RADIAL INTERNATIONAL,NEW DELHI vs. DCIT,CENTRAL CIRCLE-1, NEW DELHI

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ITA 340/DEL/2023Status: DisposedITAT Delhi18 July 2023AY 2020-213 pages
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What did the Tribunal hold?

The Tribunal held that if the due date for PF deposit falls on a national holiday, the payment made on the next working day should be allowed. The issue was remitted back to the AO for examination.

What were the facts?

The assessee disallowed a PF payment of Rs.89,644/- deposited after the due date. The CIT(A) confirmed this disallowance, citing the Supreme Court's decision in M/s. Checkmate Services Pvt. Ltd.

What were the issues?

Whether PF payment made on the next working day after a holiday, which was the due date, is considered a delayed payment attracting disallowance.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

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Income Tax Appellate Tribunal, DELHI BENCH ‘F’ : NEW DELHI

For Appellant: Shri Nagesh Kumar Behl, Advocate
For Respondent: Shri Sanjay Kumar, Sr. DR
Hearing: 13.07.2023

PER SHAMIM YAHYA, ACCOUNTANT MEMBER :

This appeal by the assessee is directed against the order of the ld.

CIT (Appeals)-23, New Delhi dated 14.12.2022 pertaining to Assessment Year 2020-21.

2.

The grounds of appeal taken by the assessee read as under :-

1.

“1. That the order of Ld. Commissioner (Appeals) is contrary to the law and the facts of the appellant’s case. 2. That the AO (CPC) erred in disallowing the PF payment amounting to Rs.89,644/- deposited on or before the due date of filing of Income Tax Return during the year.

3.

That the Ld. CIT (A) erred in holding that PF deposited immediately on the next working day (due date being national holiday) would be considered as delayed payment and attract disallowance u/s 36(1)(va) of the Act.” 3. Brief facts of the case are that in this case, AO/CPC under section 143(1) of the Income-tax Act, 1961 (for short 'the Act') disallowed payment of PF amounting to Rs.89,644/- which was deposited after the due date under the relevant Act. Upon assessee’s appeal, ld. CIT (A) confirmed the same by referring to Hon’ble Supreme Court order in the case of M/s. Checkmate Services Pvt. Ltd. (2022) 143 taxmann.com 178 (SC).

4.

Against the above order, assessee is in appeal before us. We have heard both the parties and perused the records.

5.

Ld. Counsel of the assessee submitted that the last date for depositing of payment of PF was national holiday and in such a situation, the deposit was made on the next date and the same should be accepted.

For this proposition, he referred to ITAT order dated 29.05.2023 in for AY 2018-19 where, in similar circumstances, ITAT has concluded as under :-

“ In view of the provisions of the General clauses Act, 1897, reproduced above, we feel it appropriate to restore the issue back to the file of AO for examining the payments made on day next to due date, being holiday on due date and allow the deduction accordingly. The grounds raised by the assessee are accordingly allowed partly for statistical purposes. agree with the submissions that if the last date for depositing of payment is a holiday and the payment is made on the next date, the same should be allowed, as has been decided in the abovesaid case of ITAT. We also feel it appropriate to remit the issue back to the file of AO for examining the payments made on day next to due date, being holiday on due date and allow the deduction accordingly.

7.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 18th day of July, 2023.

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