NUPAL REMEDIES PVT. LTD.,ERNAKULAM vs. THE ITO, ERNAKULAM

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ITA 18/COCH/2022Status: DisposedITAT Cochin30 June 2022AY 2019-203 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 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. The Assessing Officer disallowed this deduction.

What were the issues?

Whether delayed deposit of employees' contribution to PF and ESI beyond the due date under the respective Acts is an allowable deduction under Section 36(1)(va) of the Income Tax Act.

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

O R D E R

Per George George K, JM :

1.

This appeal at the instance of the assessee is directed against CIT(A)’s order dated 27.09.2021. The relevant assessment year is 2019-2020.

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 year 2019-2020, 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, amounting to Rs.4,22,190.

. M/s.Nupal Remedies Private Limited 4. Aggrieved, the assessee preferred appeal before the first appellate authority. The CIT(A) dismissed the appeal 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 appeal before the Tribunal. The Managing Director of the assessee, Sri.Padmanabhan Krishnakumar, 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 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 . M/s.Nupal Remedies Private Limited the I.T.Act. 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 appeal filed by the assessee is dismissed.

Order pronounced on this 30th day of June, 2022.

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