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Facts
The assessee filed appeals against the CIT(A)'s orders for AY 2019-20 and 2020-21. The main issue involved was the addition made by the AO under section 36(1)(va) r.w.s. 2(24)(x) for delayed deposit of employees' contribution to PF/ESI, which was sustained by the CIT(A). The assessee also challenged the imposition of interest and fees, and the adjustment of TDS credit.
Held
The Tribunal upheld the CIT(A)'s order regarding the addition for delayed PF/ESI contributions, citing the Supreme Court's decision in Checkmate Services Pvt. Ltd. case. It was held that if employee contribution is paid beyond the specified due date, it must be added back to the income. However, for the issue of TDS refund, the AO was directed to re-examine and decide the matter according to law.
Key Issues
Whether the addition made for delayed deposit of employees' contribution to PF/ESI is justified; validity of interest and fees imposed; correctness of TDS credit adjustment.
Sections Cited
36(1)(va), 2(24)(x), 234A, 234B, 234C, 234F, 143(1), 250
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ : NEW DELHI
Before: SHRI SHAMIM YAHYA
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’ : NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER (Assessment Year: 2019-20) (Assessment Year: 2020-21) Satendra Shrivastav, vs. ITO, Ward 5(3)(3), Office No.7, 1st Floor, Mahindra Complex, Gautam Budh Nagar. Gautam Budh Nagar, Noida – 201 301 (Uttar Pradesh), (PAN : COKPS5551J) (APPELLANT) (RESPONDENT) ASSESSEE BY : None REVENUE BY : Shri Om Prakash, Sr. DR Date of Hearing : 10.04.2024 Date of Order : 16.04.2024
ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : These appeals by the assessee are directed against the orders of the ld. CIT (Appeals)/National Faceless Appeal Centre both dated 19.11.2022 for the assessment years 2019-20 & 2020-21. 2. Since the issues are common and connected, these are being disposed of by this common order. common except the difference in amount of addition, hence grounds of appeal in AY 2019-20 are reproduced for the sake of brevity as under :-
“l. On the facts and in the circumstances of the case and in law the authorities below have not followed the proper procedure prescribed by the law before imposing tax on assessee. The action of authorities below is wrong, illegal, bad at law, misconceived and unjustified therefore it should be quashed.
On the facts and in the circumstances of the case and in law, the authorities below have erred in confirming the addition of Rs.29,04,705/- u/s 36(1)(va) r.w.s. 2(24)(x) of the Act, being on account of delayed deposit of employees' contribution to PF/ESI as per the audit report without considering all the available facts in this case. Therefore, the action of authorities below is wrong, illegal, bad at law misconceived and unjustified, therefore it should be quashed.
On the facts and in the circumstances of the case and in law the authorities below have erred in imposing the total interest and fees of Rs.1,29,050/- which is sum Rs.15,474/- u/s 234A, Rs.82,528/- u/s 234B, Rs.26,048/- u/s 234C and fee of Rs.5,000/- u/s 234F of the Income Tax Act. The action of authorities below is wrong, illegal, bad at law, misconceived and unjustified therefore it should be quashed.
4. On the facts and in the circumstances of the case and in law the authorities below have erred in adjusting the total available TDS credit of Rs.5,83,203/- against the total tax demand of Rs.12,28,101/- and raised a demand of Rs.6,44,900/- vide order passed u/s 143(1)/250 of the act whereas as per the filed income tax return there was a refund of Rs.3,85,420/-. The action of authorities below is wrong, illegal, bad at law, misconceived and unjustified therefore it should be quashed.”
The main issue involved is against the addition made by the AO u/s 36(1)(va) r.w.s. 2(24)(x) of the Income-tax Act, 1961 on account of delayed deposit of employees’ contribution to PF/ESI, which was sustained by the ld.
3 & 533/DEL/2023 CIT (A) referring to the decision of Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd.. 5. Against this order, assessee is in appeal before me. None appeared on behalf of the assessee. I have heard ld. DR for the Revenue and perused the records.
I find that the issue on merits is covered against the assessee by the decision of Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. (2022) 143 taxmann.com 178 wherein it has been held that if employee contribution of provident fund and ESI paid beyond due date as specified under the relevant Act then the same has to be added back to the income of the assessee. Respectfully following the precedent, we do not find any infirmity in the order of the ld. CIT (A). Accordingly, we uphold the same.
Apropos issue of TDS refund, the AO is directed to look into the same and decide as per law. Our above order applied mutatis mutandis to both the assessment 8. years.