ABHIPRA CAPITAL LIMITED,NEW DELHI vs. DCIT, CIRCLE-1(1), DELHI
In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that belated employee's contribution to PF & ESI is taxable income. The deduction under Section 36(i)(va) is not permissible for belated payments, and such disallowance is permissible even under Section 143(1).
What were the facts?
The assessee made payments of employee's contribution to PF & ESI after the due date but before filing the return of income. The Assessing Officer made an addition of Rs. 15,64,620/- on this account.
What were the issues?
Whether belated payment of employee's contribution to PF & ESI is deductible? Whether such disallowance is permissible under Section 143(1) proceedings?
Which sections of the Income-tax Act were involved?
Section 36(i)(va),Section 43B,Section 2(24)(x),Section 143(1)
AI-generated summary — verify with the full judgment below
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- Checkmate Services Pvt. Ltd. v. CIT1,392 citing143 Taxmann.com 178 · 2022 · SC · Read judgment
Income Tax Appellate Tribunal, DELHI BENCH: A: NEW DELHI
Before: SHRI G.S PANNU, HON’BLE & SHRI CHANDRA MOHAN GARG
ORDER PER CHANDRA MOHAN GARG, J.M. This appeal has been filed against the order ld. NFAC/CIT(A), New Delhi dated 23.02.2023 for A.Y. 2020-21. 2. The grounds raised
by the assessee are as follows:-
1. Ld. CIT (Appeal) is not justified in law and facts and circumstances of the case in confirming order of Assessing Officer without appreciating the facts of the case.
2. Ld. Assessing Officer is not justified in law and facts and circumstances of the case in making addition of Rs. 15,64,620/- on account of making payment of PF & ESI before filing return of income as prescribed in law.
3. Ld. Assessing Officer is not justified in law and facts and circumstances of the case in making disallowance of payment of ESI & PF before filing Return and duly been covered u/s 43B as decided by Hon'ble CIT.
4. Ld. Assessing Officer is not justified in law and facts and circumstances of the case in making disallowance based on amendment in the Finance Act, 2021 which amendment is in force in prospective and not in retrospective.
Ld. Assessing Officer is not justified in law and facts and circumstances of the case in not considering the cases decided in favour of assessee after amendment in Finance Act, 2021. One of the case is Hon'ble ITAT Hyderabad Bench in dated 1st July, 2021.
Ld Assessing Officer is not justified in law and facts and circumstances of the case in not considering the cases decided in favour of assessee in case of M/s. Krishna Kanha Shelters Pvt. Ltd Vs. ACIT Circle 2(1)(2) (ITA No.53/Agr/2021 same issue was before ITAT Agra Bench and Hon'ble ITAT Bench Agra vide order dated 21st March, 2022 decided the case in favour of appellant. 7. Ld Assessing Officer is not justified in law and facts and circumstances of the case in not considering the cases decided in favour of assessee by Hon'ble ITAT Delhi Bench "G" in ITA Nol 1392/Del2021 Raj Kumar, 189 Sector 9A, Gurgaon Haryana PAN ANSK35554E vs. ITO CPC, Bengaluru, Karnataka.
As per grounds of appeal
, the assessee has challenged the disallowance of employees contribution to Provident Fund/ESIC u/s 36(i)(va) r.w.s. 43B of the Act. The ld. counsel submitted that Ld. Assessing Officer is not justified in law and facts and circumstances of the case in making addition of Rs. 15,64,620/- on account of making payment of employees contribution in PF & ESI before filing return of income as prescribed in law.
4. Ld. Sr.DR for the Revenue on its part, contended that Central Processing Centre ("CPC") has made additions of Rs. 15,64,620/- to the returned income of the assessee on account of late deposit of employees contribution to Provident Fund/ESIC while processing the return of income. In this regard, the action of the Revenue in making disallowance towards late deposit of employees' contribution to Provident Fund/ESIC was supported by the judgement rendered in the case of Checkmate Services (P.) Ltd. vs CIT (2022) 143 taxmann.com 178 (SC). Ld. Sr. DR for the Revenue thus submitted that even for Assessment Years prior to Assessment Year 2021-22, belated employees' contribution are to be reckoned as taxable income of the assessee u/s 2(24)(x) of the Act and the deduction u/s 36(i)(va) of the Act would not be permissible thereon in case of belated payments. Ld. Sr.DR for the Revenue further contended that the delayed deposit of employees' contribution indicated in the Audit Report is sufficient for adjustment under section 143(1) of the Act, as held by the Pune Bench of the Tribunal Cemetile Industries vs ITO TS-933-ITAT-2022 (Pune).
5. The issue towards taxability of belated employees' contribution to Provident Fund/ESIC is no longer res integra in the light of the judgement of the Hon'ble Supreme Court in the case of Checkmate Services (P.) Ltd. vs CIT (supra). The coordinate Bench of the Tribunal in Cemetile Industries vs ITO (supra) had expressed a view that such adjustment/disallowance is also permissible in the proceedings carried out u/s 143(1) of the Act. Very recently, the Co-ordinate Bench of the Tribunal in Savleen Kaur & Others vs ITO in & Others for Assessment Year 2018-19 & Others vide order dated 09.01.2023 has also taken a similar view and upheld the action of the Revenue. In parity with the view taken by Co-ordinate Benches, we do not see any merit in the appeal of the assessee. We thus, do not see any warrant to any reason to interfere with the order of Ld. CIT(A).
In the result, appeal of assessee is dismissed. Order pronounced in the open court on 19.10.2023.
More judgments on Section 36(i)(va)
- Umang Boards Limited, Jaipur vs DCIT, Circle-1 Jaipur, JaipurITA 969/JPR/2025[2018-2019]Status: Disposed18 Sept 2025AY 2018-2019
- Welfare Buildings & Estates Pvt. Ltd… vs DCIT, CPC, BengaluruITA 252/KOL/2025[2021-22]Status: Disposed24 Jul 2025AY 2021-22
- The Mahil Gailan Cooperative Agriculture… vs Deputy Commissioner of Income Tax Circle-1…ITA 106/ASR/2024[2021-22]Status: Disposed7 Jul 2025AY 2021-22
- Nashik District Supervision Co Op Society… vs ITO Ward 1(1) Nashik, NashikITA 2250/PUN/2024[2018-19]Status: Disposed7 Apr 2025AY 2018-19
- Deputy Commissioner of Income Tax… vs Ms Gondwana Engineers Limited, NagpurITA 387/NAG/2024[2015-16]Status: Disposed21 Mar 2025AY 2015-16
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