Loading judgment…

Sonia Chawla, Faridabad vs ITO | ITAT Delhi 2023 | BharatTax

SONIA CHAWLA,FARIDABAD vs. ITO,WARD-2(4), FARIDABAD

ITA 669/DEL/2023Status: DisposedITAT Delhi21 August 2023AY 2018-19Bench: SHRI SAKTIJIT DEY (Vice President), SHRI PRADIP KUMAR KEDIA (Accountant Member)8 pages

No AI summary yet for this case.

Cases cited in this judgment

Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.

Checkmate Services Pvt. Ltd. v. CIT
143 Taxmann.com 178 · 2022 · SC
1,392 citing
Kanoi Paper and Industries Ltd. v. ACIT
75 TTJ 448 · 2002 · ITAT
111 citing
Pr.CIT v. Khyati Realtors (P) Ltd.
141 Taxmann.com 461 · 2022 · SC
81 citing

Income Tax Appellate Tribunal, DELHI BENCH “G” DELHI

Before: SHRI SAKTIJIT DEY & SHRI PRADIP KUMAR KEDIA

For Appellant: Shri Girish Gupta, CA

For Respondent: Shri Anuj Garg, Sr.DR

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 12.01.2023 arising from the rectification order dated 13.11.2019 passed by the Assessing Officer (AO) under Section 154 of the Income Tax Act, 1961 (the Act) concerning AY 2018-19.

2.

The captioned appeal relates to Assessment Years 2018-19 involving issue of disallowance of expenditure towards employees contribution to ESIC/PF under Section 36(1)(va) of the Act.

3.

Briefly stated, the assessee is engaged in the business of man power supply and has filed the return of income declaring total income at Rs.9,74,671/-. The Assessing Officer passed an order under Section 154 r.w. Section 143(1) assessing the total income at Rs.38,75,370/- by making adjustment on account of delay in deposit of PF/ESIC in relation to employee’s contribution.

1.

4. A disallowance of Rs.30,75,800/- was carried out on account of late deposit of employees contribution to PF/ESIC. The assessee filed rectification application which was rejected by the Assessing Officer vide order dated 13.11.2019.

5. The assessee preferred appeal before the CIT(A) against the proposed adjustment. The CIT(A) also denied the relief in the light of judgment of Hon’ble Supreme Court in the case of Check Mate Pvt. Ltd. vs. CIT (2022) 143 taxmann.com 178 (SC).

6. Aggrieved by the first appellate order, the assessee is in appeal before the Tribunal.

9. We have carefully considered the rival submissions and perused the material available on record. The disallowance of employees’ contribution to PF/ESIC for breach of condition under Section 36(1)(va) is in controversy. 9.1 We notice at the outset that an opportunity was given via electronic platform of the deptt. for the proposed adjustments and in the absence of e-response, the adjustments were carried out the CPC-Bengluru and intimation was issued enhancing the assessed income in the captioned assessment years. The CIT(A) in the first appeal has sustained the adjustments towards belated deposits of employees’ contribution to PF/ESIC in the light of the judgment rendered by the Hon’ble Supreme Court in Checkmate Pvt. Ltd. vs. CIT, (2022) 143 taxmann.com 178 (SC). The contention of the Assessee that such additions cannot be made under the umbrella of S. 143(1) is covered against the assessee the decision of the co- ordinate bench in the case of Weather Comfort Engineers Private Limited vs. ACIT-CPC order dated 15/02/2023. The action of CPC and CIT(A) thus cannot be faulted where some opportunity was admittedly given for e-response. 9.2 We now turn to alternate plea on behalf of the assessee for grant of deduction under general provisions for deduction of expenditure under S. 37 of the Act. We do not see any merit in such plea that the belated deposit of employees contributions to PF/ESIC governed under Section 36(1)(va) is also simultaneously amenable to deduction under Section 37(1) of the Act. In terms of the provision, Section 37(1) permits deduction of expenditure which is not in the nature of expenditure prescribed in Sections 30 to 36 of the Act and also not being in the nature of capital expenditure or personal expenses of the assessee. Thus, in view of such mandate of law, the deduction of expenditure under the general clause of Section 37(1) would not extend to expenditure specially covered within the ambit of Section 36(1)(va) of the Act. The Hon’ble Supreme Court in the case of Checkmate Pvt. Ltd. (supra) itself explains this position in Para 32 of the Judgment. Such view also draws support from the observations made in recent judgment of the Hon’ble Supreme Court in the case of Pr.CIT vs. Khyati Realtors (P) Ltd. (2022) 141 taxmann.com 461 (SC). The alternate plea is thus without any merit. 9.3 We also take note of yet another plea made out on behalf the assessee towards methodology of calculation of default under the relevant PF/ESIC Act. The Ld. Counsel contends that the month during which the disbursement of salary is actually made would be relevant for the purposes of determination of due date of deposit under the respective statute. The accrual of liability towards payment of salary without actual disbursement would not fasten obligation for deposits of employees contribution in the labour Acts per se. as observed by the co-ordinate bench in Kanoi Paper and Industries Ltd. vs. ACIT (2002) 75 TTJ 448 (Cal). This aspect has not been found to be examined by the Assessing Officer or CIT(A). Hence without expressing any opinion on merits on this aspect, we deem it expedient to restore the matter to the file of designated AO. It shall be open to the assessee to place factual matrix before the AO and take such plea for evaluation of the AO. The AO shall examine this aspect and fresh order in accordance with law after giving proper opportunity.