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Facts
The assessee, Shah Manufacturers, appealed against the disallowance of Rs.10,88,030/- for employees' contribution to the provident fund, made under section 36(1)(va). The disallowance was due to the payment being made one day after the due date of June 15, 2021, which was attributed to technical glitches in the EPFO portal.
Held
The Tribunal held that the assessee was not at fault for the one-day delay in depositing the employees' contribution to the provident fund. The delay was caused by technical issues with the EPFO portal, which prevented the assessee from uploading the challan on the due date. Evidence in the form of screenshots was provided to support this claim.
Key Issues
Whether the disallowance of employees' provident fund contribution is justified when the delay in payment was due to technical glitches in the EPFO portal and not due to the assessee's fault.
Sections Cited
36(1)(va), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, „F„ BENCH
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 15/04/2024 passed by CIT(A)-48, Mumbai in relation to adjustment made u/s.143(1) for the A.Y.2022-23. 2. The assessee is mainly aggrieved by disallowance of amount deposited towards employees’ contribution to the employee provident fund of Rs.10,88,030/- made u/s.36(1)(va) on the ground that same has been filed beyond the due date specified in M/s. Shah Manufacturers the respective Act. The ld. CIT(A) has confirmed the disallowance following the judgment of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. vs. CIT (2022) 143 taxmann.com 178.
We have heard both the parties and also gone through the material placed referred to us. Before us ld. Counsel for assessee submitted that here in this case the delay in depositing the employees’ contribution for the month of May 2021 which was to be deposited on or before 15/06/2021 was deposited on 16/06/2021. The reason for delay of one day was that, there were technical glitches in the EPFO portal and challans could not be uploaded. In support, he has filed screen shots where assessee had tried to upload the payment challan, but the portal could not upload the payment challans and it stated that “page is unresponsive” and mentioned the following narration “you can wait for it to become responsive or exit the page”. It has been pointed out that Assessee thereafter kept on trying on but same message appeared and for every attempt made by the assessee, screen shots have been filed in support of this contention. Finally, on that day assessee could not file the challan. The assessee filed the challan on the next date, i.e., on 16/06/2021 for which he also filed payment confirmation receipt.
On the other hand Ld. DR submitted that, the law provides the due date and there is nothing in record that time can be for due date for payment. Law has to be strictly adhered or assessee M/s. Shah Manufacturers should have got the certificate to this affect from EPFO Department.
From the aforesaid facts and material brought on record, there can be no dispute that, here in this case there was no fault on the part of the assessee to deposit employees’ contribution to the EPF within due date of 15/06/2021, because when assessee tried to upload the payment challan for employees’ contribution on the due date, same could not be uploaded due to some technical fault on the portal of EPFO for which assessee has filed sufficient evidences in the form of screen shots. Once there was a technical glitch and non-functioning of EPFO site for generating ECR required for making online payment, then it cannot be held that assessee failed to deposit the employees’ contribution to EPF within due date. In such a case where circumstances are beyond the control of the assessee and no fault on part of the assessee despite all diligent efforts, stringent view cannot be taken to make disallowance of payment and treating it as income of the assessee. Technical glitches and portal failure of the Government site cannot be attributed to the citizens’ failure. Once the glitch was ruled out, very next day assessee has filed challan on 16/06/2021. The screen shot of the same is reproduced hereunder:-
Thus, under these facts we hold that no disallowance of amount of employees’ provident fund can be made u/s.36(1)(va)
M/s. Shah Manufacturers and there was no fault on the part of the assessee as the delay was fully attributable to the technical glitches of EPFO site / portal and assessee has duly discharged the payment as required on very next date. Accordingly, appeal of the assessee is allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on 6th August, 2024.