MGI Infra Pvt Ltd, New Delhi V. ACIT Circle-16(2), New Delhi

ITA 6500/DEL/2019

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MGI Infra Pvt. Ltd., engaged in infrastructure development, filed an appeal against the order of the CIT(A)-6, Delhi, which partially granted relief but upheld the disallowance of Rs. 4,70,491 on account of delayed deposit of employees' contributions to PF and ESI. The AO had initially disallowed these amounts, citing the delay in deposit as per the statutory deadlines. The Tribunal, referencing the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT, supported the lower authorities' decisions, emphasizing that such contributions are only deductible if deposited within the prescribed deadlines.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122176 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 14-12-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 01-08-2019
• Other Referred Cases: Checkmate Services Pvt. Ltd. vs. CIT & others (2022) 448 ITR 518 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “E”: DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER And SHRI NARENDER KUMAR CHOUDHARY, JUDICIAL MEMBER ITA.No.6500/Del./2019 Assessment Year: 2016-17 MGI Infra Pvt. Ltd., 7/18, Nehru Enclave, New Delhi 110019 PAN : AAHCM4708M [vs. The ACIT, Circle 16(2) Delhi 110002 (Appellant) (Respondent) For Assessee : -None- For Revenue : Shri Jeetender Chand, Sr. DR Date of Hearing : 15.12.2022 Date of Pronouncement : .01.2023 ORDER PER ANIL CHATURVEDI, A.M. This appeal by assessee has been directed against the order of the Ld. CIT(A)-6, Delhi, dated 28.05.2019, relating to the A.Y. 2016-17. 2. The relevant facts as culled out from the material on record are as under : 2.1. The assessee is a company stated to be engaged in the business of infrastructure development. Assessee 2 ITA.No.6500/Del./2019 MGI Infra Pvt.Ltd. electronically filed its return of income for A.Y. 2016-17 on 30.09.2016 declaring total income of Rs.94,99,600/-. The case of the assessee was selected for scrutiny and thereafter assessment was framed u/s. 143(3) vide order dated 18.12.2018 and the total income was determined at Rs. 1,05,57,730/-. 2.2. Aggrieved by the order of the AO the assessee carried the matter before the Ld. CIT(A), who vide order dated 28.05.2019 in Appeal No. CIT(A)-Delhi- 6/10238/2018-19 granted partial relief to the assessee. 3. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal by raising the following grounds : 1. On the facts and in the circumstances of the case the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of law and of facts. 2. Action of the Ld. CIT(A) in not allowing the claim made by the appellant Company on account of 3 ITA.No.6500/Del./2019 MGI Infra Pvt.Ltd. Disallowance of employees contribution to Provident Fund/Employee State Insurance Funds amounting to Rs. 4,70,491/- is unjust and against the facts and circumstances of the case. 4. On the date of hearing learned counsel for the assessee has sought adjournment. However considering the fact that the issue raised in the present appeal is covered by the decision of Hon’ble Apex Court, we reject the adjournment request and proceed to dispose of the appeal after considering the submissions of the learned DR and material on record. 5. During the course of assessment proceeding AO noticed that there was delay in depositing employee’s contribution pertaining to PF & ESIC for various months, the details of which are listed at page 2 and 3 of the order. AO was of the view that on account of delay in deposit of employees contribution to PF & ESIC the amounts cannot be allowed as deduction. He therefore by invoking provision of 36(1)(va) r.w.s 2(24)(x) disallowed of Rs. 4,70,491/-. 4 ITA.No.6500/Del./2019 MGI Infra Pvt.Ltd. 6. Aggrieved by the order AO, assessee carried the before Ld. CIT(A) who upheld the action of A.O. 7. Aggrieved by the order Ld. CIT(A), assessee is now before us. 8. Before us learned DR supported the order of lower authorities and further submitted that the addition made by AO needs to be upheld in view of the recent decision of Hon’ble Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. and others vs. CIT & others (2022) 448 ITR 518 (SC). 9. We have heard the learned DR and perused the material available on record. The issue in the present ground is with respect to the disallowance of delayed deposit of employee’s contribution of PF & ESI. We find that Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra) has held that the contribution by the employees to the relevant funds is the employer’s income u/s 2(24)(x) of the Act and the deduction for the same can be allowed only if such amount is deposited in the employee’s account in the relevant fund before the date stipulated under the respective Acts. Thus the deduction u/s 36(1)(va) of the Act can be allowed only if the employees’ 5 ITA.No.6500/Del./2019 MGI Infra Pvt.Ltd. share in the relevant funds is deposited by the employer before the due date stipulated in respective Acts. 10. In the present case, the fact that the employees contribution has been deposited by the assessee after the due date stipulated for respective months is not in dispute. In such a situation we are of the view that the decision of Hon’ble Apex Court in the case of Checkmate Services (Supra) is squarely applicable. We find no reason to interfere with the order of CIT(A) and thus the grounds of assessee are dismissed. 11. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 17.01.2023. Sd/- Sd/- [N.K. CHOUDHARY] [ANIL CHATURVEDI] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi, Dated 17 th Jan, 2023 NV/- Copy to 1. The appellant 2. The respondent 3. Ld. CIT(A) concerned 4. CIT concerned 5. DR ITAT “E” Bench, Delhi 6. Guard File 6 ITA.No.6500/Del./2019 MGI Infra Pvt.Ltd. //By Order// Assistant Registrar, ITAT, Delhi Benches, Delhi.