due to delayed payment, power of CPC to make this adjustment under Section 143(1), and consequential levy of interest.