GAJANAND AGARWAL,HYDERABAD vs. ITO., WARD-11(1), HYDERABAD

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ITA 671/HYD/2024Status: DisposedITAT Hyderabad21 November 2024AY 2020-21Bench: Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia (Accountant Member)3 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that belated payments of employee's contribution towards PF and ESI, even if made before the due date of filing the return of income, are not allowable as a deduction. This is based on the Supreme Court's decision in the case of Checkmate Services (P) Ltd.

What were the facts?

The assessee paid employee's contribution towards PF and ESI after the statutory due dates but before the due date for filing the return of income. The CIT(A) confirmed the addition made by the CPC for these belated payments.

What were the issues?

Whether belated payment of employee's contribution to PF and ESI, made before the due date of filing the return of income, is allowable as a deduction.

Which sections of the Income-tax Act were involved?

Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad

Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia

Hearing: 19/11/2024

Per Vijay Pal Rao, Vice President

1.

This appeal by the assessee is directed against the order dated, 06/06/2024 of the learned CIT (A)/Addl/JCIT(A)-2 NFAC Guwahati, relating to A.Y.2020-21.

2.

The assessee has raised the following grounds:

“1. The order of the Appellate Commissioner is contrary to law, facts and circumstances of the case.

2. The Appellate Commissioner is erred in confirming the addition of Rs.4,87,268/- being PF/ESI dues paid before the due date of filing.

3.

Any other grounds which the assessee may urge either before or at the time of the hearing”.

3. The solitary issue arises in this appeal is whether in the facts and circumstances of the case, the learned CIT (A) is justified in confirming the addition/adjustments made by the CPC on account of belated payments of employee’s contribution towards PF and ESI.

4.

We have heard the learned AR and the learned DR and carefully perused the impugned order of the learned CIT (A). The learned AR has not disputed the fact that the payment of Rs.4,87,268/- has been made by the assessee after the due date as per the respective PF & ESI Acts. At the outset, we note that this issue is covered by the judgment of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT reported in 1423 Taxman.com 178 (S.C), wherein the Hon'ble Supreme Court has held that, if the Employees’ contribution to PF & ESI are not deposited before the statutory due dates mentioned in the respective Acts, the same cannot be allowed as a deduction. Since admittedly, the assessee, in the instant case, has not deposited the Employees’ Contribution to PF & ESI before the statutory due dates, but has deposited the same before the due date prescribed u/s 139(1) for filing of the return of income, therefore, we do not find any error or irregularity in the impugned order of the learned

Page 2 of 3 CIT (A). The grounds raised by the assessee are accordingly dismissed.

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