Radheya Machining Ltd., Pune V. Deputy Commissioner of Income-Tax, Circle -1, , Aurangabad

ITA 730/PUN/2022

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Radheya Machining Ltd. appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs.27,33,160 to their income for the Assessment Year 2018-19. This amount represented the Employees' Contribution to Provident Fund and ESIC, which was not deposited within the statutory due dates. The Tribunal considered the Supreme Court's ruling in Checkmate Services (P.) Ltd., which established that employees' contributions deducted from their income must be deposited by the due dates specified by law to be eligible for deduction. The Tribunal found that the Assessee admitted in the Audit Report that the payment was delayed, thus upholding the disallowance.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134339 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-01-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 05-10-2022
• Other Referred Cases: Checkmate Services (P.) Ltd. Vs. Commissioner of Income-tax-1
• Laws Referred To: Income Tax Act, 1961, Employees' Provident Funds and Miscellaneous Provisions Act, 1952
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Reasonable cause; Set aside
• Section: 143(1)

Judgement Text

आयकर अपीलीय अिधकरण “बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.730/PUN/2022 िनधाᭅरण वषᭅ / Assessment Year : 2018-19 Radheya Machining Ltd., S.No.1260/62, Sanaswadi, Tal. Shirur, Pune – 412210. PAN: AABCR 7133 F V s The DCIT, Income Tax (CPC), DCIT, Circle-1, Aurangabad. Appellant/ Assessee Respondent /Revenue Assessee by None. Revenue by Shri M.G.Jasnani – DR Date of hearing 12/01/2023 Date of pronouncement 17/01/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], Delhi dated 10.08.2022 emanating from the order under section 143(1)(a)(iv) of the I.T.Act, 1961 passed by DCIT(CPC) for the A.Y.2018-19. The Assessee has raised the following grounds of appeal: “1. On the facts and circumstances of the case and in the law, the learned CIT(A), erred in confirming the addition of Rs.27,33,160/-, the payment of Employee’s share of PF / ESI, on the ground that the appeal was not filed within the stipulated timeline. 2. On the facts and circumstances of the case and in the law, the learned CIT(A) has erred in rejecting the appellant’s request for delay condonation, without appreciating the fact that there was a ‘reasonable cause’ for delay in filing the appeal against Intimation u/s 143(1) dated 15/07/2019 and therefore it is requested to ITA No.730/PUN/2022 Radheya Machining Ltd., [A] 2 condone the delay of 372 days caused in filing appeal and addition of Rs.27,33,160/- made on account of rejecting condolence petition may be deleted and to set aside this case back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assesse. 3. The learned CIT (A) has erred in law as well as on fact by not interpreting the word reasonable and sufficient cause in this regard. 4. The appellant craves leaves to add/ modify/amend /delete all/ any of the grounds of appeal and lead evidence/additional evidences.” 2. The only issue for our consideration is disallowance on account of Employees Contribution to Provident Fund i.e.PF/ESIC of Rs.27,33,160/- which was paid beyond the due dates mentioned in the relevant statute. The Ground No.1 to 3 are related to the same issue. 3. At the outset of hearing, no one appeared on behalf of the assessee. 4. The ld.Departmental Representaitve(ld.DR) for the Revenue relied on the order of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs. Commissioner of Income-tax-1. 5. We have heard both the parties and perused the records. The only issue for our consideration is disallowance of Rs.27,33,160/- on account of Employees Contribution to PF/ESIC which was paid beyond the due dates mentioned in the relevant statute. All the four grounds are related to the same issue. It is an admitted fact that in ITA No.730/PUN/2022 Radheya Machining Ltd., [A] 3 the Audit Report it is mentioned that amount of Rs.27,33,160/- was paid beyond the due date mentioned in the respective statute. This amount is Employees Contribution to Provident Fund and ESIC. 6. The issue of delayed payment of employee’s contribution of Provident fund & ESIC has been decided by Hon’ble SC in the case of Checkmate Services (P.) Ltd. Vs. Commissioner of Income- tax-1 vide order dated October 12, 2022 as under : Quote, “ That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees’ contributions- which are deducted from their income. They are not part of the assessee employer’s income, nor are they heads of deduction per se in the form of statutory pay out. They are others’ income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. ” Unquote. 6.1 Thus, the Hon’ble Supreme Court has held that the Employee’s Contribution towards Provident Fund & ESIC has to be deposited before the due date mentioned in the respective statute. In this case it is an admitted position by the assessee in the Audit Report that the amount was not deposited before the due date mentioned in The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Hence, the impugned amount has been rightly disallowed by the AO. Accordingly, the Grounds of appeal raised by the assessee are dismissed. ITA No.730/PUN/2022 Radheya Machining Ltd., [A] 4 7. In the result, appeal of the Assessee is Dismissed. Order pronounced in the open Court on 17 th January, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 17 th Jan, 2023/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.