GURDEV SINGH,UTTAR PRADESH V. ITO-1(3), RAMPUR-2, JURISDICTIONAL ASSESSING OFFICER, RAMPUR BUSHER

ITA 3544/DEL/2024

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The case involves an appeal by Gurdev Singh against the order of the Commissioner of Income Tax (Appeals), which disallowed a claim for deduction of Rs.12,91,486 for late payment of employees' contributions to ESIC and EPF. The Centralized Processing Centre (CPC) had made this disallowance based on the Auditor's Report, which noted the due dates and actual payment dates but did not recommend any disallowance. The Tribunal considered the legal precedent set by the Supreme Court in Checkmate Services P. Ltd. vs. CIT, which applied to similar circumstances and confirmed the disallowance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472471 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Other Referred Cases: Checkmate Services P. Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: HEMANT JAIN; THROUGH VC
• Section: 143(3); 143(1); 43B

Judgement Text

" आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.3544/िदʟी/2024 (िन.व. 2020-21) ITA No.3544/DEL/2024 (A.Y.2020-21) Gurdev Singh, H. No. C-3, Sai Apartments, Batra Colony, Kaushalganj Rampur, Bilaspur, Uttar Pradesh 244921 PAN: AMFPS-9534-G ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Ward-1(3), Rampur-2, Aayakar Bhawan, Civil Lines, Moradabad, Uttar Pradesh 244002 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Hemant Jain, Advocate (Through VC) ŮितवादीȪारा/Respondent by : Shri Sanjay Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 04.02.2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 12.02.2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 06.06.2024, for assessment year 2020-21. 2. Shri Hemant Jain, appearing on behalf of the assessee submits that the solitary issue raised in appeal is against disallowance of Rs.12,91,486/- u/s.36(1)(va) r.w.s 2(24)(x) and section 43B of the Income Tax Act, 1961(hereinafter referred to as 'the Act’) for late payment of employees contribution to ESIC and EPF. The ld. Counsel for the assessee submits that return of income filed by the assessee was processed by Centralized Processing Centre (CPC) u/s. 143(1) of the Act on 2 ITA No.3544/DEL/2024 (AY 2020-21) 15.02.2021. Adjustments u/s.143(1)(a)(iv) of the Act can only be made for expenses or claims specifically flagged for disallowance in Audit Report but not accounted for in return. In the instant case in Auditor’s Report there was no mention of delayed contributions under ESIC and EPF. Therefore, adjustment made by the CPC based on Audit Report u/s.143(1)(a)(iv) of the Act is unjustified. In Auditor’s Report the due dates and actual payment dates of employee’s contribution towards Provident Fund were mentioned without recommending any disallowance. The CPC made disallowance u/s. 36(1)(va) of the Act merely on the basis of aforesaid observations in the Auditor’s Report. The ld. Counsel for the assessee fairly stated that contribution towards ESIC and EPF though deposited after due date provided under respective Acts, were made before the due date for filing return of income u/s. 139(1) of the Act. In support of his contentions, he placed reliance on various Tribunal decisions and prayed for deleting disallowance. Further, referring to the decisions of Checkmate Services P. Ltd. vs. CIT 143 taxmann.com 178 (SC). He submitted that the said decision was rendered in the context of assessment framed u/s. 143(3) of the Act and not u/s. 143(1)(a) of the Act. Hence, law laid down in the aforesaid decision would not apply to the facts of instant case. 3. Shri Sanjay Kumar, representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. 4. Both sides heard. The short issue in appeal by the assessee is against disallowance made u/s.36(1)(va) of the Act in respect of delay in deposit of employee’s contribution to EPF/ESIC during the period relevant to assessment year under appeal. It is an admitted fact that during relevant period, the assessee had deposited employee’s contribution towards EPF/ESIC beyond the due dates as specified under relevant Acts. The Hon’ble Apex Court in the case of Checkmate 3 ITA No.3544/DEL/2024 (AY 2020-21) Services P. Ltd. (supra) unequivocally held that employee’s contributions towards PF and ESIC deposited beyond the due date as mandated under respective Acts are liable to be disallowed under provisions of section 36(1)(va) of the Act. Hence, in light of the law expounded by Hon’ble Apex Court, I find no error in impugned order. 5. The ld. Counsel for the assessee in an attempt to distinguish the law expounded by Hon’ble Apex Court in the case of Checkmate Services P. Ltd. (supra) contended that the decision in the case of Checkmate Services P. Ltd.(supra) has been rendered where the assessment was made u/s. 143(3) of the Act, whereas in case of the assessee the assessment has been completed u/s. 143(1) of the Act. I find aforesaid argument of the assessee without merit. The law explained by Hon’ble Apex Court with regard to deposit of employee’s contributions to ESIC/EPF does not distinguish as to whether the assessment is framed u/s. 143(3) or 143(1) of the Act. Once there is delay in deposit of employee’s share of contribution under EPF/ESIC vis a vis due dates specified under the relevant Acts, disallowance u/s.36(1)(va) r.w.s 43B of the Act has to be made on such delayed deposits. 6. In light of above observations appeal of the assessee is dismissed being devoid of any merit. Order pronounced in the open court on Wednesday the 12th day of February, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 12.02.2025 NV/- 4 ITA No.3544/DEL/2024 (AY 2020-21) ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "