KROWN BAKERS (INDIA) PVT. LTD.,NEW DELHI vs. ITO,WARD-14(4), NEW DELHI

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ITA 2617/DEL/2022Status: DisposedITAT Delhi16 May 2023AY 2019-203 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the deduction for delayed payment of employees' PF and ESI contributions is not allowable, as the payment was not made within the statutory due dates. This decision is in line with the Supreme Court's ruling in Checkmate Services Pvt. Ltd.

What were the facts?

The assessee claimed deduction for delayed payment of employees' contribution to Provident Fund (PF) and Employees' State Insurance (ESI). The CPC disallowed this deduction, and the appellate authority upheld the disallowance.

What were the issues?

Whether deduction for delayed payment of employees' PF and ESI contributions is allowable if paid before the due date of filing the return of income.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 139(1)

AI-generated summary — verify with the full judgment below

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

Before: SHRI SAKTIJIT DEY & SHRI M. BALAGANESH

Hearing: 09.05.2023Pronounced: 16.05.2023

ORDER PER SAKTIJIT DEY, JM: This is an appeal by the assessee against order dated 14.10.2022 passed by the National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2019-20.

2.

When the appeal was called for hearing, none appeared on behalf of the assessee to represent the case, despite issuance of notice of hearing. Considering the nature of dispute, we proceed to dispose of the appeal ex parte qua the assessee after hearing learned Departmental Representative and based on facts and materials on record.

3.

The dispute in the present appeal is confined to disallowance of deduction claimed on account of delayed payment of employees contribution to Provident Fund (PF) and Employees’ State Insurance (ESI). While processing the return of income filed by the assessee for the impugned assessment year, the Centralized Procession Centre (CPC), having found that employees contribution to PE and ESI were not paid within due date prescribed under the relevant statutes governing such payments in terms of section 36(1)(va) of the Income-tax Act, 1961 (for short ‘the Act’), made adjustment by adding back to the income of the assessee. Though, the assessee filed an application under section 154 of the Act for rectification, however, the same was dismissed by the CPC. Being aggrieved, assessee filed an appeal before the first appellate authority. By the impugned order, the first appellate authority dismissed the appeal by sustaining the addition made by the CPC.

4.

There is no dispute that the assessee has not paid employees’ contribution to PF and ESI within the time limit prescribed under the relevant statutes. It is the case of the 2 | P a g e assessee that the deduction should be allowed as the payment has been made before the due date of filing of return under section 139(1) of the Act. In our view, the aforesaid claim of the assessee is not acceptable, as now the issue stands decided against the assessee by the Hon’ble Supreme Court in case of Checkmate Services Pvt. Ltd. Vs CIT- I (CIVIL APPEAL No. 2833 of 2016 and Ors., dated 12th October, 2022)

5.

In this view of above, we do not find any merit in the ground raised. Accordingly, ground raised is dismissed.

6.

In the result, the appeal is dismised.

Order pronounced in the open court on 16th May, 2023

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