NEWGEN INDUSTRIAL SECURITY (GUJARAT) PVT. LTD.,VADODARA vs. ACIT, CIRCLE- 2(1)(2), VADODARA

The solitary issue involved in these appeals are disallowance made u/s.36(1)(va)of the Act on late payment of Employee’s PF & ESI funds. ITA No.394/Ahd/2022 for the Asst. Year 2019-20 is taken as the lead case .

The brief facts of the case is that the assessee is a Private Limited Company engaged in the business of providing Man Power Security Services. For the Asst. Year 2019-20, the assessee filed its Return of Income on 19.10.2019 declaring total income of Rs.74,92,808/-. The asessee in its Audit Report claimed that Rs.54,15,201/- was paid belatedly on Employees ESI & PF as against the total payment of Rs.1,19,96,811/-. However, the Central Processing Centre, Bangalore while processing the above Return of Income treated the entire payment of ESI & PF as belated payments and added the entire Rs.1,19,96,811/- as the income of the assessee u/s.36(1)(va) of the Act.

Aggrieved against the addition, the assessee filed an appeal before the NFAC. The Ld.NFAC, had given six hearing opportunities between 10.11.2021 to 14.17.2022 to the assesee. However, for various technical reasons the assessee could not response to the hearing notices, resulting in confirming the addition made by the CPC on late payment of ESI & PF funds.

Aggrieved against the appellate orders the assessee are in appeal before us.

The Ld.Counsel Ms. Kinjal Shah, appearing for the assessee submitted before us details of payment made by the assessee on account of PF and other welfare fund made by the assessee well within the statutory time limit as well as belated payment. As per the Ld.Counsel the assessee made belated payment of Rs.64,04,249/- wherein the CPC has treated entire payment of Rs.1,19,79,966/- as belated payment and added as the income of the assessee u/s.36(1)(va) of the Act. The Ld.Counsel submitted entry-wise break-up amount with statutory due dates and actual date of payments. Thus, the Ld.Counsel pleased to delete the entire addition made by the CPC.

Per Contra, Ld.Sr-DR Shri Purushottam Kumar, appearing for the Revenue supported the order passed by the lower authorities and the assessee failed to response to the notices issued u/s.143(1)(a) of the Act by the CPC, as well as six opportunities given by the Ld-NFAC. However, the assessee for the first time providing details before this Tribunal, which can be set-aside back to the file of Jurisdictional Assessing Officer for verification of the same and allow if it is in-accordance with Law.

We have given our thoughtful consideration and perused the materials available on record including the break-ups of the ESI & PF payments made date-wise by the assessee. The assesee itself admitted that late payment of PF and ESI were to the extent of Rs.64,04,249/- as against the payment of Rs.1,19,79,966/-. Thus, the lower authorities are not correct in holding the entire payment as belated payment and making addition u/s.36(1)(va) of the Act.

The other grounds raised by the assesee are charging interest u/s.234(A), 234(B) & 234(C) of the Act, which are consequential in nature and does not required any separate adjudication. Thus, the ground no. 2 raised by the assessee is hereby dismissed.

The solitary issue raised by the assessee is disallowance of Rs.45,03,135/- made u/s.36(1)(va) of the Act on late payment of Employee’s PF & ESI funds by the assessee.

The assesee could not place on record any discrepancy made in the intimation made u/s.143(1) of the Act as well as the appellate order passed by Ld.CIT(A). In the absence of any fresh material before us, we do not find any merit in the grounds raised by the assessee. Thus, the appeal filed by the assessee is devoid of merit and same is hereby dismissed.