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Facts
The assessee filed an appeal against the CIT(A)'s order confirming the addition made on account of delayed payment of employee's contribution towards ESI/EPF. The assessee claimed that payments were made prior to the due date but were shown as delayed due to technical glitches.
Held
The Tribunal held that the disallowance on delayed payments of employee's contribution to ESI/EPF has attained finality, having been confirmed by the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Therefore, the order of the Ld. CIT(A) upholding the disallowance was upheld.
Key Issues
Whether the disallowance on account of delayed payment of employee's contribution towards ESI/EPF, despite alleged technical glitches, is justified in light of the Supreme Court's decision in Checkmate Services Pvt. Ltd.
Sections Cited
143(1), 36(1)(va)
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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
(ASSESSMENT YEAR 2018-19) M/s Tangerine Design Private CPC-ITR Limited, (On behalf of AO) Plot No.9, Sector-4, IMT Vs. NFAC, AO Range Code-46, Manesar, Gurgaon, C.R. Building, Haryana-122050. New Delhi-110002. PAN-AAECT6475H (Appellant) (Respondent) Assessee by None Department by Shri Shyam Manohar Singh, Sr. DR Date of Hearing 22/09/2025 Date of Pronouncement 22/09/2025 O R D E R
PER MANISH AGARWAL, AM:
This appeal is filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 24.04.2025 in Appeal No. CIT(A), Delhi-9/10044/2020-21 arising out of the order passed u/s 143(1) of the Income Tax Act, 1961 dated 17.10.2019 for Assessment Year 2018-19.
In the present appeal assessee has challenged the order of Ld. CIT(A), NFAC wherein the Ld. CIT(A) confirmed the addition made on account of delayed payment of employee’s contribution towards ESI/EPF.
On the other hand, the Sr. DR supports the order of the lower authorities.
Heard the Sr. DR and perused the materials available on record. IN the grounds of appeal
taken by the assessee it is stated that the payments of the same were mostly debited from bank account of assessee prior to the due date and delay in PF/ESI Account was on account of some technical glitches which cannot be attributed to assessee. However, from the facts submission as made before the Ld. CIT(A), reproduced at page 3 of the appellate order, assessee submitted as under:
7. The return was processed at a taxable Income of Rs 14,33,76,890 after making an addition of Rs 54,77,440 on account of EPF - employee's share late deposited by 1 or 2 days. This figure of EPF late deposited (Employee's share) was as per the Tax Audit Report filed. Copy of Tax Audit Report filed is annexed as Annexure B.
8. The assessee filed a rectification request to re process the return based on judicial pronouncements by the Jurisdiction High court as well as in the assessee's own case in an earlier year.
9. CPC reprocessed the return on 3rd June 2020 and the rectified Order was without any change as compared to the earlier Order. The assessee is in appeal before your Honor against the said Order of 3rd June
20. Copy of the Order is annexed as Annexure C.
10. A similar addition of R$ 6,92,849 u/s 36(1)(va) was done in the Assessment Order passed u/s 143(3) for assessment Year 2015-16. The CIT(A) in his order dated 29** June 2018 deleted the said addition relying on Delhi High court's decision in the case of AIMIL. Limited, and CIT vs SPL Industries of Delhi High court. Copy of the Order of CIT(A) for Assessment Year 2015-16 is enclosed as Annexure D. The provision of law (Section 36(1)(va)) as applicable to Assessment Year 2018-19 is the same as was for assessment year 2015-16.
6. As the evident from the submission of the assessee that the payments were delayed by one or two days however, before us, claim of the assessee was that payments were made prior to the due date and there was technical glitches, therefore, the payments were shown delayed. Further before Ld. CIT(A) assessee stated that Tangerine Design Pvt. Ltd. vs. ACIT based on the decision of the Hon’ble Jurisdictional High Court in the case of AIMIL Limited vs. CIT reported in [2010] 188 Taxmann 265, disallowance made in its own case in AY 2015-16 was deleted by ld. CIT(A) therefore, it was requested for the deletion of the disallowance made. It is further seen that the Ld. CIT(A) has dismissed the appeal and confirmed the disallowance by following the order of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. [2022] 143 taxmann.com 178 (SC). As this issue has attained finality where the disallowance on delayed payments of employees’ contribution to ESI/EPF stood confirmed by the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra) which order as observed above, is followed by Ld. CIT(A) to confirm the disallowance. Therefore, we find no infirmity in the order of Ld. CIT(A) which is hereby upheld. All the grounds of appeal taken by the assessee are dismissed.