Manoj Kumar, Gurgaon V. ACIT, Circle-62(1), New Delhi

ITA 978/DEL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2880 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 07-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business expenditure; TDS
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: C NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.978/DEL./2018 ASSESSMENT YEAR: 2014-15 SHRI MANOJ KUMAR, PROP. BALAJI ENGINEERS & CONSULTANTS, HOUSE NO. 9, SECTOR-9, GURGAON VS. ACIT, CIRCLE-62(1), NEW DELHI PAN :AGQPK1786P (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 30/11/2017 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-20, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2014-15. THE LD. CIT(A) ON 10/12/2017 ISSUED A CORRIGENDUM TO THE ORDER DATED 30/11/2017, WHEREIN PARA 4.4 WAS RECTIFIED. THE GROUNDS RAISED BY THE ASSESSEE A RE REPRODUCED AS UNDER: APPELLANT BY SHRI G.S. KOCHAR, CA RESPONDENT BY SHRI BHOPAL SINGH, SR.DR DATE OF HEARING 17.02.2021 DATE OF PRONOUNCEMENT 02.03.2021 2 ITA NO.978/DEL./2018 1. THAT THE LEARNED CIT(A) ERRED IN PARTLY SUSTAINI NG THE ADDITION OF RS.5,00,000 OUT OF RS.10,00,000 MADE BY THE AO ON A DHOC AND PRESUMPTIVE BASIS, WITHOUT FINDING ANY SPECIFIC PAY MENT TO BE NON-GENUINE OR NOT FOR THE PURPOSE OF BUSINESS OF T HE ASSESSEE. 2. THAT THE LEARNED CIT(A) ERRED IN UPHOLDING THE ORDER OF THE AO DISALLOWING A SUM OF RS.6,12,210/- BEING EMPLOYEES CONTRIBUTION TO PF AND ESI, WHICH WERE DEPOSITED BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME, BY RELYING ON A JUDGMENT OF T HE HONBLE GUJARAT HIGH COURT, DISREGARDING THE JUDGMENT OF TH E JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT VS. AIMIL LTD. & ORS., WHICH HAD BEEN CITED BY THE APPELLANT. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE WAS ENGAGED IN THE BUSINESS OF SUPPLY OF MANPOWER TO VA RIOUS COMPANIES IN THE NAME OF PROPRIETARY CONCERN, NAMEL Y, M/S BALAJI ENGINEERS AND CONSULTANTS. FOR THE YEAR UNDE R CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ON 12/10/2014, DECLARING TOTAL INCOME OF 41,01,660/-. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS SELECTED FOR SC RUTINY AND STATUTORY NOTICES UNDER INCOME-TAX ACT, 1961 (IN SH ORT THE ACT) WERE ISSUED AND COMPLIED WITH. THE SCRUTINY ASSESSM ENT WAS COMPLETED ON 06/12/2016 UNDER SECTION 143(3) OF THE ACT AFTER MAKING CERTAIN ADDITION/DISALLOWANCES. THE LD. CIT( A) ALLOWED PART RELIEF. AGGRIEVED WITH THE ADDITION SUSTAINED, THE ASSESSEE IS BEFORE THE INCOME TAX APPELLATE TRIBUNAL (IN SHORT THE TRIBUNAL) RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. BEFORE US, THE PARTIES APPEARED THROUGH VIDEO CONF ERENCING FACILITY AND FILED PAPER-BOOK ELECTRONICALLY. 4. IN GROUND NO. 1, THE ASSESSEE IS AGGRIEVED WITH AD DITION OF 5 LAKH SUSTAINED BY THE LD. CIT(A) OUT OF THE ADDIT ION OF 10 LAKH MADE BY THE ASSESSING OFFICER OUT OF SALARY AND WAG ES EXPENSES. 3 ITA NO.978/DEL./2018 4.1 BRIEFLY STATED FACTS QUA THE ISSUE IN DISPUTE ARE THAT, IN THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE CLAIMED EXPEN SES OF 29,17,36,148/- ON ACCOUNT OF WAGES AND SALARY, HOWE VER, ON BEING ASKED BY THE ASSESSING OFFICER, THE ASSESSEE COULD NOT SUBSTANTIATE THE EXPENSES WITH ADEQUATE/SUPPORTING BILLS OR VOUCHERS. THE ASSESSING OFFICER ALSO NOTICED THAT M OST OF THE EXPENSES WERE PAID IN CASH, WHICH WERE NOT FULLY VO UCHED. ACCORDINGLY, THE ASSESSING OFFICER MADE AN AD-HOC A DDITION OF 10 LAKH TO COVER UNVERIFIABLE WAGES AND SALARY. THE LD. CIT(A) IN CORRIGENDUM DATED 10/12/2017 OBSERVED THAT SIMILAR ADDITION WERE MADE IN ASSESSMENT YEAR 2011-12 AND 2012-13, W HEREIN THE ASSESSING OFFICER ADDED 1% OF THE TOTAL DIRECT EXPE NSES, WHICH WERE FURTHER CONFIRMED BY THE LD. CIT(A), HOWEVER T HE ADDITION OF 1% WAS RESTRICTED TO 0.5% BY THE LEARNED CIT IN ASS ESSMENT YEAR 2012-13. THE LD. CIT(A) IN VIEW OF THE PAST HISTORY , RESTRICTED THE DISALLOWANCE TO 5 LAKH. 4.2 BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE ADM ITTED THAT ADDITION OF 10 LAKH WAS MADE BY THE ASSESSING OFFICER PURELY AN AD-HOC BASIS AND LD. CIT(A) HAS ALSO UPHE LD DISALLOWANCE OF 5 LAKH ON AD-HOC BASIS WITHOUT POINTING OUT ANY SPECIFIC DISCREPANCY OR ABSENCE OF BILLS OR VOUCHER AND, THEREFORE IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH C OURT IN THE CASE OF FRIENDS CLEARING AGENCY PRIVATE LIMITED VS CIT, 33 2 ITR 269 AND DECISION OF TRIBUNAL IN THE CASE OF GANAPATHI ENTERPRISES LTD., 142 ITD 118 , NO AD-HOC DISALLOWANCE COULD BE SUSTAINED. 4.3 THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE O RDER OF THE LOWER AUTHORITIES. 4 ITA NO.978/DEL./2018 4.4 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON TH E ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON REC ORD. WE FIND THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF FRIENDS CLEARING AGENCY (P) LTD. (SUPRA) HAS HELD AS UNDER: 10. HAVING PERUSED THE REASONING OF THE CIT (APPEA LS) AS EXTRACTED ABOVE AND THAT OF ITAT, WE ARE OF THE VIEW THAT THE SAID REASONING CANNOT BE SUSTAINED. THERE IS NO BASIS FOR AN AD-HO C DIS-ALLOWANCE OF RS.50,000/-. EITHER IT WAS CASE THAT EVIDENCE WA S PRODUCED OR THE EVIDENCE WAS NOT PRODUCED. THE BASIS FOR DEDUCT ION OF RS.50,000/- OUT OF A TOTAL SUM CLAIMED AMOUNTING TO RS.1,48,782/- IS NOT CLEAR. MR.SABHARWAL HAS FAIRLY POINTED OUT T HE DECISION IN THE ASSESSEE S CASE BY THE ITAT FOR THE ASSESSMENT YEAR 1989- 19 90 WHEREIN, THE ITAT HAS ALLOWED SIMILAR EXPENSES IN T OTALITY. AS A MATTER OF FACT, THE ITAT HAS ACCEPTED THE CASE OF T HE ASSESSEE THAT FOR MINOR AMOUNTS RELATING TO CONVEYANCE ETC. AND O THER BUSINESS EXPENSES, IT IS IMPRACTICAL TO HAVE VOUCHERS AND TH AT INTERNAL VOUCHERS OF THE STAFF/EMPLOYEES OF AN ORGANIZATION WILL SUFFICE. FOR THE SAID ASSESSMENT YEAR, THE AMOUNT CLAIMED TOWARD S EXPENSES WAS UNDER THE SIMILAR HEADS, THAT IS, CARTAGE, LABO UR AND SEALING EXPENSES. 4.5 FURTHER, THE TRIBUNAL THE CASE OF GANPATI ENTERPRISES LTD. (SUPRA) HAS AS UNDER: 7. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE T HROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS THE FACTS EMERGE, AO IN HIS ORDER HAS MERELY REFERRED TO EXCESSIVENESS OF EXPEN DITURE; SELF MADE VOUCHERS AND WITHOUT ASSIGNING ANY REASONS AD HOC D ISALLOWANCES HAVE BEEN MADE, WHICH IN A.Y. 2003-04 HAVE BEEN UPH ELD BY CIT(A) AND IN A.Y. 2005-06 & 2006-07 HAVE BEEN PARTLY CONF IRMED. IN OUR VIEW, IF THE BOOKS OF ASSESSEE ARE PROPERLY MAINTAI NED AND PRODUCED BEFORE AO, THE DISALLOWANCE SHALL PROCEED ON ITEMS OF EXPENDITURE, WHICH ARE NOT PROVED BY THE ASSESSEE. AD HOC DISALLOWANCE IN EVERY YEAR WITHOUT ASSIGNING ANY RE ASONS IS NOT JUSTIFIABLE. IN VIEW THEREOF, WE ARE INCLINED TO DE LETE THE AD HOC DISALLOWANCE AS UPHELD BY CIT(A). ASSESSEE'S GROUND S IN THIS BEHALF ARE ALLOWED. 4.6 WE FIND THAT THE LEARNED CIT(A) HERSELF HAS ACCEPT ED THAT THERE IS INCREASE IN PROFIT DURING THE YEAR AS COMP ARED TO PRECEDING YEAR AND ALSO THE ASSESSING OFFICER HAS N OT POINTED OUT 5 ITA NO.978/DEL./2018 ANY SPECIFIC INSTANCE OF THE DEFECT. SHE ALSO TAKEN NOTE OF THE DECISIONS CITED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. IN SUCH CIRCUMSTANCES, WHEN NO SPECIFIC DEFECT IN B ILLS OR VOUCHER HAS BEEN POINTED OF BY THE ASSESSING OFFICER, NO AD DITION ON AD- HOC BASIS CAN BE SUSTAINED IN VIEW OF THE DECISIONS ABOVE. ACCORDINGLY, WE DELETE THE ADDITION OF 5 LAKH, WHICH WAS SUSTAINED BY THE LEARNED CIT(A). THE GROUND NO. 1 O F THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 5. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED DISAL LOWANCE OF 6,12,210/- FOR LATE PAYMENT OF EMPLOYEES CONTRIBUT ION TO ESI AND PF. 5.1 IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS LISTED PAYMENTS OF 6,12,210/- FOR EMPLOYEES STATE INSURANCE (ESI) AND EMPLOYEES PROVIDENT FUND (EPF), WHICH WERE DEP OSITED IN RESPECTIVE DEPARTMENTS AFTER THE DUE DATE UNDER RES PECTIVE ENACTMENTS. THE LEARNED ASSESSING OFFICER RELYING O N THE CIRCULAR NO. 22/2015, DATED 17/12/2015 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) DISALLOWED THE PAYMENT TOWARD E SI/EPF. THE LD. CIT(A) FOLLOWING THE DECISION OF THE HONBL E GUJARAT HIGH COURT IN THE CASE OF CIT VS GUJARAT STATE ROAD TRANSPORT CORPORATION, 366 ITR 170 UPHELD THE DISALLOWANCE. WHILE DELIVERING THE ABOVE DECISION, HONBLE GUJARAT HIGH COURT HAS CONSIDERED THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF CIT VS ALOM EXTRUSIONS LTD 319 ITR 306. 5.2 BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE SUB MITTED THAT HONBLE DELHI HIGH COURT IN THE CASE OF PCIT-7 VS. PRO INTERACTIVE SERVICE (INDIA) P. LTD. IN ITA 983/2018 IN DECISION DATED 10/09/2018 HAS HELD THAT PAYMENT OF EMPLOYEES 6 ITA NO.978/DEL./2018 CONTRIBUTION OF ESI/PF MADE BEFORE DUE DATE OF FILI NG OF RETURN OF INCOME IS ALLOWABLE FOR DEDUCTION, FOLLOWING THE EA RLIER DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS A IMIL LTD. & ORS (SUPRA). 5.3 ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT H ONBLE DELHI HIGH COURT IN THEIR DETAILED DECISION IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. BHARAT HOTELS LTD. I N ITA 271 OF 2005 , DATED 06/09/2018 HAS HELD THAT EMPLOYEES CONTRIBUTION TO ESI/EPF SHOULD BE ALLOWED FOR DEDUC TION, IF PAID WITHIN THE DUE DATE STIPULATED IN RESPECT OF ENACTM ENTS. HE SUBMITTED THAT IN VIEW OF THE DETAILED DECISION, TH E FINDING OF THE HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT HOTE LS LTD. (SUPRA) SHOULD BE FOLLOWED. 5.4 WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON T HE ISSUE IN DISPUTE AND PERUSED THE RELEVANT MATERIAL ON REC ORD. THERE ARE TWO TYPES OF CONTRIBUTION TO ESI/PF WHILE MAKING PA YMENT OF SALARY/WAGES TO EMPLOYEES. FIRST CONTRIBUTION IS BY EMPLOYER. DEDUCTION OF THIS CONTRIBUTION IS GOVERNED BY THE P ROVISION OF SECTION 43B(B) OF THE ACT ON ACTUAL PAYMENT ON OR B EFORE THE DUE DATE OF THE FURNISHING OF RETURN OF INCOME. SECOND CONTRIBUTION TO ESI/PF IS BY THE EMPLOYEE. THIS CONTRIBUTION HAS BE EN TREATED AS INCOME IN THE HANDS OF THE EMPLOYER IN TERMS OF SEC TION 2(24)(X) OF THE ACT WHICH READS AS UNDER: (24) 'INCOME' INCLUDES (X) ANY SUM RECEIVED BY THE ASSESSEE FROM HIS EMPL OYEES AS CONTRIBUTIONS TO ANY PROVIDENT FUND OR SUPERANNUATI ON FUND OR ANY FUND SET UP UNDER THE PROVISIONS OF THE EMPLOYEES' STATE INSURANCE ACT, 1948 (34 OF 1948), OR ANY OTHER FUND FOR THE W ELFARE OF SUCH EMPLOYEES ; 7 ITA NO.978/DEL./2018 5.5 DEDUCTION FOR PAYMENT OF EMPLOYEES CONTRIBUTION T O THE ESI/PF IS GOVERNED BY SECTION 36(1)(IV) OF THE ACT WHICH READS AS UNDER: 36(1) THE DEDUCTION PROVIDED FOR IN FOLLOWING CLAU SES SHALL BE ALLOWED IN RESPECT OF THE MATTERS DEALT WITH THEREIN IN COMPUT ED THE INCOME REFERRED TO IN SECTION 28- (I) . (II) . (IIA) [OMITTED BY THE FIANCE ACT, 1999, W.E.F. 1-4- 200] (III) (IV) ANY SUM PAID BY THE ASSESSEE AS AN EMPLOYER BY WAY OF CONTRIBUTION TOWARDS A RECOGNISED PROVIDENT FUND OR AN APPROVED SUPERANNUATION FUND, SUBJECT TO SUCH LIMITS AS MAY BE PRESCRIBED F OR THE PURPOSE OF RECOGNISING THE PROVIDENT FUND OR APPROVING THE SUP ERANNUATION FUND, AS THE CASE MAY BE; AND SUBJECT TO SUCH CONDITIONS AS THE BOARD MAY THINK FIT TO SPECIFY IN CASES WHERE THE CONTRIBUTIONS ARE NOT IN THE NATURE OF ANNUAL CONTRIBUTIONS OF FIXED AMOUNTS OR ANNUAL CON TRIBUTIONS FIXED ON SOME DEFINITE BASIS BY REFERENCE TO THE INCOME CHAR GEABLE UNDER THE HEAD 'SALARIES' OR TO THE CONTRIBUTIONS OR TO THE NUMBER OF MEMBERS OF THE FUND; 5.6 THUS, AS PER THE PROVISIONS OF THE ACT, IF EMPLOYEE S CONTRIBUTION IS PAID TO THE RESPECTIVE DEPARTMENT A FTER DUE DATE AS SPECIFIED IN RESPECTIVE ENACTMENT, THE EMPLOYER SHALL NOT BE ALLOWED DEDUCTION UNDER THE HEAD PROFIT AND GAINS OF THE BUSINESS. 5.7 THE HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT HOTEL LTD. (SUPRA) HAS HELD AS UNDER: 7. THE ISSUE HERE CONCERNS THE INTERPLAY OF SECTIO N 2(24)(X) OF THE ACT READ WITH SECTION 36(1)(VA) OF THE ACT ALONGSIDE PROVISIONS OF THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT , 1952 (ESPECIALLY REGULATION 38 OF THE EMPLOYEES PROVIDENT FUNDS SCHEME, 1952) AND THE PROVISIONS OF THE EMPLOYEES STATE INSURANCE ACT , 1948. THE AO HAD BROUGHT TO TAX AMOUNTS WHICH 8 ITA NO.978/DEL./2018 WERE DEDUCTED BY THE EMPLOYER/ASSESSEE FROM THE SAL ARIES AND WAGES PAYABLE TO ITS EMPLOYEES, AS PART OF THEIR CO NTRIBUTIONS. IT IS NOT IN DISPUTE THAT THE EMPLOYER S RIGHT TO CLAIM DEDUCTIONS UNDER THE MAIN PART OF SECTION 43-B OF THE ACT IS NOT AN ISSUE. THE QUESTION THE AO HAD TO THEN DECIDE WAS WHETHER THE AMOUNTS D EDUCTED FROM THE SALARIES OF THE EMPLOYEES WHICH HAD TO BE DEPOS ITED WITHIN THE STIPULATED TIME (IN TERMS OF NOTIFICATION/CIRCULAR DATED 19.03.1964 WHICH WAS MODIFIED ON 24.10.1973), AS FAR AS THE EP F CONTRIBUTION WENT AND THE PERIOD OF THREE WEEKS AS FAR AS THE ES I CONTRIBUTIONS WENT. THE AO MADE A TABULAR ANALYSIS WITH RESPECT T O THE CONTRIBUTIONS DEDUCTED AND ACTUALLY DEPOSITED. THE CUMULATIVE EFFECT OF NOTIFICATIONS UNDER THE EMPLOYEES PROVIDENT FUNDS ACT , 1952 AND THE EMPLOYEES STATE INSURANCE ACT , 1948 WAS THAT IN RESPECT OF THE EPF SCHEME CONTRIBUTIONS THE DEDUCTIONS WERE TO BE DEPOSITED WITHIN 15 DAYS OF THE SUCCEEDING WAGE PERIOD WITH A GRACE PERIOD OF 5 DAYS; FOR ESI CONTRIBUTIONS THE DEPOSIT WITH THE CONCERNED STATUTORY AUTHORITY HAD TO BE MADE WITHIN THREE WEE KS OF THE SUCCEEDING WAGE MONTH/PERIOD. THE CIT IN THIS CASE CONFIRMED THE ADDITIONS - MADE BY THE AO BASED ON THE ENTIRE AMOU NTS THAT WERE DISALLOWED. THE ITAT HOWEVER GRANTED COMPLETE RELIE F. 8. HAVING REGARD TO THE SPECIFIC PROVISIONS OF THE EMPLOYEES PROVIDENT FUNDS ACT AND ESI ACT AS WELL AS THE CONCERNED NOTIFICATIONS WHICH GRANTED A GRACE PERIO D OF 5 DAYS (WHICH APPEARS TO HAVE BEEN LATE WITHDRAWN RECENTLY ON 08.01.2016), WE ARE OF THE OPINION THAT THE ITAT S DECISION IN THIS CASE WAS NOT CORRECT. THE ASSESSEE UNDOUBTEDLY WAS ENTITLED TO CLAIM THE BENEFIT AND PROPERLY TREAT SUCH AMOUNTS A S HAVING BEEN DULY DEPOSITED, WHICH WERE IN FACT DEPOSITED WITHIN THE PERIOD PRESCRIBED (I.E. 15 + 5 DAYS IN THE CASE OF EPF AND 21 DAYS + ANY OTHER GRACE PERIOD IN TERMS OF THE EXTENT NOTIFICAT ION). AS FAR AS THE AMOUNTS CONSTITUTING DEDUCTIONS FROM EMPLOYEES SALARIES TOWARDS THEIR CONTRIBUTIONS, WHICH WERE MADE BEYOND SUCH ST IPULATED PERIOD, OBVIOUSLY THE ASSESSEE WAS NOT ENTITLED TO CLAIM TH E DEDUCTION FROM ITS RETURNS. 5.8 THERE IS A DISTINCTION BETWEEN EMPLOYER AND EMPLOY EE CONTRIBUTION TO ESI/EPF. IF CONTRIBUTION OF THE EMP LOYEE IS DEDUCTED OUT OF HIS SALARY AND NOT PAID TO THE RESP ECTIVE DEPARTMENT, IT IS THE EMPLOYER WHO ENJOYS THE FUNDS OF THE EMPLOYEE FOR HIS BENEFIT IN THE BUSINESS AND THE EM PLOYEE IS DEPRIVED OF INTEREST ACCRUED ON SAID CONTRIBUTION. THE EMPLOYER HOLD THE PAYMENT AS A TRUSTEE TILL THE DUE DATE OF DEPOSIT PROVIDED 9 ITA NO.978/DEL./2018 IN RESPECT OF ENACTMENT. THE RESPECTIVE ENACTMENT H AS ALTHOUGH PROVIDED DETERRENT TO THE EMPLOYER IN THE FORM OF I NTEREST AND PENALTY AFTER LATE PAYMENT, HOWEVER THE EMPLOYEE WI LL BE STILL DEPRIVED OF THE INTEREST IF THE CONTRIBUTION IS PAI D AFTER THE DUE DATE OF DEPOSIT. IN VIEW OF PROVISION OF SECTION 36 (1)(IV) ACT, THE EMPLOYER IS DISCOURAGED TO MAKE DEPOSIT OF EMPLOYEE S CONTRIBUTION TO ESI/EPF AFTER THE DUE DATE PRESCRIB ED IN RESPECTIVE ENACTMENT. THUS, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT HOTELS LTD (SUPRA), THE FINDING OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE IS UPHELD. THE GROUND NO. 2 OF THE APPEAL OF THE ASSES SEE IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND MARCH, 2021 SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 ND MARCH, 2021. RK/- (DTDS) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI