GANGANAGER VEHICLES PVT. LTD,DELHI vs. ITO, WARD-10(1), NEW DELHI

Since both the captioned appeals were heard together and pertain to same assessee, they are disposed of by this common order for the Page 1 of 7 were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules.

The sum and substance of the first grievance of the assessee in both the A.Ys under consideration is that the ld. CIT(A) erred in confirming the addition on account of delay in deposit of PF/ESIC beyond due date u/s 143(1).

The main argument of the ld. counsel for the assessee is that the processing has been made before the order of the Hon'ble Supreme Court in favour of the Revenue and against the assessee by the decision in the case of Checkmate Services [Pvt] Ltd 448 ITR 518. It was a highly debatable issue and, therefore, cannot be done u/s 143(1) by the CPC.

Per contra, the ld. DR relied upon the orders of Assessing Officer and the decision in the case of Checkmate Services [supra] rendered by the Hon'ble Supreme Court.

We have heard the rival submissions and have perused the relevant material on record. We find that this issue of disallowance of PF/ESIC is no more res integra as the quarrel is now settled by the decision of the Hon'ble Supreme Court in favour of the Revenue and against the assessee by the decision in the case of Checkmate Services [Pvt] Ltd

The Hon'ble Supreme Court has categorically held that the employees' contribution deposited after respective due date cannot be allowed as deduction, and, therefore, it would be incorrect to say that the decision of the Hon'ble Supreme Court is applicable only in the case of an assessment farmed u/s 143(3) of the Act. In our considered view, the ratio decidendi is equally applicable for the intimation framed u/s 143(1) of the Act.

The aforesaid decision distinguished the case of P.R. Packaging Service v. Asstt. CIT [2023] 148 taxmann.com 153 (Mum.-Trib.) where the Mumbai Tribunal deleted the disallowance u/s. 36(1)(va) of the Act made in the intimation u/s. 143(1) of the Act on a finding that such disallowance is beyond the scope of section 143(1)(a) of the Act, albeit the Tribunal noted that it is conscious of the fact that the issue on merits is decided against the assessee in Checkmate Services(supra). It was Page 3 of 7 context of section 143(3) of the Act and not section143(1) of the Act.

Similarly, the ld ITAT Pune Bench in the case of Surendra Devid Thokal Vs ITO (ITAT Pune) has confirmed the CPC adjustment of Employee contributions for PF/ESI delayed payments as not deductible following the Supreme Court in Checkmate Services. The Ahmedabad Tax Tribunal in the case of M/s. Checkmate Services Pvt. Ltd. (I.T.A.

The only other issue vide Ground No. 2 in both the A.Ys under consideration is the confirmation of addition/adjustment u/s 143(1) of the Act on account of depreciation which was outside the purview of adjustment u/s 143(1) of the Act and powers of DCIT(CPC).

At the very outset, the ld. counsel for the assessee submitted that the assessee itself has made adjustment in the computation of income by way of adjusting depreciation claimed which is at page 154 of the Paper Book.

Having heard the rival submissions and perusing the relevant material on record, we find that the CPC has made adjustment on account of depreciation (ICDS) claim made in the Audit Report as per clause 13(e) of the Tax Audit Report on account of ICDS. We find that the assessee has in its computation of Income statement suo-motto

In the result, appeals of assessee in and 991/DEL/2024 are partly allowed.