CONFIDENCE PETROLEUM INDIA LIMITED,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX- CIRCLE 1(2)(1), MUMBAI, MUMBAI

ITA 3699/MUM/2025

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The case involves Confidence Petroleum India Limited, the appellant, contesting an addition of Rs. 4,99,749 to their income for the Assessment Year 2020-21, which was imposed due to a delay in depositing employee's contributions to the Provident Fund and ESIC. The initial assessment under section 143(1) of the Income-tax Act by the CPC resulted in this addition. The assessee argued that the contributions were made before the filing of the income tax return, hence should be deductible. However, both the CIT(A) and the Tribunal rejected this argument, citing the requirement under section 36(1)(va) that contributions must be deposited within the statutory due dates to be eligible for deduction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713292 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2020-2021
• Other Referred Cases: Checkmate Services Pvt Ltd Ors. vs CIT & Ors. [(2022]448 ITR 518 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIRABHADRA S. MAHAJAN
• Assessee Lawyers: S.V. JOSHI
• Section: 143(3)

Judgement Text

"|आयकर अपीलीय न्यायाधिकरण न्यायपीठ, म ुंबई| IN THE INCOME-TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सुं./ITA No. 3699/MUM/2025 (नििाारण वर्ा / Assessment Year: 2020-21) Confidence Petroleum India Limited B-13, Prabhu Krupa Society, Nanda Patkar Road, Santacruz West, Mumbai 400054 v/s. बिाम Deputy Commissioner of Income Tax -Circle 1(2)(1), Mumbai Pratishtha Bhavan, 3 rd & 4th Floors, 101, M.K. Road, Mumbai 400020 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACD3658C Appellant/अपीलार्थी .. Respondent/प्रनिवादी निर्ााररती की ओर से /Assessee by: Shri S.V. Joshi राजस्व की ओर से /Revenue by: Shri Virabhadra S. Mahajan, Sr. DR. स िवाई की िारीख / Date of Hearing 16.07.2025 घोर्णा की िारीख/Date of Pronouncement 31.07.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the CIT(A) National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] 13.03.2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year: 2020-21. 2. The assessee has raised the following grounds of appeal: “1. That the learned CIT(A) erred in law and facts of the case and confirmed the addition of Rs. 4,99,749/- under section 36(1)(va) as processed by CPC and carried Printed from counselvise.com P a g e | 2 ITA No. 3699/Mum/2025 Ay 2020-21 Confidence Petroleum India Limited on by A.O. on account of delay in payment of employee’s contribution Provident Fund. The addition made therefore is totally wrong and illegal on the facts of the case. 2. That the Ld. CIT(A) failed to appreciate the fact that the delay in payment of employee’s contribution Provident Fund from the funds date, but was paid before filing of return of Income for the year. 3. That the Ld. CIT(A) failed to consider the fact that prime facie adjustment made for payment of PF by CPC was out of purview of section 143(1). The action of CPC on disallowance of PF as prime facie disallowance adjustment is totally illegal on facts and law. 4. That the Appellant craves to leave, add, alter or amend any of the ground at or before hearing.” 3. Brief facts of the case are that the assessee filed its return declaring income of Rs. 63,95,24,490/- for AY 2020-21 on 30.01.2021. The assessment was completed u/s. 143(3) r.w.s. 144B of the Act at an income of Rs. 64,00,24,240/- which also included an addition of Rs. 4,99,749/- made by the CPC at the time of processing u/s. 143(1), on account of delay in payment of employee’s contribution of provident fund and ESIC. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A), claiming that amount of delayed payment of PF was made before the filing of return and hence the same should be allowed as a deduction. Ld. CIT(A) observed that as per provisions of Section 36(1)(va) of the Act, the assessee is entitled to claim the deduction in respect of the employee’s contributions only if there are credited to the Fund before the due date specified by the respective statute. Accordingly, Ld. CIT(A) dismissed the assessee’s appeal vide order dated 13.03.2025. Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the Tribunal. Printed from counselvise.com P a g e | 3 ITA No. 3699/Mum/2025 Ay 2020-21 Confidence Petroleum India Limited 4. We have heard the rival submissions and perused the material placed before us. We find that the assessee’s case is squarely covered by the decision of Hon’ble Apex Court in the case of Checkmate Services Pvt Ltd Ors. vs CIT & Ors. [(2022]448 ITR 518 (SC)], wherein it has been held that the deposit of the employee’s share of EPF and ESI etc., can be allowed as deduction u/s. 36(1)(va) only if it is deposited before the time limits prescribed under the respective statutes and not if it is deposited only prior to the due date of filing returns u/s. 139(1) of the Act. 5. In view of the above decision of the Hon’ble Apex Court, the order of Ld. CIT(A) is justified and deserves to be held up. The assessee’s appeal is accordingly dismissed. 6. In the result, the appeal of the assessee is dismissed Order pronounced in the open court on 31.07.2025. Sd/- Sd/- AMIT SHUKLA RENU JAUHRI (न्यानयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 31.07.2025 दिव्य रमेश न ुंिग वकर/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. Printed from counselvise.com P a g e | 4 ITA No. 3699/Mum/2025 Ay 2020-21 Confidence Petroleum India Limited सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण/ ITAT, Bench, Mumbai. Printed from counselvise.com "