Omaxe World Street Private Limited, Faridabad V. ACIT,Circle-2(1), Delhi

ITA 1741/DEL/2022

AI Insights

The case involves Omaxe World Street Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, Delhi, concerning an assessment order passed under Section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2017-18. The primary issue was the disallowance of expenditure towards employees' contributions to ESIC/PF, which were not deposited within the statutory due dates. The Tribunal, referencing the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT, confirmed that such late deposits are to be treated as taxable income and are not deductible under Section 36(1)(va).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121621 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 22-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 01-08-2022
• Other Referred Cases: Checkmate Services Pvt. Ltd. vs. CIT (2022) 143 taxmann.com 178 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E” DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1741/DEL/2022 Assessment Year 2017-18 Omaxe World Street Pvt. Ltd. Sector-79, Omaxe World Street Pvt. Ltd. Faridabad Vs. ACIT, Circle-2(1) Delhi TAN/PAN: AADCR6560L (Appellant) (Respondent) Appellant by: None Respondent by: Ms. Smita Singh, Sr.DR Date of hearing: 23 08 2023 Date of pronouncement: 23 08 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he capt ione d a ppeal has bee n file d by t he assess ee a gainst the order of the ld. C ommissi on er of Inco me T ax (A ppea ls)- N ati ona l Fac ele ss A ppeal Centre ( N FA C), D elhi [ ‘CIT(A )’ in shor t] dated 0 7. 07. 2022 aris i ng f rom the as sess me nt order da te d 18. 12.2019 passed b y t he Assess ing Office r (A O ) under Se ct ion 143(3) of the Inc ome T ax A ct, 1961 (t he A ct ) c on cerni ng AY 2017-18. 2. T he ca ptioned appeal relat es t o Assess ment Y ear s 2017- 18 invol vi ng issue of dis allow a nce of ex penditu re t ow ards emplo ye es cont ri but io n to ESIC/PF unde r Secti on 36( 1)( va) of the A ct. 3. When th e matter w as cal le d for hearing, none appea re d for I.T.A. No.1741/Del/2022 2 the ass esse e. U nder the circu mst ance s, w e procee d ex-part e in the absence of t he assessee. 4. L d. Sr.D R for t he Re ve nue, on i ts par t, co nt ended that A ssessi ng O f fice r has r ightl y ma de addi t io n of Rs.1, 65, 347 /- to the re turne d incom e of t he ass essee on account o f late d eposits of empl oye es ’ contr ib ution to PF/ES IC w hil e pr ocessi ng t he retur n of inco me under Se cti on 143( 3) o f t he A ct. T he ap peal of th e assessee has be en rig htl y rej ec ted a nd con fi rmed b y the CIT (A ) in the light of t he j ud gment ren dered in the cas e o f Che ckm ate Services P v t. Ltd. vs. C IT ( 2022 ) 143 taxm ann. com 178 (SC ). The ld. S r. D R for the Revenue s ub mi tte d that e ven for the A ssess ment Y ear 2 017-18 in ques ti on, bela ted depos it of e mpl oyees ’ cont ri but io n held in t rust b y the e mpl oyer assessee are to be reck one d as taxable income und er S ect ion 2(24)(X ) r. w . Secti on 43B and deduction under Se ct ion 36 (1) (va ) of t he A ct woul d not be per mi ssible. 5. T he iss ue tow ar ds taxab il i ty of be lated e mpl oyees ’ cont ri but io n to PF / ESIC is no longe r res i nt egr a in the l ight of the judgment of H on’ ble Sup reme Court i n t he c ase of Che ckm ate Services (s upra). The H on ’bl e Supreme C ourt in this cas e obs erve d tha t In come Ta x A ct di ffe re nt ia tes bet w een the empl oye es ’ contr ibut ion and e mplo ye r c ont ribu tion to the PF/E SIC A ct. Whil e i n res pect of e mp lo ye r’s c ont ribution, Sect i on 43B is applicab le but how ever w ith res pect o f e mpl oyees ’ cont ri but io n, the con dit ions s pec ified i n Sec ti on 36(1) (va ) is appl icable and Sect ion 43B (b) does not cover e mpl oyees ’ cont ri but io n de duc ted by e mp lo yer fr om sa lar y of t he empl oye es. In pa ri t y w ith t he view ta ke n by C o- ordina te Be nc hes on the issu e, I.T.A. No.1741/Del/2022 3 on fi rst pr in ci pl es , we do n ot see any me ri t in t he c ase of the assessee f or impe rmi ssi bi lit y of such dis al low ance s under Se ct ion 143(3) o f the A c t. T he assessee has not b rought any mate rial cont rar y to facts note d b y the revenu e aut horit ies. 6. In the res ul t, the appeal of t he asses see is dismi sse d. Order was pronounced in the open Court on 23/08/2023 Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: /08/2023 Prabhat