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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI SAKTIJIT DEY
ORDER This is an appeal by the assessee against the order dated 30.11.2022 by the National Faceless Appeal Centre (NFAC), Delhi pertaining to assessment year 2018-19.
When the appeal was called for hearing, none appeared on behalf of the assessee to represent the case. However, a letter dated 10.04.2023 on behalf of the assessee has been filed in the Registry seeking adjournment on the ground that concerned person who looks after Income-tax matters has gone out of station for bank audit.
I find the aforesaid ground seeking adjournment unsatisfactory.
On perusal of record, it is observed that on Ist March 2023 when the appeal came up for hearing, the assessee sought adjournment more or less on identical grounds that the very same person is not in a position to attend the case due to his illness. On the second date of hearing, surprisingly, no one appeared on behalf of the assessee.
Today also, no one appeared, instead, an application seeking adjournment has been filed in the Registry.
On perusal of record, it is observed that the issue in dispute is squarely covered against the assessee by a decision of the Hon'ble Supreme Court. In fact, learned Departmental Representative has filed a written submission on the first day of hearing itself stating the aforesaid facts. Thus, it is apparent, being conscious to the fact that the issue stands covered against it, the assessee is adopting dilatory tactics.
In view of the aforesaid, I decline assessee’s request for adjournment and proceed to dispose of the appeal ex parte qua the assessee after hearing learned Departmental Representative and based on material available on record.
As could be seen from the grounds raised, the only dispute arising in the appeal is on account of disallowance of Rs.25,27,369, being delayed payment of employees contribution to Provident Fund (PF) and Employees State Insurance (ESI).
Briefly, the facts are, while processing the return of income filed by the assessee for the impugned assessment year, the Centralized Processing Centre (CPC) noticed that, though, employees contribution to PF and ESI were paid beyond the date prescribed under the relevant statutes governing such payment, however, the assessee had claimed deduction of such payment while computing its income.
Being of the view that the deduction claimed, being in violation of section 36(1)(va) of the Act, the CPC disallowed the deduction claimed in the intimation issued under Section 143(1) of the Act.
Against the intimation issued under Section 143(1) of the Act, the assessee preferred an appeal before learned Commissioner (Appeals) contesting the disallowance. However, learned Commissioner (Appeals) upheld the disallowance.
I have heard learned Departmental Representative and perused the material on record.
Undisputedly, employees contribution to PF and ESI were not remitted to the government account within the period prescribed under the relevant statutes governing such payment. Section 36(1)(va) of the Act makes it clear that in case employees contribution to PF and ESI are not paid within the due date prescribed under the relevant statutes, they will be treated as income of the concerned assessee in terms of section 2(24)(x) of the Act. Whereas, the assessee has claimed deduction of the amount on the ground that they were paid before the due date of filing of return of income under Section 139(1) of the Act.
I am of the view, the aforesaid claim of the assessee is not acceptable because of the clear statutory provisions contained under Section 36(1)(vi) read with secton2(24)(x) of the Act. In any case of the matter, the issue is no more res integra in view of the ratio laid down by the Hon'ble Supreme Court in case of Checkmate Services Pvt. Ltd. vs. PCIT – 143 Taxmann.com 178.
Further, assessee’s claim that no such disallowance can be made by way of adjustment under Section 143(1)(a) of the Act would be of no relevance in view of the decision of the co-ordinate bench in case of Suvleen Kaur Vs. ITO & Ors. - & Ors.
Dated 09.01.2023.
In view of the aforesaid I do not find merits in the grounds raised and accordingly uphold the disallowance/addition made.
In the result, the appeal is dismissed. Order pronounced in the open court on 19th April, 2023.