VIJAY BAG SINGH RAJPUROHIT, MUMBAI V. ASST. COMMISSIONER OF INCOME TAX, CPC , BENGALURU

ITA 591/MUM/2023

AI Insights

The case involves Vijay Bag Singh Rajpurohit, the appellant, contesting an order by the Assistant Commissioner of Income Tax, CPC Bengaluru, which disallowed deductions for employees' contributions to PF/ESIC due to late deposits. The disallowance was initially made under section 143(1) of the Income Tax Act, 1961, and upheld by the Commissioner of Income Tax Appeals at the National Faceless Appeal Centre, Delhi. The appellant argued that the contributions were made before the due date of filing the return and cited a jurisdictional ITAT decision and a Supreme Court decision that supported his position. However, the ITAT Mumbai, referencing the Supreme Court's decision in Checkmate Services Pvt. Ltd., upheld the disallowance and restored the matter to the AO for re-evaluation in line with the Supreme Court's ruling.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130193 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 26-04-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 26-02-2023
• Other Referred Cases: Checkmate Services Pvt. Ltd. Vs. CIT-1 Civil Appeal No. 2833 of 2016, PR Packaging Service ITA No 2379/MUM/2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 37; 143(3); 143(1); 44AB

Judgement Text

P a g e | 1 ITA No.591/Mum/2023 Vijay Bag Singh Rajpurohit Vs. ACIT, CPC Bengaluru IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No. 591/Mum/2023 (A.Y.2020-21) Vijay Bag Singh Rajpurohit Plot No. 4, Vikas Bunglow Behind Bahari Petrol Pump, Sion, Trombay Road Chembur, Mumbai 400071 Vs. Asst. Commissioner of Income Tax, CPC Bengaluru 560100 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: ADQPR7848L Appellant .. Respondent Appellant by : Vipul Shriyan Respondent by : Vranda U Matkari Date of Hearing 27.04.2023 Date of Pronouncement 28.04.2023 आदेश / O R D E R Per Amarjit Singh (AM): The present appeal filed by the assesse is directed against the order passed by the NFAC, Delhi dated 27.12.2022 for A.Y. 2020-21. The assesse has raised the following grounds before us: “1. On the facts and circumstances of the case and in law the Commissioner of Income Appeals National Faceless Appeal Centre, (Ld CIT(A)) erred in upholding disallowance under section 36(1)(va) of the Income tax Act, 1001 (the Act) by CPC, Bengaluru under intimation u/s 143(1) of the Act in respect of employees contribution made to the provided fund and other funds which was paid after the due date prescribed under the respective law but before the end of the Financial year and due date of filling return of income is covered u/s 430 2. On the facts and circumstances of the case and in law the Ld. CITA erred in noting that the hearing Notices were Remained uncompiled while the Appellant had uploaded request for adjournment against Notice dated P a g e | 2 ITA No.591/Mum/2023 Vijay Bag Singh Rajpurohit Vs. ACIT, CPC Bengaluru 01 12 2022 and had duly filed Written Submission on 20 12 2022 with all supporting with Acknowledgement Number 854295551201222 against 2 Notice dated 15.12.2022 3. The Ld CIT(A) failed to consider the submission of the Appellant wherein it was submitted that the Jurisdictional Honable ITAT Mumbai decision dated 07.12.2022 in case of PR Packaging Service ITA No 2379/MUM/2022 which discussed the Supreme Court decision of Checkmate Service Pvt Ltd, is squarely covered in the Appellant's facts as the issue in hand is vide intimation u's 143(1) and not of assessment u/s 143(3) 4. Without prejudice to the above, in the facts and circumstances of the case and in law, the Ld CIT(A) erred in upholding disallowance u/s 36(1)(va) without considering that the employees contribution made to the PF fund and ESIC fund were debatable at that point in time, so these disallowance are not covered under the ambit of provision of section 143(1) of the Act and hence the no adjustment can be made by intimation u/s 143(1) 5. Without prejudice to the above, the Ld CIT(A) erred in upholding disallowance u/s 36(1)(va), as there was no remark in Tax Audit Report u/s 44AB for disallowance of employees contribution to PF/ESIC funds, as it was only reporting of the due date and date of payment, which notes that the date of payment is before the due date of filing the return. 6. Without prejudice to the above, the said payment of PF/ESIC and other funds, should be allowed u/s 37 as business expenses being wholly incurred for the business of the Appellant 7. The Appellant prays that it may be allowed to add, alter or amend the above grounds of appeal and to make detailed submissions at the time of appeal.” 2. The fact in brief is that the CPC Banglore found that assessee has not deposited the employee’s contribution towards PF/ESIC to the amount of Rs.3,59,259/- to the government account within the due date as prescribed in PF/ESIC Act. Therefore, the CPC has made adjustment u/s 143(1) of the Act and disallowed the impugned amount on account of late deposit of employees contribution towards PF/ESIC u/s 36(1)(va) r.w.s 2(24)(x) of the Act to the government account beyond the due date as prescribed in the PF/ESIC Act. 3. The assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. P a g e | 3 ITA No.591/Mum/2023 Vijay Bag Singh Rajpurohit Vs. ACIT, CPC Bengaluru 4. Heard both the sides and perused the material on record. The Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT-1 Civil Appeal No. 2833 of 2016 dated 12.10.2022 held that if the employer did not deposit the amount towards employee’s contribution on or before the due date as prescribed in the EPF/ESIC the assessee was not entitled to the deduction. 5. We consider that the case referred by the assessee is of no help in view of the judgment of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT-1 Civil Appeal No. 2833 of 2016 dated 12.10.2022. The Hon’ble Supreme Court by the decision referred as supra set at rest the entire controversy wherein it is held that employer’s have to deposit he employee’s contribution towards PF/ESIC on or before the due date prescribed in the respective law for availing deduction. It is undisputed fact that in the case of the assessee he has not made any suo moto disallowance for not depositing the PF amount to the government account within the due date as prescribed in PF/ESIC Act. We consider that as per the judgment of the Hon’ble Supreme Court referred supra it is essential condition for allowing the impugned deduction that such amounts are deposited within the due date as prescribed in the specified Act. Therefore, following the decision of Hon’ble Supreme Court as supra we restore this issue to the file of the AO for deciding afresh in accordance with decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT -1 Civil Appeal No. 2833 of 2016 dated 12.10.2022. Therefore, the appeal filed by the assessee is treated as allowed for statistical purpose. 6. In the result, the appeal of the assesse is allowed for statistical purpose. P a g e | 4 ITA No.591/Mum/2023 Vijay Bag Singh Rajpurohit Vs. ACIT, CPC Bengaluru Order pronounced in the open court on 28.04.2023 Sd/- Sd/- (Sandeep Singh Karhail) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 28.04.2023 Rohit: PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.