OMAXE WORLD STREET PRIVATE LIMITED,FARIDABAD vs. ACIT,CIRCLE-2(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 the Income Tax Act differentiates between employee and employer contributions. For employee contributions, Section 36(1)(va) applies, and belated deposits are not deductible, following the Supreme Court's decision in Checkmate Services Pvt. Ltd.
What were the facts?
The assessee appealed against an order disallowing expenditure towards employees' contribution to ESIC/PF due to late deposit. The Assessing Officer made an addition of Rs. 1,65,347/- for the assessment year 2017-18.
What were the issues?
The key issue was whether the belated deposit of employees' contribution to PF/ESIC by the employer was deductible as an expenditure. This involved interpreting the applicability of Section 36(1)(va) versus Section 43B for such contributions.
Which sections of the Income-tax Act were involved?
Section 36(1)(va),Section 43B,Section 2(24)(X),Section 143(3)
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 “E” DELHI
Before: SHRI SAKTIJIT DEY & SHRI PRADIP KUMAR KEDIA
PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi [‘CIT(A)’ in short] dated 07.07.2022 arising from the assessment order dated 18.12.2019 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2017-18.
The captioned appeal relates to Assessment Years 2017-18 involving issue of disallowance of expenditure towards employees contribution to ESIC/PF under Section 36(1)(va) of the Act.
When the matter was called for hearing, none appeared for the assessee. Under the circumstances, we proceed ex-parte in the absence of the assessee.
Ld. Sr.DR for the Revenue, on its part, contended that Assessing Officer has rightly made addition of Rs.1,65,347/- to the returned income of the assessee on account of late deposits of employees’ contribution to PF/ESIC while processing the return of income under Section 143(3) of the Act. The appeal of the assessee has been rightly rejected and confirmed by the CIT(A) in the light of the judgment rendered in the case of Checkmate Services Pvt. Ltd. vs. CIT (2022) 143 taxmann.com 178 (SC). The ld. Sr.DR for the Revenue submitted that even for the Assessment Year 2017-18 in question, belated deposit of employees’ contribution held in trust by the employer assessee are to be reckoned as taxable income under Section 2(24)(X) r.w. Section 43B and deduction under Section 36(1)(va) of the Act would not be permissible.
The issue towards taxability of belated employees’ contribution to PF/ESIC is no longer res integra in the light of the judgment of Hon’ble Supreme Court in the case of Checkmate Services (supra). The Hon’ble Supreme Court in this case observed that Income Tax Act differentiates between the employees’ contribution and employer contribution to the PF/ESIC Act. While in respect of employer’s contribution, Section 43B is applicable but however with respect of employees’ contribution, the conditions specified in Section 36(1)(va) is applicable and Section 43B(b) does not cover employees’ contribution deducted by employer from salary of the employees. In parity with the view taken by Co-ordinate Benches on the issue, on first principles, we do not see any merit in the case of the assessee for impermissibility of such disallowances under Section 143(3) of the Act. The assessee has not brought any material contrary to facts noted by the revenue authorities.
In the result, the appeal of the assessee is dismissed. Order was pronounced in the open Court on 23/08/2023
More judgments on Section 36(1)(va)
- Vco Consulatatns and Sevices Private… vs ITO, Corporate Ward 3(3), ChennaiITA 2145/CHNY/2025[2019-20]Status: Disposed16 Oct 2026AY 2019-20
- R K Swamy Limited, Chennai vs DCIT Non Corporate Circle 10(1), ChennaiITA 504/CHNY/2026[2018-19]Status: Disposed14 Oct 2026AY 2018-19
- M/S. R.K. Swamy Ltd., Chennai vs DCIT, Ncc-10(1), ChennaiITA 2822/CHNY/2025[2020-21]Status: Disposed14 Oct 2026AY 2020-21
- Rajesh Maru, Mhow vs ITO-5(1), IndoreITA 839/IND/2025[2023-2024]Status: Disposed12 Oct 2026AY 2023-2024
- Rajesh Maru, Mhow vs ITO-5(1), IndoreITA 838/IND/2025[2022-2023]Status: Disposed12 Oct 2026AY 2022-2023
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