S K G TRADERS PRIVATE LIMITED,NEW DELHI vs. DCIT CIRCLE 22(2), NEW DELHI

The ld. Senior DR, candidly agreed to the prayer of assessee that the delay of 97 days in filing appeal before the Tribunal was caused due to the failure of the appellant company as there was financial crisis and the assessee company could not pay consultation fees to its tax advocate/advisor. Therefore delays is condoned and appeal is admitted for hearing on merits.

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. When the matter was called for hearing, none appeared for the assessee. It was seen that opportunities have been given in the past for compliance. However, none appeared on behalf of the assessee. Under these circumstances, we are constraint to proceed ex- parte in the absence of the assessee. The ld. assessee representative (AR) submitted that the authorities below have not considered the fact that the assessee has paid the contribution towards ESIC and EPF after the due date prescribed under the relevant provisions but the same was paid before due date of filing of return u/s. 139(1) of the Act, and such addition cannot be made in the intimation under section 143(1) of the Act.

4. Ld. Sr.DR for the Revenue on its part, contended that Central Processing Centre (“CPC”) has made additions of Rs. 27,70,629/- to the returned income of the assessee on account of late deposit of employees contribution to Provident Fund/ESIC deferred 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 judgment 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 deposit of employees contribution held in Trust by the employee Assessee are to be reckoned as taxable income of the assessee u/s. 2(24)(x) r.w. Section 43B 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 in the case of Cemetile Industries vs ITO TS-933-ITAT-2022 (Pune).