DCIT, CIRCLE-1(1)(1), SUBHASH ROAD vs. UJVN LIMITED, GMS ROAD

(ASSESSMENT YEAR: 2024-25) UJVN Limited, DCIT, Ujjawal GMS Road, Circle-1(2)(1), Dehradun-248001. Vs. Subhash Road, Dehradun. Uttarakhand. PAN: AAACU6672R (Appellant) (Respondent) Assessee by Dr. Rakesh Gupta, Adv. & Sh. Somil Agarwal, Adv. Department by Shri A.S. Rana, Sr. DR Date of Hearing 11/09/2025 Date of Pronouncement 27 /11/2025 O R D E R PER MANISH AGARWAL, AM: Both the appeals filed by the Revenue as well as assessee against the order of Learned Commissioner of Income Tax (Appeals)-2, Visakhapatnam, (‘the CIT(A) in short) passed u/s 250 of the Income Tax Act, 1961, dated 28.05.2025 for Assessment Years 2017-18 and 2024-25.

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9. Against the said order, the assessee is in appeal before the Tribunal wherein following grounds of appeal are taken.

1. That having regard to the foots and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO/CPC in assuming jurisdiction u/s 143(1) which is bad-in-law on various legal and factual grounds.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and no facts in confirming the action of Ld. AO/CPC in making an adjustment/addition of Rs.1,90,94,116/- on account of employees' contribution to PF and ES1 u/s 36(1)(va) and that too in the proceedings u/s 143(1) of the Act and that too when the employees' contribution to PF and ESI was paid by the assessee within 15 days' from the end of the month in which salary has been disbursed.

3. In any case and in view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO/CPC in making addition of Rs. 1,90,94,116/- on account of employees' contribution to PF and ESI u/s 36(1)(va), is bad in law and against the facts and circumstances of the case and the same is outside the purview of section 143(1) of the Act.

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO has in passing the impugned order u/s 143(1) and that too without providing a reasonable opportunity of being heard in accordance with law to the assessee.

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5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal

at the time of hearing and all the above grounds are without prejudice to each other.”

10. Heard both the parties and perused the materials available on record. The assessee has fairly admitted that the issue of delayed deposit of employees contribution of PF and ESI is decided against it in terms of the Hon’ble Supreme Court in the case of Checkmate Service Pvt. Ltd. (supra). However, it is argued by the ld. AR for the assessee that due date has to be reckoned from the actual date of payment of salary as has been held by the Co-ordinate Delhi Bench of Tribunal in the case of M/s M.S. Vigilant Security Placement & Detective Services (P) Ltd. in ITA No.696/Del/2024. Though the delayed payment of employees contribution of PF & ESI is not allowable as expenses as per section 36(1)(va) of the Act however, we find force in the argument of the assessee for the purpose of due date under the respective Act, actual date of payment of salary should be taken into consideration. The Co-ordinate Bench in the case of M.S. Vigilant Security Placement & Detective Service (P) Ltd. (supra) has also expressed the view that due date should be reckoned from the date of actual payment of salary wherein the it has followed the judgement of the Kolkata Bench of the Tribunal in the case of Kanoi Papers & Industries Ltd. vs. ACIT reported in (2002) 075 TTJ 0448. The relevant observations of the Co-ordinate Bench in the case of M.S. Vigilant Security Placement & Detective Services (P) Ltd. (supra) are as under:

5. Learned Counsel submits that the above “due” date has to be reckoned from the date of actual payment of salary in light of Kanoi Paper & Industries Ltd. vs. ACIT (2002) 75 TTJ 0448 (Cal.) as under: "Clause 38 of the Employees' Provident Fund Scheme, 1952, fixes the time-limit for making payment in respect of contribution to the provident fund to be 15 days from the close of the month concerned. However, the issue here is whether the "month" should be considered to be the month to which the wages relates or the month in which the actual disbursement of the wages is made, we are of the considered opinion that the expression "month" should mean here the month during which the wages/salary is actually disbursed irrespective of month to which the same relates. Thus, the scheme of the Government in this regard is that once a deduction is 5 IT No.126 & 127/DDN/2025 made f respect of the employees' contribution to the provident fund from the salary/wages of the employee or the employer also makes his contribution, factually at the time of disbursement of the salary the payment in respect of such contribution should be made forthwith. If for some reason or other the payment of salary for a particular month be held up for considerable period of time it cannot be said that the employer would be liable to make payments in respect of the "employer's" as well as "employees" contribution in respect of wages for such period within a period of 15 days from the close of the month to which the wages relate. On the other hand, in our view, most appropriate interpretation would be that the employer would be at liberty to make payment of the contribution concerned within 15 days (subject however to the further grace period) from the end of the month during which the disbursement of the salary is actually made and the contribution of the provident fund are, thus, generated, inasmuch as, the provision relating to the disallowance of such contribution on account of delay is rather an artificial provision, In our view, a liberal approach has got to be made to this issue. Ultimately, therefore, we reverse the order of the lower authorities and direct the AO to examine whether the payments of contribution in the present case were made within 15 days (allowed with further grace period of 5 days) from the close of the respective months during which the disbursement of the salary/wages were actually made. The AO should recompute the amount disallowable, if any, on the above basis and take appropriate action accordingly."

6. The assessee's instant first substantive ground is partly accepted for statistical purposes to this limited extent, in very terms.

7. Next substantive issue between the parties is that of credit of prepaid taxes as claimed at the assessee's behest. Both the learned representatives are very fair that the same requires Assessing Officer's factual verification and computation than our second appellate adjudication. We accordingly restore the assessee's instant second substantive ground back to the Assessing Officer in very terms.

8. Learned counsel lastly contends that the assessee's section 154 rectification claiming the benefit of section 115BAA already stand accepted by the departmental authorities. We accordingly reject the assessee's instant last substantive ground as rendered infructuous.

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Order pronounced in the open Court on 27.11.2025.