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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri George Mathan, JM & Shri M.Balaganesh, AM
These two appeals filed by the assessee against the orders of the National Faceless Appeal Centre (NFAC), Delhi’s order both dated 03-08-2021 passed in DIN & Order No.ITBA/NFAC/S/250/2021-22/1034604177(1) & 1034604309(1) for the AYs.2018-19 and 2019-20.
Sri Aravind Sreekumar, Advocate appeared on behalf of the assessee and Ms.Jamunna Devi, Sr.DR appeared on behalf of Revenue.
The assessee has sought for adjournment and the same has been denied as the issue in this appeal is very small and can be decided. In the assessee’s appeal, the assessee challenged the action of the Ld.CIT(A) in confirming the disallowance of the belated
:- 2 -: & 166/Coch/2021 payment of PF and ESI representing the employees’ contribution in the intimation u/s. 143(1) of the Income Tax Act. It has been raised in the grounds of appeal that the PF and the ESI has been paid before the due date of filing the return of income though the remittance has been made beyond the due date, as prescribed under the respective statutes being PF and ESI statutes.
The Ld.DR submitted that the contribution to PF and ESI in respect of employees’ contribution is statutorily to be made within the time prescribed under the respective acts and the non-payment of the same would lead to a disallowance under the Income Tax Act u/s.43B of the Act. It was the submission that the Ld.CIT(A) has in page nos.12 to 20 of his order considered the issue in detail and has held that as the employees’ contribution to PF and ESI has not been done within the due date prescribed under the relevant statutes, the disallowance has been rightly made.
We have considered the rival submissions. Admittedly, the issue of disallowance on account of the employees’ contribution to PF and ESI paid beyond the due date as prescribed under the relevant statutes but paid within the due date of filing of the income tax return has been a subject matter of substantial litigation. Various Hon'ble High Courts have held the issue in favour of the assessee as also various against. In fact in respect of the issue, the Hon'ble Kerala High Court in the case of CIT Vs. M/s.Merchem Ltd. (2015) [378 ITR 443] has held the issue against the assessee but in earlier decision in the case of Kerala State Warehousing Corporation in the year 2009 has held the issue in favour of the assessee. However, in the subsequent decision, the earlier decision has also not been considered and not discussed. In these circumstance, in respect of the Hon'ble Kerala High Court itself, there are two decisions. Clearly this being a debatable issue, the same cannot be :- 3 -: & 166/Coch/2021 disallowed in an intimation u/s.143(1)(a) of the Act and the confirmation of the same by the Ld.CIT(A) stands reversed.
In the result, both the appeals of assessee are allowed.
Dictated and pronounced in the open court on 14th March, 2022