SSNR PROJECTS PRIVATE LIMITED,VISAKHAPATNAM vs. DCIT/ACIT, CIRCLE-3(1), VISAKHAPATNAM

Brief facts of the case are that the assessee is a company, engaged in the business of civil contracts, e-filed the return of income for the A.Y.2013-14 on 30.09.2013, declaring the taxable income of Rs.5,96,80,680/-. The assessee’s case was selected for scrutiny under CASS and notice u/s 143(2) of the Act was issued. The Assessing Officer(AO) completed the assessment u/s 143(3) of the Act on 03.03.2016, determining the total income at Rs.1,05,60,410/-. In the instant case, the assessee has challenged the disallowance of Rs.7,10,590/- on account of late deposit of employees’ contribution towards PF.

Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :

On the facts and in the circumstances of the case the order of the learned Commissioner of Income Tax (Appeals) erroneous in law and facts of the case.

On the facts and in the circumstances of the case the learned Commissioner ought to have appreciated that amendments brought in Finance Act, 2021 in the provisions of section 36(1)(va) and 43B of the Income Tax Act, 1961 shall be applicable w.e.f. 01.04.2021. Thus, Explanation 2 and Explanation 5 in section 36(1)(va) and section 43B of the Income Tax Act, 1961, respectively shall be deemed to have prospective effect and shall not be applicable for A.Y.2013-14.

None appeared on behalf of the assessee. All the grounds of appeal are related to disallowance of deposits made by the assessee towards PF / ESI before the due date of filing the return of income u/s 139(1) of the Act. It is the case of the assessee that though the deposits could not be paid within the due dates specified under PF Act and ESI Act, the same were remitted before the due date of filing the return of income u/s 139(1) of the Act and allowable u/s 43B of the Act. The amendments brought in Finance Act, 2021 in the provisions of section 36(1)(va) and SSNR Projects Private Ltd., Visakhapatnam 43B of the Act shall be applicable w.e.f. 01.04.2021 but not applicable for the A.Y.2013-14 under consideration.

The Ld.DR relied on the order of the Ld.CIT(A) and pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal filed by the assessee.

We have heard the Ld.DR and perused the material available on record. Now the law is settled after a view had been taken by Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd., in Civil Appeal No.2833 of 2016, order dated 12.10.2022. In the case on hand also, the assessee made remittances before filing the return of income u/s 139(1), but not within the due date specified by the respective PF / ESI Acts. For the sake of clarity and convenience, relevant part of the order of the Checkmate Services Pvt. Ltd.(supra) is extracted as under : “They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income is treated as a deduction. Thus, it is an essential condition for deduction that such amounts are deposited on or before the due date.” Since the decision of the Hon’ble Supreme Court pronounced the correct legal position of the allowability of belated payment of PF and ESI under the provisions of the Act, we have no hesitation to come to a SSNR Projects Private Ltd., Visakhapatnam conclusion that the disallowance made by the AO as well as the Ld.CIT(A) needs no interference, in view of the decision of the Hon’ble Supreme Court mentioned supra.

In the result, appeal of the assessee is dismissed.