PADMANABHAN KRISHNAKUMAR,ERNAKULAM vs. THE ITO, KOCHI

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ITA 16/COCH/2022Status: DisposedITAT Cochin30 June 2022AY 2018-193 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 the employees' contribution to PF and ESI, if not deposited within the due date under the respective Acts, is not an allowable deduction under Section 36(1)(va) of the Income Tax Act. This decision followed the jurisdictional High Court's ruling.

What were the facts?

The assessee claimed deduction for employees' contribution to PF and ESI, which was deposited after the due date prescribed under the respective Acts but before the due date for filing the return of income. 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.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: Shri George George K, JM & Shri Laxmi Prasad Sahu, AM

Hearing: 29.06.2022Pronounced: 30.06.2022

Heard together (2 matters)

ITA No.16/Coch/2022
ITA No.17/Coch/2022

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

O R D E R Per George George K, JM : These appeals at the instance of the assessee are directed against two separate orders of the CIT(A), both dated 22.11.2021. The relevant assessment years are 2018-2019 and 2019-2020. Common issue is raised in these appeals, hence, 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: For the assessment years 2018-2019 and 2019-2020, the employees’ contribution to PF and ESI was disallowed u/s -17/Coch/2022. Sri.Padmanabhan Krishnakumar. 36(1)(va) of the I.T.Act for not making payments within the due date prescribed under the relevant Acts (for assessment year 2018-2019 disallowance of Rs.5,09,090 and for assessment year 2019-2020 disallowance of Rs.4,77,420).

4.

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

5.

Aggrieved, the assessee has filed the present appeals before the Tribunal. The assessee has filed an adjournment application stating that he is indispose, however, the learned AR representing the assessee Sri.Anil K Nayar was present. Therefore, the adjournment application was rejected and the matter was heard on merits. The learned AR relied on the ground raised.

6.

The learned Departmental Representative submitted that the issue in question is squarely covered by the judgment of the Hon’ble jurisdictional High Court in the case of CIT v. Merchem Limited (supra).

7.

We have heard 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 -17/Coch/2022. Sri.Padmanabhan Krishnakumar. jurisdictional High Court in the case of CIT v. Merchem Limited (supra) had clearly held that employees’ share of 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. The relevant finding of the Hon’ble High Court has been elaborately extracted at pages 8 and 9 of the impugned order of the CIT(A), hence, the same is not reproduced below. Therefore, following the judgment of the Hon’ble jurisdictional High Court in the case of CIT v. Merchem Limited (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 30th day of June, 2022.

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