KACHAN METALS PVT. LTD.,KOLKATA V. DY. CIT, CIRCLE- 8(1), , KOLKATA

ITA 2350/KOL/2024

AI Insights

Kachan Metals Pvt. Ltd. appealed against the order of the National Faceless Appeal Centre, Delhi, which confirmed the addition of \\u20b950,18,414 to the assessee's income for the Assessment Year 2022-23. This addition was initially made by the Assessing Officer (AO) due to the delayed payment of EPF and ESI contributions, which were not made within the due dates prescribed under the respective Acts. The CIT (A) upheld this decision, referencing the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT. However, the Tribunal found that the delay was caused by the unavailability of the banking portal on the due date, and thus, the delay was not attributable to the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25408 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2022-2023
• Other Referred Cases: Checkmate Services Pvt. Ltd. Vs. CIT (2022) 143 taxmann.com 178 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJA SENGUPTA
• Assessee Lawyers: ANIL KOCHAR
• Keywords: Set aside; Rectification of order
• Section: 154; 143(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM ITA No.2350/KOL/2024 (Assessment Year:2022-23) Kachan Metals Pvt. ltd. 19G, 19th Floor, Everest House, 46C, J.L. Nehru Road, Kolkata-700071 West Bengal Vs. DY. CIT, Circle-8(1) P-7, Chowringhee Square, Kolkata-700069 West Bengal (Appellant) (Respondent) PAN No. AABCK3407F Assessee by : Shri Anil Kochar, AR Revenue by : Shri Raja Sengupta, DR Date of hearing: 29.01.2025 Date of pronouncement : 28.03.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 05.11.2024 for the AY 2022-23. 02. The only issue raised by the assessee is against the confirmation of addition of ₹5,18,414/- by the ld. CIT (A) as made by the ld. AO(CPC) on account of delayed payment of PF and ESI. 03. The facts in brief are that the assessee filed the return of income declaring total income of ₹5,57,87,617/-. The said return was processed u/s 143(1) of the Act and the disallowance for delayed payment of ESI/ EPF was made to the tune of ₹5,18,414/-. The amount was disallowed u/s 36(1)(va) of the Act on the ground that Page | 2 ITA No.2350/KOL/2024 Kanchan Metals Pvt. Ltd; A.Y. 2022-23 the payments of the above respective amounts were not made within the due date under the respective Act. The assessee filed the rectification petition for rectification of the mistake, however, the CPC passed the rectification order u/s 154 of the Act dated 01.09.2023, rejecting the request of the assessee. 04. In the appellate proceedings, the ld. CIT (A) also dismissed the appeal of the assessee by relying on the decision of the Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. Vs. CIT (2022) 143 taxmann.com 178 (SC) dated 12.10.2022, on the ground that the employees’ contributions were made beyond the due date as provided in the respective Acts. 05. After hearing the rival contentions and perusing the materials available on record including evidences of banking portal being unavailable on the last date of payments i.e. on 15.06.2021. After perusing these evidences, we note that the assessee could not deposit the payment on the last date on the ground that the banking portal was not available for making payments of these amounts due in respect of EPF and ESI and therefore, payment was made immediately on the next date i.e. 16.06.2021. This is the only reason for late payment of EPF/ESI by one day. The AO CPC disallowed the amount as not allowable u/s 36(1)(va) of the Act and the ld. CIT (A) simply followed the following decision of the Hon'ble Apex court in the case of Checkmate Services Pvt. ltd. (supra )that payments were not made within the due date as mentioned in the respective Acts. In our opinion, the delay in payment of these contributions was on account of non-functioning of the banking portals and therefore, this delay cannot be attributed to the assessee. It is for this reason there is a sufficient and bonafide reasons for late payment of these amounts. Page | 3 ITA No.2350/KOL/2024 Kanchan Metals Pvt. Ltd; A.Y. 2022-23 Accordingly, we set aside the order of the ld. CIT (A) and direct the AO to delete the addition. 06. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28.03.2025. Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 28.03.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "