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Facts
The assessee's appeal was against the order confirming an addition of Rs. 31,89,899/- made for delayed payment of PF and ESIC. The impugned order emanated from an order passed by the CPC under section 143(1). The assessee had filed an appeal before the CIT(A) after a delay of 18 days, which was condoned.
Held
The Tribunal held that the employee's contribution of Rs. 14,57,217/- is confirmed for addition based on the Apex Court's decision in Checkmate Services Pvt Ltd. However, the employer's contribution of Rs. 17,32,682/- is remitted back to the Assessing Officer for verification of challans to allow deduction under section 43B of the Act.
Key Issues
Whether the employer's contribution to PF & ESIC, paid belatedly, is eligible for deduction under Section 43B of the Income Tax Act, 1961, and whether the employee's contribution is to be treated as income.
Sections Cited
36(1)(va), 43B, 139(1), 143(1), 250
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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI B.R. BASKARAN & SHRI ANIKESH BANERJEE
Instant appeal of the assessee is preferred against the order of theCommissioner of Income-tax, Appeal Addl/ JCIT(A)-9, Delhi, [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2018-19, date of order 31.10.2023.The impugned order was emanated from the order of the CPC, Bengalurupassed under section 143(1) of the Act, date of order17/05/2019.
Sahadev Devji Betkar 2. The assesseehas taken the following grounds of appeal:-
“1. The Ld. Additional/Joint Commissioner of Income Tax (Appeals), erred in confirming the actions of the Assessing Officer (Centralized Processing Center) in making an addition of Rs. 31,89,899/- under section 36(l)(va) of the Income Tax Act, 1961.
Without prejudice to the above, out of the total addition of Rs. 31,89,8997-, an amount of Rs. 17,32,6827- is attributable towards the employer’s contribution and the same should be allowed as a deduction under section 43B of the Income Tax Act, 1961.”
The appeal was filed before the bench with a delay of 18 days. The assessee filed affidavit with condonation of delay. The reason is explained. The ld. DR has not made any objection to the delay in filing of appeal. Accordingly, the delay for 18 days is condoned. The appeal is taken for adjudication.
Brief facts of the case is that the assesseefiled the return under section 139(1) of the Act which was processed under section 143(1) of the Act. The addition was made for delayed payment of the PF / ESIC amount to Rs.31,89,899/-. Aggrieved, assessee filed an appeal before the CIT(A). The Ld.CIT(A) passed an order and confirmed the addition. Being aggrieved, the assessee filed an appeal before us. 5. The Ld.AR appeared and submitted a written submission which is kept in the record. Ld.AR first invited our attention toABP page 1. The relevant chart is reproduced as below: -
Sahadev Devji Betkar “Statement showing payment of PF Contribution of the Employees &Employer: - Due date Actual Employee’s Employer’s Amount of Date of contribution contribution challan paid Payment EPF 15-06-17 16-06-17 4,28,870 4,70,355 8,99,225 EPF 15-08-17 21-08-17 4,99,573 5,47,867 10,,47,440 EPF 15-10-17 17-10-17 4,45,158 4,88,192 9,33,350 ESIC 31-08-17 29-08-17 83,616 2,26,268 3,09,884 “ The Ld.AR in argument placed that addition was made for delayed payment of PF & ESIC for total amount to Rs.31,89,899/-. Out of that the employees’ contribution is Rs.14,57,217/- which is admitted by the ld. AR for addition. But the employer’s contribution amount to Rs.17,32,682/- is subject to a claim of deduction under section 43B of the Act. But the issue was not properly considered by the Ld.CIT(A). Copy of the challans are duly attached from APB pages 2-9 and the written submission filed before the JCIT(A)-9 on dated 26/09/2023 alongwith acknowledgement which are enclosed in APB pages 10-21.
The Ld.DR fully relied on the order of the Revenue Authorities and argued accordingly.
We heard the rival submission and considered the documents available in the record. The Revenue has added back the total delayed payment of PF & ESIC but the employer’s contribution amount to Rs.17,32,682/- is allowable for deduction U/s 43B which is indeed point of addition. But the employees’ contribution of Rs.14,57,217/- is confirmed for addition considering the order of the hon’ble Apex Court in the case of Checkmate Services Pvt Ltd vs CIT 143 taxmann.com 178 (SC). The ld. ARhas enclosed the challansas proof of payment Sahadev Devji Betkar of PF& ESIC related to employer’s contribution and placed before the Bench. But the verification of challans is incomplete before the revenue authority related to the employer’s contribution. So, we remit back the matter back to the file of the Ld.AO for verification of challan and allow the deduction of employer’s contribution under section 43B of the Act. Accordingly, the order is passed in the terms indicated above.
In the result, the appeal of the assesse in is partly allowed.