DOMECH FABRICATORS PRIVATE LIMITED ,MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 15(1)(2), MUMBAI

ITA 5422/MUM/2024

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The case involves Domech Fabricators Private Limited appealing against the order of the Ld.Addl/JCIT(A)-2, Siliguri, which disallowed a sum of Rs. 8,27,418 relating to employees' contribution to EPF/ESIC. The disallowance was initially made by the AO on the grounds that the contributions were paid beyond the due dates prescribed under the respective Acts. The Tribunal admitted the appeal despite it being barred by limitation, citing reasonable cause due to the hospitalization of the assessee's CA. The main legal contention revolved around the interpretation of section 36(1)(va) of the Income Tax Act in conjunction with section 43B, and whether the due dates for payment under the EPF/ESIC Acts were correctly determined.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471317 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Other Referred Cases: Checkmate Services P. Ltd. vs. CIT [2022] 143 taxmann.com 178 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.R. MAKWANA
• Assessee Lawyers: JOSEPH P.K
• Keywords: Set aside; Reasonable cause

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “D” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 5422/Mum/2024 Assessment Year :2014-15 Domech Fabricators Private Limited, Unit No. 1021, First Floor, G Wing, Aksha Business Park, Plot No. 3, Sector-25, Vashi Navi Mumbai PAN : AAFFD1230N vs. Asst. Commissioner of Income Tax, Circle-15(1)(2), 4th Floor, Aayakar Bhavan, M.K. Road, Mumbai (Appellant) (Respondent) Assessee by : Shri Joseph P.K. Revenue by : Shri R.R. Makwana, Sr.DR Date of Hearing : 31-12-2024 Date of Pronouncement : 01-01-2025 PER B.R. BASKARAN, A.M : The assessee has filedthis appeal challenging the order dt.07-07-2024 passed by the Ld.Addl/JCIT(A)-2, Siliguri and it relates to AY.2014-15. The only issue urged in this appeal relates to the disallowance of employees contribution of EPF/ESIC u/s. 36(1)(va) of the Income Tax Act, 1961 („the Act‟). 2 ITA No. 5422/Mum/2024 2. The appeal is barred by limitation by 40 days. The assessee has filed a petition along with an affidavit, wherein the reason for the delay was mentioned that the CA of the assessee got hospitalized, which resulted in delay. Copy of some medical documents are also furnished. We heard the parties on this preliminary issue. Having regard to the submissions made in the affidavit, we are of the view that there was reasonable cause for the assessee in filing the present appeal belatedly. Accordingly, we condone the delay and admit the appeal for hearing. 3. We heard the parties and perused the record. The AO has disallowed a sum of Rs. 8,27,418/- relating to employees‟ contribution to EPF/ESIC, since they have been paid beyond the due date prescribed under the respective Acts. The Ld.Addl/JCIT confirmed the addition by following the decision rendered by the Hon‟ble Supreme Court in the case of Checkmate Services P. Ltd., vs. CIT [2022] 143 taxmann.com 178 (SC). 4. It is the contention of the assessee that the due date for payment of tax under the respective Statutes have not been properly determined in accordance with the EPF/ESIC Act. It was also submitted that the section 36(1)(va) should be read along with sec.43B of the Act. Accordingly, it is contended by the assessee that the amount disallowed by the AO u/s. 36(1)(va) of the Act needs to be re-examined. 5. We heard the Ld.DR and perused the record. With regard to the contentions of the assessee that sec.36(1)(va) of the Act should be read along with sec.43B of the Act, the same is liable to be rejected in view of the decision rendered by Hon‟ble Supreme Court in the case of Checkmate Services P Ltd (supra). We notice that the Ld CIT(A) has placed reliance on the amendment brought in by Finance Act, 2021 in sec.36(1)(va) and 3 ITA No. 5422/Mum/2024 sec.43B of the Act. The contention of the assessee is that the Ld CIT(A) should not have placed reliance on the above said amendments. In our view, the above said contention shall become infructuous in view of the decision rendered by Hon‟ble Supreme Court in the case of Checkmate Services P Ltd (supra). 6. With regard to the claim of errors in the computation of the due dates, we are of the view that the same requires fresh examination at the end of the AO. Accordingly, we set aside the order passed by the Ld.Addl/JCIT(A) and restore this issue to the file of the AO with a direction to examine the claim of errors in computation of due date under the respective statutes and compute the disallowance u/s.36(1)(va) of the Act in accordance with the decision rendered by the Hon‟ble Supreme Court in the case of Checkmate Services P. Ltd., (supra). 7. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 01-01-2025 Sd/- Sd/- [SUNIL KUMAR SINGH] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated:- 01-01-2025 TNMM 4 ITA No. 5422/Mum/2024 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, “D” Bench, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "