TRUPTI ENTERPRISES PVT. LTD.,PATRAPADA, BHUBANESWAR vs. ITO, WARD-1 (2), BHUBANESWAR

Shri C.Parida, ld AR appeared for the assessee and Shri C.Parida, ld AR appeared for the assessee and Shri C.Parida, ld AR appeared for the assessee and Shri Charan Dass, Sr DR appeared for the revenue. DR appeared for the revenue.

The appeal is time barred by 90 The appeal is time barred by 90 days. The assessee has filed days. The assessee has filed condonation petitio condonation petition dated 11.8. 2022, stating that the appeal was delayed stating that the appeal was delayed because of the negligence of the consultant, who kept the appeal order and because of the negligence of the consultant, who kept the appeal order and because of the negligence of the consultant, who kept the appeal order and

Ld AR submitted that the issue involved in this appeal is delayed payment of PF and ESI of Rs.7,93,719/- in respect of employees contribution. It was the submission that the payment was made before the due date of filing of the return u/s.139(1) of the Act.

In reply, ld Sr DR submitted that the issue is now squarely covered by the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd vs CIT in Civil Appeal No.2833 of 2016 dated 12.10.2022, wherein, the Hon’ble Supreme Court has categorically held that if the employees contribution to PF and ESI has been paid beyond the time prescribed under the relevant PF Act, then same is not allowable under section 43B even after the payment has been made before the due date of filing of return under the Income tax Act. It was the submission that the amount of employees contribution to PF and ESI, which has not been paid within the due date as prescribed under the relevant Act, has been held by Hon’ble Supreme Court to be not allowable u/s.36(1)(va) of the Act. It was the submission that the Hon’ble Supreme Court in paras 52 & 53 has also categorically held that the provisions of section 43B would not apply to the employees’ contribution to PF and ESI. P a g e 2 | 4

We have considered the rival submissions. Admittedly, the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd(supra) has categorically held that the employees contribution to PF and ESI to the extent it is not paid within due date prescribed under the PF Act, is not allowable u/s.36(1)(va) of the Act. The Hon’ble Supreme Court has also admittedly held that the provisions of section 43B would not apply to the provisions of section 36(1)(va) of the Act in respect of employees contribution. Respectfully following the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd(supra), we are of the view that the delayed payment in respect of employees contribution to PF and ESI is not allowable.

In the case of Nirakar Security & Consultancy Services Pvt Ltd vs ITO in ITA No.98/CTK/2022 for Assessment Year 2016-17, order dated 17.10.2022, the Co-ordinate Bench of this Tribunal after considering the arguments of ld AR, has restored the issue to the file of the Assessing officer with the following directions: “6. Liberty is granted to the ld AR to make all submissions in respect of allowability of disallowed contribution of the employees to PF and ESI under other relevant provisions in the interest of justice. This direction is being given because ld AR has submitted that as the amount is not allowable under section 36(1)(va) of the Act and same is also not covered under section 43B of the Act, the amount of delayed contribution to PF and ESI in respect of employees contribution would be treated as income in the hands of the assessee u/.s.2(24)(x) and on subsequent payment of the same, it would be a business expenditure, which can be claimed u/s.37(1) of the Act. We are not expressing any opinion in regard to his arguments as it has

In the result, appeal of the assessee stands partly allowed for statistical purposes.