SADAKAT ALI, PROP S P ENTERPRISES,SONIPAT vs. ITO, WARD-4, SONIPAT
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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI SAKTIJIT DEY
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI
BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA No. 1709/Del/2022 Assessment Year: 2018-19
Sadakat Ali, Prop. S P Vs. ITO, Ward-4, Enterprises, Devru Road, Sonipat. Shiv Solony, Gali No.11, Sonipat (Haryana). PAN :AGRPA7294D (Appellant) (Respondent)
Appellant by N o n e Respondent by Shri Om Prakash, Sr. DR
Date of hearing 20.03.2023 Date of pronouncement 31.03.2023
ORDER This is an appeal by the assessee against order dated 24.05.2022
passed by the National Faceless Appeal Centre (NFAC), Delhi
pertaining to assessment year 2018-19.
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When the appeal was called out for hearing, none appeared on
behalf of the assessee. However, assessee has sent an application
through e-mail seeking adjournment.
On perusal of record, it is observed, on previous five occasions,
though, the appeal was fixed for hearing, on none of the occasions, the
assessee did appear. In fact, hearing notices issued through postal
authorities have returned back unserved time and again. Therefore,
considering the fact that sufficient opportunity has already been
granted to the assessee, which he has failed to avail and also the fact
that the issue in dispute is squarely covered by the decision of the
Hon'ble Supreme Court, I am inclined to decide the appeal ex parte
qua the assessee after hearing the learned Departmental
Representative and based on material available on record.
As could be seen from the grounds raised, the dispute in the
present appeal is confined to disallowance of deduction claimed of
Rs.1,51,020, being employees contribution to Provide Fund (PF) and
Employees State Insurance (ESI), paid beyond the due date prescribed
under Section 36(1)(va) of the Act.
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I have considered submissions of learned Departmental
Representative and perused the material available on record.
While processing the return of income filed by the assessee for
the impugned assessment year, the Centralized Processing Centre
(CPC) noticed that employees contribution to PF/ESI was paid by the
assessee beyond the due date prescribed under Section 36(1)(va) of
the Act. Therefore, in the intimation issued under Section 143(1) of
the Act, the CPC disallowed the deduction claimed and added back to
the income of the assessee.
Against the intimation issued, the assessee filed a rectification
application under Section 154 of the Act, which was also dismissed.
Against the order passed under Section 154 of the Act, the assessee
preferred an appeal before the first appellate authority, which was
disposed of by the impugned order, upholding the adjustment made by
the CPC. It is the case of the assessee before the departmental
authorities as well as before me that employees contribution to
PF/ESI, though, was not paid within the due date prescribed under the
relevant Status governing payment of PF and ESI, as required under
Section 36(1)(va) of the Act, however, deduction claimed has to be
4 ITA No.1709/Del./2022
allowed as the payments were made before the due date of filing of
return under Section 139(1) of the Act.
In my view, the aforesaid claim of the assessee cannot be
accepted in view of the decision of the Hon'ble Supreme Court in
case of Checkmate Services Pvt. Ltd. Vs. PCIT (2022) 143
Taxman.com 178 (SC), wherein, the Hon'ble Supreme Court has held
that employees contribution to PF/ESI, if not paid within the due date
prescribed under the statutes governing such payment in terms of
section 36(1)(va) of the Act read with section 2(24)(x), such amount
has to be treated as income of the assessee, hence, not allowable as
deduction under Section 43B of the Act, even if, such payments are
made before the due date of return of income under Section 139(1) of
the Act. While laying down such ratio, Hon'ble Supreme Court has
carved out difference between employees’ contribution and
employer’s contribution to PF and ESI. Thus, respectfully following
the ratio laid down by the Hon'ble Supreme Court in the above
referred case, I hold that deduction claimed by the assessee is not
allowable. Accordingly, I uphold the decision of learned
Commissioner (Appeals) on the issue. Grounds are dismissed.
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In the result, the appeal is dismissed. Order pronounced in the open court on 31st March, 2023. Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 31st March, 2023. Mohan Lal
