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Facts
The assessee filed two separate appeals for Assessment Years 2017-18 and 2018-19 challenging orders of the CIT(A). The common grievance in both appeals pertains to the disallowance of employees' contribution to PF/ESIC.
Held
The Tribunal noted that the disallowance was based on the Supreme Court's decision in Checkmate Services. However, the assessee argued that the due date was a public holiday, and technical issues prevented timely electronic payment. The Tribunal decided to restore the issue to the AO for verification of these claims.
Key Issues
Whether the disallowance of employees' contribution to PF/ESIC is justified when the due date was a public holiday and technical issues prevented timely payment.
Sections Cited
36(1)(va)
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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI SANDEEP SINGH KARHAIL, HON’BLE
PER NARENDRA KUMAR BILLAIYA, AM: I.T.A. No. 2421 &2422/Mum/2024 are two separate appeals by the assessee preferred against two separate orders of the ld. CIT()A, Addl/JCIT(A)-3, Ahmedabad, dt. 13/03/2024, pertaining to Assessment Years 2017-18 and 2018-19. 2. Since common grievance is involved in both these appeals, they were heard together and are disposed off by way of this common order for the sake of convenience and brevity.
The common grievance relates to the disallowance of employees’ contribution to PF/ESIC u/s 36(1)(va) of the Act.
The disallowance is based upon the decision of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. v. CIT [2022] 143 taxmann.com 178. I.T.A. No. 2421 &2422/Mum/2024 2
Before us, the ld. Counsel for the assessee contended that because the due date was a public holiday, as per the General Clauses Act, the nest working day becomes the due date and, therefore, any payment made as per the General Clauses Act, is eligible for the claim of deduction. The ld. Counsel further pointed out that the portal/website of the PF/ESIC was having technical issues and because of which the payments could not be made electronically. In support, affidavit of Shri Sanjeev Laxmichand Maru, Consultant, has already been filed.
We have given a thoughtful consideration to the order of the authorities below. We are of the considered view that the impugned quarrel has been now well settled by the decision of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. (supra). However, at the same time if the assessee was in a position as mentioned hereinabove then, it becomes a case of impossibility of performance.
However, it becomes imperative to verify whether the due date was a public holiday thereby attracting the relevant provisions of the General Clauses Act and was there any technical glitch in the portal. Therefore, for verification, we restore this issue to the file of the AO. The AO is directed to verify the contents of the affidavit of Shri Sanjeev Laxmichand Maru, Consultant, and decide the issue afresh as per the relevant provisions of law and after affording the reasonable and adequate opportunity of being heard to the assessee.
I.T.A. No. 2421 &2422/Mum/2024 3
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 15th July, 2024 at Mumbai. (SANDEEP SINGH KARHAIL) ACCOUNTANT MEMBER Mumbai, Dated 15/07/2024 *SC SrPs *SC SrPs *SC SrPs *SC SrPs
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : अपीलाथ" / The Appellant
""थ" / The Respondent 2. संबंिधत आयकर आयु" / Concerned Pr. CIT 3. आयकर आयु" अपील
( ) / The CIT(A)- िवभागीय "ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 5. गाड" फाई/ Guard file. 6. आदेशानुसार/ BY ORDER,