Harshal Subhash Nahar, Aurangabad V. The Assistant Commissioner of Income Tax, Circle-1, Aurangabad

ITA 298/PUN/2023

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The case involves Harshal Subhash Nahar, the appellant, contesting the disallowance of Rs.30,95,000 by the Assistant Commissioner of Income-tax, Circle 1, Aurangabad, due to late deposit of employees' contributions to PF/ESI for the assessment year 2019-20. The primary legal issue was whether the CIT(A) was justified in confirming the disallowance made by the CPC, Bangalore. The Tribunal examined the provisions under Section 36(1)(va) of the Income-tax Act, 1961, and referenced the Supreme Court's decision in Checkmate Services P. Ltd., which clarified that such contributions must be deposited within the statutory due dates to qualify for deductions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132919 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-05-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 14-03-2023
• Other Referred Cases: Checkmate Services P. Ltd. in Civil Appeal No. 2833 of 2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(1)

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.298/PUN/2023 ननधाारण वषा / Assessment Year : 2019-20 Harshal Subhash Nahar 10 Manisha Colony, Behind Session Court, Adalat Road, Aurangabad – 431005 PAN: AFCPN7870A .......अपीलाथी / Appellant बनाम / V/s. The Asst. Commissioner of Income-tax, Circle 1, Aurangabad ......प्रत्यथी / Respondent Assessee by : Shri S.N. Puranik Revenue by : Shri Ramnath P Murkunde सुनवाई की तारीख / Date of Hearing : 03-05-2023 घोषणा की तारीख / Date of Pronouncement : 04-05-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 25-01-2023 passed by the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] for assessment year 2019-20. 2 ITA No.298/PUN/2023, A.Y. 2019-20 2. The only issue is to be decided is as to whether the CIT(A) justified in confirming the disallowance made by the CPC, Bangalore on account of delay in depositing employees‟ contribution to PF/ESI in the facts and circumstances of the case. 3. We note that the AO, CPC disallowed Rs.30,95,000/- u/s 36(1)(va) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) vide intimation u/s 143(1) of the Act. Having aggrieved, the assessee preferred an appeal before the CIT(A). The assessee contended that the assessee is entitled to claim deduction if the employee‟s contribution is paid before due dates of filing return of income. The CIT(A) on an examination of Tax Audit Report held that the assessee did not deposit an amount of Rs.30,95,000/- which is employee‟s contribution towards PF/ESI before the due date under the respective Acts and confirmed the disallowance made by the CPC, Bangalore for delay in depositing the said employee‟s contribution before due dates concerning the relevant Acts. The ld. DR placed on record the decision of Hon‟ble Supreme Court in batch of the appeals, lead case being Checkmate Services P. Ltd. in Civil Appeal No. 2833 of 2016 and submitted that the assessee is not entitled to claim deduction if the employee‟s contribution is not paid within due dates of respective statutes. On careful reading of the said decision of Hon‟ble Supreme Court held that Section 2(24)(x) deems amount received from the employees as income and the amounts retained by the employer from out of the employee‟s income by way of deduction etc. were treated as income in the hands of the 3 ITA No.298/PUN/2023, A.Y. 2019-20 employer (assessee). Further, it held unless the conditions spelt by Explanation to section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date of respective statutes, the assessee is not entitled to claim benefit of deduction from the total income. Therefore, in our opinion, essential condition for claiming such deduction if such amounts are deposited on or before due date of respective statutes. It is evident from the impugned order that the assessee deposited the employee‟s contribution to PF/ESI after the prescribed due date of relevant Act which is not disputed by the ld. AR. Therefore, following the decision of Hon‟ble Supreme Court in the case of Checkmate Services P. Ltd. (supra) we find no infirmity in the order of CIT(A), NFAC, Delhi in holding the assessee is not entitled to claim deduction for its failure to deposit employee‟s contribution before due date prescribed under the relevant statutes. Thus, the grounds raised by the assessee are fails and it is dismissed. 4. In the result, the appeal of assessee is dismissed. Order pronounced in the open court on 4 th May, 2023. Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ददनांक / Dated : 4 th May, 2023. GCVSR 4 ITA No.298/PUN/2023, A.Y. 2019-20 आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : 1. अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The concerned CIT, Pune. 4. नवभागीय प्रनतनननध, आयकर अपीलीय अनधकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गार्ा फ़ाइल / Guard File./नपत प्रनत// True Copy// आदेशानुसार / BY ORDER, //True Copy// वरिष्ठ निजी सनिव / Sr. Private Secretary आयकि अपीलीय अनिकिण ,पुणे / ITAT, Pune