M/S BLACKCAT SERVICES,VASCO vs. ACIT, CIRCLE - 1(1), PANAJI

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ITA 13/PAN/2021Status: DisposedITAT Panaji04 July 2023AY 2019-20Bench: SHRI R.S. SYAL (Vice President), SHRI PARTHA SARATHI CHAUDHURY (Judicial Member)4 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the disallowance of the employees' share of ESIC and PF deposited beyond the due date under the respective Acts is justified. This is in line with the Supreme Court's decision in Checkmate Services P. Ltd. which clarified that such deposits must be made before the statutory due dates under the respective Acts for deduction.

What were the facts?

The assessee deposited the employees' share of ESIC and PF after the due date under the respective Acts but before the due date for filing the return of income. The AO disallowed this amount, which was upheld by the CIT(A).

What were the issues?

Whether the employees' share of ESIC and PF deposited after the statutory due dates under the respective Acts, but before the due date for filing the return of income, is allowable as a deduction.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 139(1)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Sandip Bhandare
For Respondent: Shri N. Shrikanth

आदेश / ORDER

PER R.S. SYAL, VP :

1.

These two appeals by the assessee are directed against the orders passed by the ld. CIT(A) in National Faceless Appeal Centre (NFAC), Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter called ‘the Act’) in relation to the assessment years 2018-19 & 2019-20. Both the appeals are based on similar facts and common grounds of appeal, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience.

2. The only issue raised in both the appeals is against the confirmation of disallowance of Employees Share of ESIC & PF deposited beyond the due date under the respective Acts but before the due date of filing return u/s.139(1) of the Act. In the intimations issued u/s.143(1), the AO made the above disallowances, which came to be affirmed in the first appeal. Aggrieved thereby, the assessee has approached the Tribunal.

3.

We have heard the rival submissions and gone through the relevant material on record. The issue of making disallowance u/s.36(1)(va) in respect of Employees share of ESIC and PF deposited beyond the due date under the respective Acts but before the time limit for filing the return u/s.139(1) is no more res integra in view of the judgment of Hon’ble Supreme Court in Checkmate Services P. Ltd. & Ors. VS. CIT & Ors. (2022) 448 ITR 518 (SC) holding that the deduction u/s.36(1)(va) can be allowed only if the employees’ share in the relevant funds is deposited by the employer before the due date stipulated in respective Acts and further that the due date u/s.139(1) of the Act is alien for this purpose. The ld. AR was fair enough to accept the legal position against the assessee by virtue of Checkmate Services P. Ltd. (supra). In view of the above enunciation of law by the highest court of the land, the view taken by the ld. CIT(A) deserves to be countenanced. We order accordingly.

4.

In the result, both the appeals are dismissed.

Order pronounced in the Open Court on 04th July, 2023.

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