CHECKMATE SERVICES PVT. LTD.,VADODARA V. THE ACIT, CIRCLE-1(1)(1), VADODARA

ITA 1504/AHD/2025

AI Insights

The case involves Checkmate Services Pvt. Ltd., which appealed against the order of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal was related to the disallowance of Rs. 10,09,59,768 for delayed payment of employees' contribution to PF/ESI and an addition of Rs.2,78,40,685 due to alleged discrepancies between revenue receipts in the books and Form 26AS. The Tribunal upheld the disallowance related to PF/ESI contributions based on precedents but remanded the issue of revenue mismatch back to the Assessing Officer for detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781367 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 29-07-2025
• Other Referred Cases: CIT Vs. Gujarat State Road Transport Corporation, Checkmate Services (P.) Ltd. v. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KINJAL V. SHAH
• Keywords: Opportunity of being heard; TDS; FORM 26AS
• Section: 143(3)

Judgement Text

" IN IN IN IN THE INCOME TAX APPELLATE THE INCOME TAX APPELLATE THE INCOME TAX APPELLATE THE INCOME TAX APPELLATE TRIBUNAL TRIBUNAL TRIBUNAL TRIBUNAL “ “ “ “B B B B” ” ” ” BENCH, BENCH, BENCH, BENCH, AHMEDABAD AHMEDABAD AHMEDABAD AHMEDABAD BEFORE BEFORE BEFORE BEFORE DR. B DR. B DR. B DR. B. . . .R R R R. . . .R R R R. . . . KUMAR KUMAR KUMAR KUMAR, , , , VICE VICE VICE VICE- - - -PRESIDENT PRESIDENT PRESIDENT PRESIDENT SHRI SIDDHARTHA NAUTIYAL SHRI SIDDHARTHA NAUTIYAL SHRI SIDDHARTHA NAUTIYAL SHRI SIDDHARTHA NAUTIYAL, , , , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA No. 1504/Ahd/2025 (Assessment Year: 2015-16) Checkmate Services Pvt. Ltd., 1115 to 1120, 73 East Avenue, Sarabhai Campus, Near Genda Circle, Vadodara-390023 [PAN :AAACC 8465 A] Vs. Asstt. Commissioner of Income-tax, Circle 1(1)(1), Vadodara (Appellant Appellant Appellant Appellant) .. (Respondent Respondent Respondent Respondent) Appellant by : Appellant by : Appellant by : Appellant by : Ms. Kinjal V. Shah, AR Respondent by Respondent by Respondent by Respondent by: : : : Shri R.P. Rastogi, CIT-DR Date of Hearing Date of Hearing Date of Hearing Date of Hearing 18.09.2025 Date of Pronouncement Date of Pronouncement Date of Pronouncement Date of Pronouncement 29.09.2025 O R D E R O R D E R O R D E R O R D E R PER PER PER PER DR. B.R.R. KUMAR, VICE DR. B.R.R. KUMAR, VICE DR. B.R.R. KUMAR, VICE DR. B.R.R. KUMAR, VICE- - - -PRESIDENT PRESIDENT PRESIDENT PRESIDENT: : : :- - - - This appeal has been filed by the Assessee against the order dated 02.07.2025 passed by the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (‘Ld. CIT(A)’ in short), under Section 250 of the Income-tax Act, 1961 (‘the Act’ in short), relating to the Assessment Year 2016-17. 2. The effective grounds raised by the assessee are as follows:- “1. The CIT(A) has erred both in Law and in Fact in confirming the disallowance of Rs. 10,09,59,768/- alleged it to be delayed Payment to Employees Contribution to PPF/ESI. 2. Your Appellant submit that in view of facts and circumstances of the case and as per provisions of Law as then existed the payment is made before filing Return of Income and therefore disallowance is not called for. The AO has failed to give any Show Cause Order and the amount that he had around for Addition. Printed from counselvise.com ITA No. 1504/Ahd/2025 Checkmate Services Pvt Ltd Vs. ACIT Asst. Year : 2015-16 - 2– 3. The CIT(A) has also erred in confirming applicability of Sec.26AS and confirming addition of Rs.2,78,40,685/- as alleged difference in revenue receipt between books of accounts and as per 26AS. Your Appellant a Private Ltd. Co. has been regularly maintaining Books of Accounts duly audited and also subject to Tax Audit and same method of accounting is followed from year to year by the Company and accepted by Income Tax Department regarding tax at source and payment of tax to the revenue and it is a case of \"mismatch\".” 3. The brief facts of the case are that the assessee is engaged in the business of providing security personnel services and operates as a private limited company. It filed its return of income on 29.09.2015 declaring a total income of Rs.14,94,15,640/-. The case was subsequently selected for scrutiny under CASS and the assessment was completed under Section 143(3) of the Act on 27.12.2017, making total additions of Rs.12,88,00,453/- . The assessee challenged the order before the Ld. CIT(A), who confirmed the disallowances, leading to the present appeal. Ground No.1 & 2 Ground No.1 & 2 Ground No.1 & 2 Ground No.1 & 2 – – – – Disallowance of Employees’ Contribution to PF/ESI Disallowance of Employees’ Contribution to PF/ESI Disallowance of Employees’ Contribution to PF/ESI Disallowance of Employees’ Contribution to PF/ESI 4. The Assessing Officer made a disallowance under Section 36(1)(va) r.w.s. 2(24)(x) of the Act for delay in deposit of employees’ contribution to PF/ESI beyond the due date as prescribed under the statute. We find that the issue stands squarely covered against the assessee by the judgment of Hon’ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation in Tax Appeal No. 637 of 2013 and the judgement of the Hon’ble Apex Court in assessee’s own case, i.e. Checkmate Services (P.) Ltd. v. CIT [2022] 143 taxmann.com 178, wherein it was held that employees’ contribution to PF/ESI is allowable as deduction only if deposited within the due dates as prescribed under the respective Acts and not merely by the date of filing return under Section 139(1) of the Act. Printed from counselvise.com ITA No. 1504/Ahd/2025 Checkmate Services Pvt Ltd Vs. ACIT Asst. Year : 2015-16 - 3– 4.1 In view of the binding precedent of the Hon’ble Supreme Court and Hon’ble High Court, we find no infirmity in the order of the Ld. CIT(A). Accordingly, this ground of appeal is dismissed. Ground No. Ground No. Ground No. Ground No.3 3 3 3– – – –Addition on Account of Revenue Mismatch with Form 26AS Addition on Account of Revenue Mismatch with Form 26AS Addition on Account of Revenue Mismatch with Form 26AS Addition on Account of Revenue Mismatch with Form 26AS 5 This ground pertains to the addition made by the Assessing Officer and confirmed by the CIT(A) on account of alleged difference between the revenue as per books of accounts and Form 26AS. The Assessing Officer observed discrepancies to the extent of Rs.2,78,40,685/- in revenue reported in Form 26AS and as per the assessee’s audited books. The assessee submitted that the mismatch was due to various practical issues such as (i) different accounting methods adopted by customers, (ii) deduction of TDS on gross amount, (iii) TDS on reimbursement of expenses, (iv) timing differences due to financial year mismatches, (v) incorrect PAN quoted by deductors etc… The Ld. CIT(A) observed that the assessee has given general type of reasons for the said difference in revenue receipts as per books and Form 26AS, but failed to reconcile or justify the mismatch with supporting documents. 5.1 We have carefully considered the submissions and the documents available on record. While the assessee has offered some reasonable explanations for the discrepancies, no detailed party-wise reconciliation has been submitted either before the Assessing Officer or the CIT(A) to substantiate these claims. Given the nature of the assessee’s business, such mismatches may not be indicative of income concealment. Therefore, in the interest of justice, we consider it appropriate to restore this matter to the file of the Assessing Officer for a fresh examination. The Assessing Officer shall re-examine the reconciliation to be provided by the assessee, after Printed from counselvise.com ITA No. 1504/Ahd/2025 Checkmate Services Pvt Ltd Vs. ACIT Asst. Year : 2015-16 - 4– affording the assessee a reasonable opportunity of being heard. The assessee is directed to submit a complete party-wise reconciliation along with all necessary supporting documents. This ground is accordingly allowed for statistical purposes. 6. In the result, appeal of the assessee is partly allowed for statistical purposes. The order The order The order The order is is is is pronounced i pronounced i pronounced i pronounced in n n n the the the the open open open open Court Court Court Court on on on on 29 29 29 29. . . .0 0 0 09 9 9 9.202 .202 .202 .2025 5 5 5. . . . Sd/ Sd/ Sd/ Sd/- - - - Sd Sd Sd Sd/ / / /- - - - ( ( ( (S S S SIDDHARTHA NAUTIYAL IDDHARTHA NAUTIYAL IDDHARTHA NAUTIYAL IDDHARTHA NAUTIYAL) ) ) ) (DR. B.R.R. KUMAR) (DR. B.R.R. KUMAR) (DR. B.R.R. KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE VICE VICE VICE- - - -PRESIDENT PRESIDENT PRESIDENT PRESIDENT Ahmedabad; Dated 29.09.2025 **btk आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to Copy of the Order forwarded to Copy of the Order forwarded to Copy of the Order forwarded to : : : : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ / / / BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, , , , अहमदाबाद / / / / ITAT, Ahmedabad ITAT, Ahmedabad ITAT, Ahmedabad ITAT, Ahmedabad 1. Date of dictation ….words processed by Hon’ble VP on his PC on 19.09.2025 2. Date on which the typed draft is placed before the Dictating Member …...25.09.2025 3. Other Member …25.09.2025 4. Date on which the approved draft comes to the Sr.P.S./P.S …26.09.2025 5. Date on which the fair order is ed before the Dictating Member for pronouncement …29.09.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S ……29.09.2025 7. Date on which the file goes to the Bench Clerk …......29.09.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "