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Facts
The assessee's income tax return for AY 2018-19 was processed under Section 143(1), resulting in an addition of Rs. 46,31,856/- for "Delayed Payment of Employees Contribution" towards EPF/ESI under Section 36(1)(va). This addition was subsequently confirmed by the First Appellate Authority. The assessee contends that the payments were made within the prescribed due dates, considering the actual disbursement of salary.
Held
The Tribunal observed that the assessee's tabulated data indicated the employee's contribution to EPF/ESI was deposited within the 15th of the next month following salary disbursement. Therefore, the Tribunal set aside the issue, remanding it to the Assessing Officer for fresh adjudication. The AO is directed to pass a reasoned order after verifying the details provided and offering the assessee an opportunity to be heard.
Key Issues
Whether the addition under Section 36(1)(va) for delayed payment of employee's contribution to EPF/ESI is justified when the payments were made within the statutory due dates based on the salary disbursement date.
Sections Cited
Section 250 of the Income Tax Act, 1961, Section 143(1) of the Income Tax Act, 1961, Section 36(1)(va) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: MS. MADHUMITA ROY & SH. NAVEEN CHANDRA
Appellant by : Shri M. R. Sahu, C.A. Shri Sandeep Kr. Mishra, Sr. D.R. Respondent by : Date of Hearing 09.05.2024 Date of Pronouncement 20.05.2024 O R D E R PER MS. MADHUMITA ROY – JUDICIAL MEMBER :
The instant appeal filed by the assessee is directed against the order dated 30.11.2022 passed by the Commissioner of Income Tax (Appeals) – NFAC, Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) arising out of the assessment
Jagdish Kr.. vs. ITO Asst.Year –2018-19 - 2 - order dated 08.01.2020 passed by the DCIT, CPC, Bengaluru under Section 143(1) of the Act for the Assessment Year (A.Y.) 2018-19.
Assessee filed its return of income for A.Y. 2018-19 on 31.10.2018 declaring total income at Rs.57,82,054/-, which was processed under Section 143(1) of the Act by CPC, Bengaluru and by and under Intimation dated 08.01.2020, addition to the tune of Rs.46,31,856/- made on account of “Delayed Payment of Employees Contribution” towards EPF/ESI under Section 36(1)(va) of the Act, was informed which was further confirmed by the First Appellate Authority.
Hence, the instant appeal before us.
The details of salary and wages paid to the employees, the actual date of deposit of employee’s shares of PF/ESI to the Government account and the due date for deposit of the same on the basis of salary
Jagdish Kr.. vs. ITO Asst.Year –2018-19 - 3 - and wages disbursed during the month has been narrated by the assessee before us in the following manner :
Jagdish Kr.. vs. ITO Asst.Year –2018-19 - 4 -
On the basis of the above tabulated sheet, it is the case made out by the assessee that as the due date for depositing employee’s contribution to the Govt. account is 15th of the next month of payment actually made for a particular month and since the assessee has duly remitted the same within the due date from the end of the month, in which salary was actually disbursed, the assessee would be entitled to relief under Section 36(1) of the Act and no addition, therefore, is sustainable in the eyes of law. In that view of the matter, he prays for setting aside the issue to the file of Learned AO for verification of the same on the basis of the details as narrated hereinabove. Such prayer made by the assessee has not been controverted by the Learned DR with all his fairness.
Having heard the Learned Counsels appeared for the parties and having regard to the facts and circumstances of the case, we are of the considered opinion that the issue is required to be adjudicated afresh on Jagdish Kr.. vs. ITO Asst.Year –2018-19 - 5 - the basis of the details narrated hereinabove in regard to the deposit of employee’s contribution by the employer afresh. We, thus, set aside the issue to the file of Learned AO to pass a reasoned order in light of the above observations upon granting of an opportunity of being heard to the assessee and upon considering the evidence on record and any other evidence which the assessee may choose to file at the time of hearing of the matter.
In the result, appeal of assessee is allowed for statistical purposes.