MUTHOOT FINANCE LTD.,KOCHI vs. THE ACIT,CENTRAL CIRCLE-1, KOCHI

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ITA 75/COCH/2022Status: DisposedITAT Cochin01 August 2022AY 2012-133 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 employees' contribution to PF and ESI, if not deposited within the due date under the respective Acts, is not allowable as a deduction under Section 36(1)(va) of the Income Tax Act. This decision followed the jurisdictional High Court's rulings.

What were the facts?

The assessee claimed deduction for employees' contribution to PF and ESI, which was deposited after the due date prescribed by the respective Acts but before the due date for filing the income tax return. The Assessing Officer disallowed this deduction.

What were the issues?

Whether delayed deposit of employees' contribution to PF and ESI, made before the due date of filing the return of income, is an allowable deduction under Section 36(1)(va).

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 139(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri Chandra Poojari, AM & Shri George George K, JM

Hearing: 04.08.2022Pronounced: 04.08.2022

Heard together (2 matters)

ITA No.75/Coch/2022
ITA No.76/Coch/2022

Read from the judgment's own cause title. This page is filed under one of them.

These appeals at the instance of the assessee are directed against common order of the CIT(A), dated 10.01.2022. The relevant assessment years are 2012-2013 and 2013-2014. Since identical issue is raised in these appeals, they were heard together and are being disposed of by this consolidated order.

2.

The solitary issue raised is whether the CIT(A) is justified in confirming the disallowance of employees’ contribution to PF and ESI u/s 36(1)(va) of the I.T.Act.

3.

The brief facts of the case are as follows:

2 & 76/Coch/2022. M/s.Muthoot Finance Limited. For the assessment years under consideration, the employees’ contribution to PF and ESI was disallowed u/s 36(1)(va) of the I.T.Act, for not making payments within the due date prescribed under the relevant Acts.

4.

Aggrieved, the assessee preferred appeals before the first appellate authority. The CIT(A) by following the judgment of the Hon’ble Kerala High Court in the case of CIT v. Merchem Limited reported in (2019) 378 ITR 443 (Ker.), dismissed the appeal of the assessee.

5.

Aggrieved, the assessee has filed the present appeal before the Tribunal. The learned AR relied on the submissions made before the Income Tax Authorities.

6.

The learned Departmental Representative submitted that the issue in question is squarely covered by the judgments of the Hon’ble jurisdictional High Court in the case of CIT v. Merchem Limited (supra) and in the case of Popular Vehicles & Services Private Limited v. CIT reported in (2018) 406 ITR 150

7.

We have heard the rival submissions and perused the material on record. The assessee is claiming deduction of delayed remittance of employees’ contribution to PF and ESI, stating that the same has been deposited before the due date of filing return u/s 139(1) of the I.T.Act. However, the Hon’ble jurisdictional High Court in the case of CIT v. Merchem Limited (supra) and in the case of Popular Vehicles & Services Private Limited v. CIT (supra) had clearly held that employees’ share of 3 & 76/Coch/2022. M/s.Muthoot Finance Limited. PF and ESI, which was not deposited within the due date under the respective Acts, is not an allowable deduction u/s 36(1)(va) of the I.T.Act. Therefore, following the judgments of the Hon’ble jurisdictional High Court in the case of CIT v. Merchem Limited (supra) and Popular Vehicles & Services Private Limited v. CIT (supra), we hold that since the employees’ contribution to PF and ESI was not deposited within the due date specified in the relevant Acts, the same cannot be allowed as a deduction u/s 36(1)(va) of the I.T.Act. It is ordered accordingly.

8.

In the result, the appeals filed by the assessee are dismissed.

Order pronounced on this 04th day of August, 2022.

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