Ahspak Gundumia Agaspure, Solapur V. Assistant Commissioner of Income-Tax, Circle -1, Solapur

ITA 927/PUN/2022

AI Insights

The case involves two appeals by Mr. Ashpak Gundumia Agaspure against the orders of the NFAC for the assessment years 2018-19 and 2019-20. The primary issue was the disallowance of deductions for employee's contributions to PF/ESI, which were not deposited by the due dates prescribed under the relevant statutes. The Tribunal consolidated the appeals due to the similarity in issues and facts. The Tribunal found that the contributions were indeed deposited late, and based on the Supreme Court's decision in Checkmate Services P. Ltd., upheld the disallowance of the deductions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132957 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-02-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 20-12-2022
• Other Referred Cases: Checkmate Services P. Ltd. in Civil Appeal No. 2833 of 2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.927 & 928/PUN/2022 धििाारण वर्ा / Assessment Years : 2018-19 & 2019-20 Mr. Ashpak Gundumia Agaspure, 40/B, North Sadar Bazar, Samarth Nagar, Solapur-413003 PAN : AFIPA4871Q ......अपीलार्थी / Appellant बिाम / V/s. ACIT, Circle – 1, Solapur ......प्रत्यर्थी / Respondent Assessee by : Shri C.V. Deshpande Revenue by : Shri Ramnath P. Murkunde सुनवाई की तारीख / Date of Hearing : 07-02-2023 घोषणा की तारीख / Date of Pronouncement : 09-02-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : These two appeals by the assessee against the separate order dated 27-09-2021 and 26-11-2021 passed by the National Faceless Appeal Centre (“NFAC”), Delhi for assessment years 2018-19 and 2019-20. 2. Since, the issues raised in both the appeals are similar basing on the same identical facts, we proceed to hear both the appeals together and to pass a consolidated order for the sake of convenience. 2 ITA Nos. 927 & 928/PUN/2022, A.Ys. 2018-19 & 2019-20 3. First, we shall take up appeal in ITA No. 927/PUN/2022 for A.Y. 2018-19. 4. We find that this appeal was filed with a delay of 330 days. To condone the said delay, the assessee filed an application dated 14-12-2022 explaining the reasons for delay. On perusal of the same upon hearing both the parties, the delay of 330 days are condoned. 5. The only issue is to be decided is as to whether the CIT(A), NFAC, Delhi justified in confirming the addition made by the CPC u/s. 36(1)(va) of the Act. 6. Heard both the parties and perused the material available on record. We note that the assessee is an individual filed return of income on 28-10- 2018. The CPC, Bangalore disallowed an amount of Rs.36,85,802/- for not depositing the employee’s contribution of PF/ESI before prescribed due dates under the respective Act. Having aggrieved, the assessee preferred an appeal before the CIT(A). The assessee contended that the assessee is entitled to claim deduction if the employee’s contribution is paid before due dates of filing return of income. The CIT(A) on an examination of Tax Audit Report held that the assessee did not deposit an amount of Rs.36,85,802/- which is employee’s contribution towards PF/ESI before the due date under the respective Act and confirmed the disallowance made by the CPC, Bangalore for delay in depositing the said employee’s contribution before due dates concerning the relevant Act. The ld. DR placed on record the decision of Hon’ble Supreme Court in batch of the appeals, lead case being Checkmate Services P. Ltd. in Civil Appeal No. 2833 of 2016 and submitted that the assessee is not entitled to claim deduction if the employee’s 3 ITA Nos. 927 & 928/PUN/2022, A.Ys. 2018-19 & 2019-20 contribution is not paid within due dates of respective statutes. On careful reading of the said decision of Hon’ble Supreme Court held that Section 2(24)(x) deems amount received from the employees as income and the amounts retained by the employer from out of the employee’s income by way of deduction etc. were treated as income in the hands of the employer (assessee). Further, it held unless the conditions spelt by Explanation to section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date of respective statutes, the assessee is not entitled to claim benefit of deduction from the total income. Therefore, in our opinion, essential condition for claiming such deduction if such amounts are deposited on or before due date of respective statutes. It is evident from the impugned order that the assessee deposited the employee’s contribution to PF/ESI after the prescribed due date of relevant Act which is not disputed by the ld. AR. Therefore, following the decision of Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. (supra) we find no infirmity in the order of CIT(A), NFAC, Delhi in holding the assessee is not entitled to claim deduction for its failure to deposit employee’s contribution before due date prescribed under the relevant statutes. Thus, the ground raised by the assessee is fails and it is dismissed. 7. In the result, the appeal of assessee is dismissed. ITA No. 928/PUN/2022, A.Y. 2019-20. 8. We find that the issues raised in the appeal and the facts in ITA No.928/PUN/2022 are identical to ITA No.927/PUN/2022 except the variance in amount. Since, the facts in ITA No.928/PUN/2022 are similar 4 ITA Nos. 927 & 928/PUN/2022, A.Ys. 2018-19 & 2019-20 to ITA No.927/PUN/2022, the findings given by us while deciding the appeal of assessee in ITA No.927/PUN/2022 would mutatis mutandis apply to ITA No.928/PUN/2022, as well. Accordingly, the appeal of assessee is dismissed. 9. To sum up, both the appeals of assessee are dismissed. Order pronounced in the open court on 09 th February, 2023. Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 09 th February, 2023. रदव आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A) concerned. 4. The Pr. CIT concerned. 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune