Axiom Energy Conversion Limited, Hyderabad V. DCIT, Circle-1(1), Hyderabad

ITA 33/Hyd/2023

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Axiom Energy Conversion Ltd, a private limited company engaged in manufacturing SMPS Adapters, appealed against the order of the CIT (A)-NFAC which sustained an addition of Rs. 17,55,091 to their income for the assessment year 2019-2020. This addition was due to the delayed payment of employees' contributions to PF & ESI. The company argued that the payments were made before the due date of filing the return, but this was rejected by the CIT (A)-NFAC. The Tribunal, referencing a Supreme Court decision, upheld the CIT (A)'s decision, stating that the contributions not paid within the statutory due dates are not deductible under the I.T. Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128962 (ITAT-HYDERABAD)
• Duration Of Justice: 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 22-01-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 08-01-2023
• Other Referred Cases: Checkmate Services (P) Ltd vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B

Judgement Text

ITA No 33 of 2023 Axiom Energy Conversion Ltd Hyderabad Page 1 of 3 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member ITA No.33/Hyd/2023 Assessment Year: 2019-2020 Axiom Energy Conversion Ltd, Hyderabad PAN:AACCA0120E Vs. Dy. C.I.T. Circle 1(1) Hyderabad (Appellant) (Respondent) Assessee by : Shri M.V. Anil Kumar, CA Revenue by: Shri Kumar Aditya, DR Date of hearing: 23/01/2023 Date of pronouncement: 24/01/2023 ORDER Per R.K. Panda, A.M This appeal filed by the assessee is directed against the order dated 11/11/2022 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2019-2020. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A)-NFAC in sustaining the addition of Rs.17,55,091/- on account of delayed payment of employees’ contribution to PF & ESI. 3. Facts of the case, in brief, are that the assessee is a private limited company engaged in the business of manufacture of SMPS Adapters for water purifiers, Set top Boxes and mobile ITA No 33 of 2023 Axiom Energy Conversion Ltd Hyderabad Page 2 of 3 chargers. It filed its return of income on 30.10.2019 declaring total income of Rs.33,46,793/-. The CPC Bengaluru in the intimation issued u/s 143(1)(a)(iv) of the I.T. Act proposed addition of Rs. 17,55,091/- being delayed payment of Employees Contribution to PF & ESIC. 4. In appeal, the learned CIT (A)-NFAC rejected the contention of the assessee that such payments were made before the due date of filing of the return. The CIT (A)-NFAC accordingly dismissed the appeal filed by the assessee. 5. Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal. 6. We have heard the rival arguments made by both the sides and perused the record. We find the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd vs. CIT reported in 143 Taxmann.com 178 has held that the employees’ contribution to PF & ESI to the extent it is not paid within due date prescribed under the PF Act is not allowable u/s 36(1)(va) of the I.T. Act. The Hon'ble Supreme Court has further held that the provisions of section 43B would not be applied to the provisions of section 36(1)(va) of the Act in respect of Employees’ contribution. Since the assessee in the instant case admittedly not paid the employees’ contribution to PF & ESI before the statutory due dates prescribed under the said Act, therefore, we are of the considered opinion that the CIT(A)-NFAC was fully justified in sustaining the addition made by the Assessing Officer. The various decisions relied on by the learned Counsel for the assessee are distinguishable and not applicable to the facts of the present case in view of the binding decision of the ITA No 33 of 2023 Axiom Energy Conversion Ltd Hyderabad Page 3 of 3 Hon'ble Supreme Court cited (Supra). In view of the above discussion, we uphold the order of the learned CIT (A)-NFAC in sustaining the addition made by the CPC Bengaluru in the intimation u/s 143(1)(a)(iv) of the I.T. Act and the grounds raised by the assessee are dismissed. 7. In the result, appeal filed by the assessee is dismissed. Order pronounced in the Open Court on 24 th January, 2023. Sd/- Sd/- (LALIET KUMAR) JUDICIAL MEMBER (R.K. PANDA) ACCOUNTANT MEMBER Hyderabad, dated 24 th January, 2023. Vinodan/sps Copy to: S.No Addresses 1 Axiom Energy Conversion Ltd C/o M.Anandam & Co. C.A, Flat No.7A Surya Towers, SP Road, Secunderabad 500003 2 Dy. CIT, Circle 1(1) Hyderabad 3 CIT (A)-NFAC, Delhi 4 Pr. CIT-, Hyderabad 5 DR, ITAT Hyderabad Benches 6 Guard File By Order