ACIT Circle-1(1), Sambalpur, Sambalpur V. Nikunj Bhai Rukhiyana, Gurgaon

MA 11/CTK/2023

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The case involves the Assistant Commissioner of Income Tax (ACIT), Circle-1(1), Sambalpur as the appellant and Shri Nikunj Bhai Rukhiyana as the respondent. The dispute centered on the disallowance of the employee's contribution to Provident Fund (PF) and Employee State Insurance (ESI) under sections 36(1)(va) read with section 2(24)(x) of the Income Tax Act. The Tribunal's earlier decision was challenged by the revenue following a Supreme Court ruling in Checkmate Services Pvt Ltd vs CIT, which held that contributions delayed beyond the statutory deadline are not deductible under section 43B, regardless of subsequent payment before the tax return due date. The Tribunal, acknowledging the Supreme Court's decision as the law of the land, recalled its previous order and restored the matter to the Assessing Officer for fresh consideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300230 (ITAT-CUTTACK)
• Duration Of Justice: 30 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-02-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-02-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 24-01-2023
• Other Referred Cases: Checkmate Services Pvt Ltd vs CIT, Nirakar Security & Consultancy Services Pvt Ltd vs ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business expenditure
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE AND ARUN KHODPIA, ACCOUNTANT MEMBER ACIT, Circl;e Sambalpur PAN/GIR No. (Appellant Per Bench This is an M.A. filed by the revenue order of the Tribunal dated for the assessment year decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd. Vs CIT civil Appeal No.2833/2016 dated 12.10.2022. 2. Shri S.C.Mohanty, ld Sr DR appeared for the reve appeared on behalf of the assessee. However, written submission is filed by the assessee. IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER M.A.No.11/CTK/2023 (in ITA No.96/CTK/2022) Assessment Year : 2018-19 ACIT, Circl;e-1(1), Vs. Shri Nikunj Bhai Rukhiyana, Sadar Bazar, Dhamtari, Dhamtari, Chhatisgarh PAN/GIR No.AEEPR 7113 P (Appellant) .. ( Respondent Assessee by : None Revenue by : Shri S.C.Mohanty Date of Hearing : 24/0 Date of Pronouncement : 24/0 O R D E R This is an M.A. filed by the revenue u/s.254(2) of the Act Tribunal dated 10.10.2022 arising out of ITA No.96/CTK/2022 for the assessment year 2018-19 for recalling the order in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd. Vs CIT civil Appeal No.2833/2016 dated 12.10.2022. Shri S.C.Mohanty, ld Sr DR appeared for the reve appeared on behalf of the assessee. However, written submission is filed by the assessee. Page1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER ) Shri Nikunj Bhai Rukhiyana, Sadar Bazar, Dhamtari, Dhamtari, Chhatisgarh Respondent) S.C.Mohanty, Sr DR 02/2023 /02/2023 u/s.254(2) of the Act against the arising out of ITA No.96/CTK/2022 for recalling the order in view of the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd. Vs CIT civil Appeal No.2833/2016 dated 12.10.2022. Shri S.C.Mohanty, ld Sr DR appeared for the revenue . None appeared on behalf of the assessee. However, written submission is filed M.A.No.11/CTK/2023 (in ITA No.96/CTK/2022) Assessment Year : 2018-19 Page2 | 4 3. Ld Sr. DR submitted that the issue involved in this appeal is disallowance of employee’s contribution to PF and ESI u/s.36(1)(va) r.w.s 2(24)(x) of the Act. It was his submission that the issue is now settled by the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd vs CIT in Civil Appeal No.2833 of 2016 order dated 12.10.2022. He, therefore, prayed that the order of the Tribunal dated 10.10.2022 be recalled for fresh hearing. 4. We have heard ld Sr Dr. and perused the written submission filed by the assessee. It is noticed that the issue in respect of delay payment of employee’s contribution to PF and ESI paid beyond the due date under the respective Act but before the due date of filing of return is squarely covered by the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd (supra), wherein, the Hon’ble Supreme Court has categorically held that if the employees contribution to PF and ESI has been paid beyond the time prescribed under the relevant PF Act, then same is not allowable under section 43B even after the payment has been made before the due date of filing of return under the Income tax Act. 5. The law laid down by the Hon’ble Supreme Court is the law of the land as it is to be understood from the incorporation of the provisions. Consequently, there is a mistake apparent M.A.No.11/CTK/2023 (in ITA No.96/CTK/2022) Assessment Year : 2018-19 Page3 | 4 from the order of the Tribunal dated 10.10.2022. This being so, the order of the Tribunal dated 10.10.2022 is recalled and the M.A. filed by the revenue stand allowed. 6. It is further noticed that the issue is now squarely covered by the decision of the Co-ordinate bench of this Tribunal in the case of Nirakar Security & Consultancy Services Pvt Ltd vs ITO in ITA No.98/CTK/2022 for Assessment Year 2016-17, order dated 17.10.2022, wherein, the Co-ordinate Bench of this Tribunal has restored the issue to the file of the Assessing officer with the following directions: “6. Liberty is granted to the ld AR to make all submissions in respect of allowability of disallowed contribution of the employees to PF and ESI under other relevant provisions in the interest of justice. This direction is being given because ld AR has submitted that as the amount is not allowable under section 36(1)(va) of the Act and same is also not covered under section 43B of the Act, the amount of delayed contribution to PF and ESI in respect of employees contribution would be treated as income in the hands of the assessee u/.s.2(24)(x) and on subsequent payment of the same, it would be a business expenditure, which can be claimed u/s.37(1) of the Act. We are not expressing any opinion in regard to his arguments as it has not been examined by the lower authorities. Liberty is also granted to the assessee to raise all arguments as are found necessary by him before the lower authorities.” 7. As the issue in the present appeal is also identical to the issue in the case of Nirakar Security & Consultancy Services Pvt Ltd.,(supra), on identical findings the issue in this appeal is restored to the file of the AO for M.A.No.11/CTK/2023 (in ITA No.96/CTK/2022) Assessment Year : 2018-19 Page4 | 4 re-adjudication after granting the assessee adequate opportunity of being heard. 8. In the result, M.A. filed by the revenue stands allowed and the appeal of the assessee is partly allowed for statistical purposes. Order dictated and pronounced in the open court on 24/02/2023. SD/- SD/- (Arun Khodpia) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 24/02/2023 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : ACIT, Cricle-1(1), Sambalpur 2. The Respondent: Nikunj Bhai Rukhiyana, Sadar, BAZAR Dhamtari. C.G. 3. The CIT(A)-, Sambalpur 4. Pr.CIT-, Sambalpur 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//