KAMARHATTY COMPANY LTD. ,KOLKATA vs. DCIT,CIR-1(1), KOLKATA. , KOLKATA

This is the appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 05.07.2023 for the AY 2014-15.

The assessee has taken the following grounds:

At the outset, the Ld. Counsel for the assessee submitted that the details of employer and employees contribution towards PF & ESI appearing in the audit report contains apparent mistakes with regard to date of payment and also at some places employer contribution has been mentioned as employees contribution. He also stated that such mistakes are only in few months. Prayer made that issue may please be restored to the file of Ld. AO for examining it

On the other hand, the Ld. D.R vehemently argued supporting the order of lower authorities.

We have heard the rival contentions and perused the record placed before us. In the instant appeal of the assessee is against the disallowance of contribution towards PF & ESI amounting to Rs. 2,20,73,508/- on account of delay of payment beyond the prescribed under the relevant PF & ESI Act. We find that subsequent to the judgment of the Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. vs. CIT in [2022] 143 taxmann.com 178 (SC), the issue no more res-integra that if the employees contribution to PF & ESI is not deposited within the due dates prescribed u/s 36(1)(va) of the Act i.e. the due date under the relevant Welfare Legislation then such sum should be treated as income in the hands of employer u/s 2(24)(x) of the Act. Before us, the ld. Counsel for the assessee referring to the auditors certificate dated 5.9.2023 and 22.09.2023 as well as other document appearing in the Paper Book has claimed that there were certain mistakes in the Tax Audit report and more specifically in the details filed at serial no. 20(b) of the Form 3CD. Such mistakes are of two types: i) during some months date of payment as per the bank statement is prior to the payment date mentioned in the tax audit report. For instance for April,

Considering these facts, we find merit in the contention of the Ld. Counsel for the assessee and deem it fit to restore the issue of calculation of actual amount of disallowance u/s 36(1)(va) read with Section 2(24)(x) of the Act for delay in payment of employees contribution towards PF & ESI to the file of Ld. AO. We further direct the assessee to file all the relevant details including revised auditors certificate, bank statement, copy of PF & ESI challan and ledger account of employer and employees contribution before the AO so that the correct amount of disallowance u/s 36(1)(va) read with Section 2(24)(x) can be worked out. Needless to mention that appropriate opportunity of hearing should be provided to the assessee.