R K & COMPANY MANPOWER P.LTD,NEW DELHI vs. DCIT, CIORCLE-19(1), NEW DELBHI
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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: SHRI SAKTIJIT DEY, VICE- & SHRI M. BALAGANESH
PER SAKTIJIT DEY, V.P.
Captioned appeals by the assessee arise out of three
separate orders dated 31.10.2022 passed by National Faceless
Appeals Centre (NFAC), pertaining to assessment years 2018-19,
2019-20 and 2020-21.
The only common issue arising in all these appeals relates to
disallowance of deduction claimed towards employees’
ITA Nos.3012, 3013 & 3014/Del/2022 AYs: 2018-19, 2019-20 & 2020-21
contribution to Provident Fund (PF) and Employees’ State
Insurance (ESI) paid beyond the due date prescribed under PF Act
and ESI Act.
We have considered the submissions of both the parties and
perused the materials on record. Undisputed facts are, in the
returns of income filed for the impugned assessment years, the
assessee has claimed deduction towards payment made of
employees’ contribution to PF and ESI. While processing the
returns of income filed by the assessee, the Centralized
Processing Centre (CPC), having found that the employees’
contribution to PF and ESI were not paid/remitted within the due
dates prescribed under the PE and ESI Act, disallowed such
deduction in terms with Explanation 1 to section 36(1)(va) read
with section 2(24)(x) of the Act.
Though, the assessee contested the aforesaid disallowances
by filing appeals before the first appellate authority, however, it
failed in its attempt, as, the first appellate authority relying upon
a decision of the Hon’ble Supreme Court in case of Checkmate
Services P. Ltd. Vs. CIT in Civil Appeal No.2833 of 2016 [TS-791-
SC-2022] upheld the disallowance.
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ITA Nos.3012, 3013 & 3014/Del/2022 AYs: 2018-19, 2019-20 & 2020-21
Before us, it is the specific contention of the assessee that
due date, as per section 36(1)(va) of the Act, should be the date on
which salary was actually disbursed to the employees and not the
date on which salary was due. In this context, learned counsel
has relied upon following judicial precedents:
i. Rakesh Janghu, ITA No. 2675/Del/2022, dated 09.10.2023
ii. Prime Comfort Products Pvt. Ltd. Vs. ACIT, ITA
No.530/Del/2023, dated 26.04.2023
No doubt, the issue whether the delayed payment of
employees’ contribution to PF and ESI is allowable as deduction is
no more res integra in view of the ratio laid down by the Hon’ble
Supreme Court in case of Checkmate Services P. Ltd. (supra).
However, it is the specific plea of the assessee before us that the
due date as provided under section 36(1)(va) of the Act should be
construed from the date on which salary was actually disbursed
to the employees and not the date on which salary was due. In
our view, the aforesaid contention of the assessee merits
consideration.
We have further observed, while considering similar
pleadings made by the assessee, the Coordinate Benches have
restored the issue to the Assessing Officer for consideration in the 3 | P a g e
ITA Nos.3012, 3013 & 3014/Del/2022 AYs: 2018-19, 2019-20 & 2020-21
light of judicial precedents. Following the judicial precedents cited
before us, we restore this issue to the file of the Assessing Officer
for de novo adjudication after providing due and reasonable
opportunity of being heard to the assessee and further, the
Assessing Officer must pass a well reasoned order after
considering the submissions of the assessee and the ratio laid
down in the decisions to be cited before him. Grounds are
allowed for statistical purposes.
In the result, appeals are allowed for statistical purposes.
Order pronounced in the open court on 29th November, 2023
Sd/- Sd/- (M. BALAGANESH) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE-PRESIDENT Dated: 29th November, 2023. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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