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Facts
The assessee appealed against the CIT(A)'s order which affirmed the disallowance of employee contributions to PF and ESI, totalling Rs. 27,41,135 and Rs. 15,65,131 respectively, on the grounds that they were deposited beyond the statutory due dates but before the due date for filing the income tax return. The CIT(A) had summarily dismissed the assessee's appeal.
Held
The tribunal noted that the issue regarding the disallowance of employee contributions to ESI/PF, if deposited beyond statutory due dates but before the ITR filing date, has been settled by the Supreme Court in Checkmate Services P. Ltd. case. It was held that such dues must be deposited as per the due dates in the relevant statutes. However, the assessee was granted liberty to agitate the specific 'due date' compliance issue before the assessing authority.
Key Issues
Whether employee contributions to Provident Fund (PF) and Employees' State Insurance (ESI), if deposited beyond the statutory due dates but before the due date for filing the income tax return, are eligible for deduction under the Income Tax Act.
Sections Cited
36(1)(va), 43B, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. M. Balaganesh
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for assessment year 2018-19, arises against the CIT(A)/National Faceless Appeal Centre [in short the “NFAC”], Delhi dated 02.02.2024.
Case called twice. None appear at the assessee’s behest. It is accordingly proceeded ex-parte.
The assessee pleads the following substantive grounds in the instant appeal:
1 a. The CIT(A) has summarily dismissed the appeal filed by the assessee without discussing the grounds on merits which is unjustified, illegal and against the provisions of the Act. 2 b. The order passed is in complete disregard of the factual details and submissions filed by the appellant during the course of the assessment proceedings and 2 Ashok Kumar appeal before the Commissioner of Income Tax (Appeals). 3 c. The CIT(A) have grossly erred affirming the disallowance employees contribution to PF Rs. 27,41,135, and ESI Rs. 15,65,131/- deposited beyond due date prescribed under relevant Acts but before due date of filing of return. The relevant clauses amended with effect from 1.4.2021, which is in prospective in operation. 4 d. Ld. CIT(A) ought to have appreciated the rational of allowance of employer's contribution even if made beyond due date of filing of return under section 43B as per amendment with effect from 01.04.2004. 5 e. Ld. CIT(A) is not correct in disallowing the employees contribution to EPF u/s 36(1)(va) of the Act in view of the fact that the same had been deposited before the due date of filing of return of income and therefore the same is liable to be deleted. There is no distinction between employees and employer contribution to PF, and if the total contribution is deposited on or before the due date of furnishing return of income u/s 139(1) of the Act, then no disallowance can be made towards employees' contribution to provident fund.
Suffice to say, it is clear as per the assessee’s foregoing pleadings that hon’ble apex court’s recent landmark decision in the case of Checkmate Services P. Ltd. vs. Commissioner Of Income Tax-I (2022) 448 ITR 518 (SC) dated 12.10.2022 has already settled the issue of such ESI/PF that such dues have to be deposited as per due date(s) in the corresponding statute(s) than that of filing of return u/s 139(1) of the Act. We thus, find no merit in assessee’s sole substantive grievance in principle. We make it clear at the same time that the assessee shall indeed be at liberty to agitate the issue of “due” date compliance before the learned assessing authority in consequential computation as per law. Order accordingly.
3 Ashok Kumar 5. This assessee’s appeal is partly allowed for statistical purpose in above terms. Order Pronounced in the Open Court on 26/11/2024.