ITO, WARD-5, ROHTAK vs. RAJBIR L/H SHRI RAJESH, ROHTAK

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ITA 2576/DEL/2022Status: FixedITAT Delhi27 April 2023AY 2017-183 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that employee contributions to PF/ESI paid after the due date prescribed by the relevant Act must be added back to the assessee's income. This decision followed the Supreme Court's ruling in Checkmate Services Pvt. Ltd.

What were the facts?

The Revenue appealed the CIT(A)'s deletion of an addition made on account of late deposit of employee's contribution to PF/ESI. The assessee had paid these contributions after the due date specified in the respective Acts but before the due date for filing the return of income.

What were the issues?

Whether employee's contribution to PF/ESI, paid after the statutory due date but before the return filing due date, is deductible. Whether such contributions are governed by Section 43B or Section 36(1)(va) read with Section 2(24)(x).

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 2(24)(x),Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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

Before: SHRI SHAMIM YAHYA & SHRI CHALLA NAGENDRA PRASAD

For Respondent: DR Assessee by None
Hearing: 26.04.2023Pronounced: 27.04.2023

ORDER PER SHAMIM YAHYA, AM,

This appeal by the Revenue is directed against the order of the Ld.

National Faceless Appeal Centre (NFAC), Delhi, dated 25.08.2022 pertaining to Assessment Year 2017-18.

2.

The grounds of appeal reads as under:-

“1. Whether on the facts & in the circumstances of the case and in law, the ld. CIT(A) was correct in deleting addition of Rs.1,71,70,670/- on account of late deposit of employee’s contribution to PF/ESI beyond the prescribed time limit provided in the respective Acts in view of the judgment of Hon’ble Supreme Court in Civil Appeal No.2833 of 2016 in the case of Checkmate Services P. Ltd. vs Commissioner of Income Tax-1 dated 12.10.2022?

2. Whether on the facts & in the circumstances of the case and in law, the ld. CIT(A) was correct in holding that employees contribution to PF are governed by the provisions of Section 43B and not by Section 36(1)(va) r.w.s. 2(24(x) of the Income Tax Act, 1961?”

3.

The short issue in this case is that as to whether the Ld. CIT(A)

erred in deleting the addition of Rs.1,71,70,670/- made by the AO u/s 143(1) of the Act on account of PF & ESI contribution paid by the employees paid beyond the time specified in the respective statute but before the due date of filing of return of income u/s 139(1) of the Act.

4.

We find that the issue on merits is covered against the assessee by the decision of the Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. (2022) 143 taxmann.com 178 wherein it has been held that if employee contribution of provident fund and ESI paid beyond the due date as prescribed under the relevant Act then the same has to be added back in the income of the assessee. Respectfully following the precedent, we set-aside the order of the Ld. CIT(A) and confirmed the order of the AO.

5.

In the result, the appeal of the Revenue stands allowed.

Order pronounced in the open court on 27th April, 2023.

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