M/S. MUSTANG ENTERPRISES, MUM V. ITO, CIR-20(1), MUM

ITA 71/MUM/2023

AI Insights

The case involves M/s. Mustang Enterprises, a partnership firm engaged in manufacturing socks, which appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre. The dispute centered on the disallowance of Rs.3,87,955, which represented employees' contributions to PF & ESIC that were deposited after the statutory due date but before the filing of the income tax return. The Assessing Officer had initially disallowed these contributions under section 36(1)(va) of the Income Tax Act, 1961, and this decision was upheld by the CIT(A). The Tribunal's decision was influenced by the Supreme Court's ruling in Checkmate Services (P.) Ltd. vs. CIT, which established that such delayed payments are not deductible.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125787 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 09-01-2023
• Other Referred Cases: Checkmate Services (P.) Ltd. vs. CIT [2002] 143 taxmann.com 178 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI B R BASKARAN, AM AND MS. KAVITHA RAJAGOPAL, JM IT A N o. 71 /M u m/ 2 02 3 ( A s s e ss me nt Y ea r: 20 1 7- 18 ) M/s. Mustang Enterprises 219 Milan Industrial Estate, T J Marg, Cotton Green, Mumbai-400 033 V s. ITO, Circle-20(1) Mumbai P A N / G I R N o. AA A F M 4887 H (Appellant) : (Respondent) Assessee by : Ms. Rupal Shah Revenue by : Smt. Mahita Nair D a te o f H e a r i n g : 16.03.2023 D ate of P ro n ou n ce me n t : 13.06.2023 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short), passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18. 2. The assessee has challenged the solitary ground of disallowance amounting to Rs.3,87,955/- on employees contribution towards PF & ESIC deposited after the due date prescribed under the relevant Act but before filing of the returns u/s. 139(1) of the Act. 3. The brief facts of the case are that the assessee is a partnership firm engaged in the business of manufacturing of various types of socks and allied accessories. The assessee had filed its return of income dated 30.10.2017, declaring total income at Rs.82,38,650/-. 2 ITA No. 7 1 / M u m / 2 0 2 3 ( A . Y . 2 0 1 7 - 1 8 ) M/s. Mustang Enterprises vs. ITO The A.O. / CPC made a disallowance u/s. 36(1)(va) of the Act as being employees contribution towards PF & ESIC paid by the assessee after the due date prescribed under the relevant Acts but before filing of the return of income. 4. Aggrieved, the assessee was in appeal before the ld. CIT(A) who confirmed the impugned addition made by the A.O/CPC by placing reliance on the decision of the Hon'ble Apex Court in the case of Checkmate Services (P.) Ltd. vs. CIT [2002] 143 taxmann.com 178 (SC). 5. The assessee is in appeal before us, challenging the impugned order. 6. We have heard the rival submissions and perused the materials available on record. It is evident that the assessee has deposited the impugned addition made u/s. 36(1)(va) of the Act being the employees contribution towards PF & ESIC after the due date prescribed under the relevant Acts nevertheless paid before the due date for filing of the returns u/s. 139(1) of the Act. All the grounds raised by the assessee pertain to the impugned disallowance towards delayed payment of PF & ESIC. Pertinently all these issues raised by the assessee in its ground of appeals are covered by the decision of the Hon'ble Apex Court in the case of Checkmate Services (P.) Ltd. (supra), wherein it was held that the delayed payment of employees contribution towards PF & ESIC will not be an allowable deduction and that section 43B of the Act does not cover employees contribution and the same relates to only employer’s contribution towards PF & ESIC. Since this issue has been settled by the highest forums, it becomes the law of the land. Therefore, we find no infirmity in the order of the ld. CIT(A) in relying on the 3 ITA No. 7 1 / M u m / 2 0 2 3 ( A . Y . 2 0 1 7 - 1 8 ) M/s. Mustang Enterprises vs. ITO proposition laid down by the Hon'ble Apex Court in the case of Checkmate Services (P.) Ltd. (supra). Hence, the grounds raised by the assessee are dismissed. 7. In the result, the appeal filed the assessee is dismissed. Order pronounced in the open court on 13.06.2023 Sd/- Sd/- (B R Baskaran) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : 13.06.2023 Roshani , Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai