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Facts
The assessee's appeal is against an order disallowing Rs. 49,03,711/- for belated payment of employees' contribution towards EPF/ESIC. This disallowance was made in intimation u/s 143(1) and assessment u/s 143(3), and upheld by the CIT(A)/NFAC.
Held
The tribunal held that compliance to Section 36(1)(va) should be as per the due date of the corresponding statute, not as per Section 139(1). They cited landmark decisions from the Supreme Court and Bombay High Court.
Key Issues
Whether belated payment of employees' contribution towards EPF/ESIC is allowable even if paid after the due date prescribed by the respective statute.
Sections Cited
143(3), 143(1), 36(1)(va), 139(1)
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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: Ms. MADHUMITA ROY & SHRI NAVEEN CHANDRA
The instant appeal, preferred by the assessee, is directed against the order dated 26.11.2024 [DIN & Order No. ITBA/NFAC/S/250/2024-25/1070636078(1) passed by the National Faceless Appeal Centre (NFAC), Delhi in proceedings Act”) for the Assessment Year 2018-19.
None appeared on behalf of the assessee at the time of hearing. We, thus, proceed to dispose of the appeal, ex parte, qua the assessee. We have heard the learned DR and perused the material available on record.
It emerges from the perusal of the assessment order as well as the CIT(A)/NFAC that both the lower authorities have disallowed Rs. 49,03,711/- representing belated payment of employees’ contribution towards EPF/ESIC in intimation u/s 143(1) as well as in assessment passed u/s 143(3) dated 23.11.2020, as upheld by the Learned CIT(A)’s in impugned order 26.11.2024.
After hearing the learned DR and going through the material available on record we find no merit in the assessee’s instant ground in light of the landmark decision of Hon’ble Supreme Court in Checkmate Services Pvt. Ltd. v. CIT [2022] 448 ITR 518/ [2022]143 taxmann.com 178 (SC), wherein their lordships have settled the law that the compliance to section 36(1)(va) ought to be as per the “due” date of the corresponding statute than that of u/s 139(1) of the Act. The Hon’ble Bombay High Court in Rohan Korgaonkar v. DCIT reported in [2024] 159 taxmann.com 321 has held that such disallowance could indeed be made even in Section 143(1) “processing” as well. We, thus reject assessee’s corresponding compute the assessee’s taxable income as per law after affording reasonable opportunity of being heard. purposes.
Order pronounced in open court on 09.09.2025.