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Facts
The assessee, RBK Education Solutions Private Limited, had made late deposits of employee contributions towards Provident Fund (PF) and Employees State Insurance Corporation (ESIC). The Income Tax Officer had disallowed these deductions. The assessee appealed this disallowance.
Held
The Tribunal recalled its earlier order and allowed the Miscellaneous Application filed by the Revenue. The Honourable Supreme Court's decision in Checkmate Services India (Pvt.) Ltd. vs. CIT was applied, stating that employee contributions must be deposited before the due date for deductibility under Section 36(1)(va) of the Income Tax Act.
Key Issues
Whether employee contributions to PF and ESIC deposited after the due date are eligible for deduction under Section 36(1)(va) of the Income Tax Act.
Sections Cited
36(1)(va)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “ E ”, MUMBAI
Before: SHRI B.R.BASKARAN & SHRI VIKAS AWASTHY
2 M.A NO.347/MUM/2023 & (A.Y.2018-19)] आदेश आदेश/ ORDER आदेश आदेश PER VIKAS AWASTHY, JM: This Miscellaneous Application has been filed by the Revenue u/s. 254(2) of the Income Tax Act, 1961 [in short ‘the Act’] seeking rectification of order dated 10/08/2022 in for assessment year 2018- 19.
Shri P.D. Chougule representing the Department submitted that the assessee in appeal had assailed the findings of CIT(A) in disallowing Employees contribution to Provident Fund(PF) and Employees State Insurance Corporation (ESIC) as the said contributions were made by the assessee after ‘due date’ as specified under the relevant Acts. The ld. Departmental Representative submitted that the Hon'ble Supreme Court of India in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT, 448 ITR 518 has held that Employees contribution towards PF after the due date as specified under the Provident Fund Act is not allowable as deduction. The Tribunal has allowed Employees share of contribution made after due date specified under the relevant Act.
Shri Anuj Kisnadwala appearing on behalf of the assessee strongly opposed Miscellaneous Application by the Revenue. He submitted that there is no mistake in the order of Tribunal as alleged by the Department. The Tribunal passed the order in accordance with law as was prevelant at that point of time.
We have heard the submissions made by both sides. The Hon'ble Supreme Court of India in the case of Checkmate India (Pvt.) Ltd. vs. CIT(supra) in an unequivocal manner explained that Employees contribution deposited
3 M.A NO.347/MUM/2023 & (A.Y.2018-19)] beyond ‘due date’ as specified under the relevant Acts would not be eligible for deduction u/s. 36(1)(va) of the Act. In light of the decision in the case of Checkmate India (Pvt.) Ltd. Vs. CIT (supra) we are of considered view that the , order dated 10/08/2022 in needs to be is recalled. The order dated 10/08/2022 is recalled and appeal of the assessee is restored to its original number.
In the result, Miscellaneous Application by the Revenue is allowed.
With the consent of both sides, the appeal of assessee was taken up for adjudication on merits.
The solitary issue raised in the appeal is disallowance of Rs.23,81,091/- on account of Employees share of contribution towards Provident Fund (PF) and disallowance of Rs.3,33,015/- towards Employees share of Employees State Insurance Corporation (ESIC). It is an admitted fact that assessee had deposited Employees share of contribution towards PF and ESIC after ‘due date’ as specified under the relevant Acts. The Hon’ble Apex Court in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT(supra) has explained the legal position that to be eligible to claim deduction u/s. 36(1)(va) of the Act, the Employer is under obligation to deposit Employees share of contribution towards PF & ESIC before the ‘due date’ under the respective Laws.
The ld. Counsel for the assessee submitted that the decision in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT (supra) was rendered in a case where the assessment was made u/s. 143(3) of the Act. In the case of assessee, the return of income was processed u/s. 143(1) of the Act, hence,
4 M.A NO.347/MUM/2023 & (A.Y.2018-19)] the said decision would not apply in the instant case. The aforesaid argument made on behalf of assessee is without any merit. The Hon’ble Jurisdictional High Court in the case of Rohan Korgaonkar vs. DCIT in Income Tax Appeal No.7 of 2023 decided on 07/02/2024 has clarified that whether the assessment is made u/s. 143(3) of the Act or the return of income is processed u/s. 143(1) of the Act makes no difference. The ratio laid down in the case of Checkmate Services India (Pvt.) Ltd. vs. CIT(supra) does not distinguish assessment made u/s. 143(3) or 143(1) of the Act. Thus, in light of facts of the case and the decision referred above, we find no infirmity in the impugned order, hence, appeal of assessee is dismissed.
In the result, appeal of assessee is dismissed.
Order pronounced in the open Court on Friday the 15th day of March, 2024.