ITO Jajpur, Jajpur V. Anil Kumar Jena, Jajpur

MA 13/CTK/2023

AI Insights

The case involves the Income Tax Officer, Ward, Jajpur as the appellant and Anil Kumar Jena as the respondent. The core issue was the disallowance of the employee's contribution to PF and ESI for the assessment year 2019-2020. Initially, the Tribunal's decision allowed the deduction, but following the Supreme Court's decision in Checkmate Services Pvt Ltd vs CIT, which held that such contributions are not deductible if paid beyond the prescribed time, the revenue filed an M.A. to recall the Tribunal's order. The Tribunal, acknowledging the Supreme Court's decision as the law of the land, recalled its earlier order and restored the matter to the Assessing Officer for fresh consideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300289 (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: 2019-2020
• 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 Income Tax Officer, War Jajpur 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 Sandeep Kumar Jena 3. Ld Sr is disallowance of employee’s contribution to PF and ESI IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL AND ARUN KHODPIA, ACCOUNTANT MEMBER M.A.No.13/CTK/2023 (in ITA No.138/CTK/2021 Assessment Year : 2019-2020 Income Tax Officer, Ward, Vs. Anil Kumar Jena, Kalinga Nagar, Jajpur Road, Jajpur PAN/GIR No.AFEPJ 0324 H (Appellant) .. ( Respondent Assessee by : Shri Sandeep Kumar Jena 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 20.9.2022 arising out of ITA No.13 for the assessment year 2019-2020 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 Sandeep Kumar Jena, ld AR appeared for the assessee. DR submitted that the issue involved in this appeal is disallowance of employee’s contribution to PF and ESI Page1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER AND ARUN KHODPIA, ACCOUNTANT MEMBER 21) 2020 Anil Kumar Jena, Kalinga Nagar, Jajpur Road, Jajpur Respondent) Sandeep Kumar Jena, AR S.C.Mohanty, Sr DR 02/2023 /02/2023 u/s.254(2) of the Act against the .9.2022 arising out of ITA No.138/CTK/2021 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. DR appeared for the revenue and Shri , ld AR appeared for the assessee. DR submitted that the issue involved in this appeal is disallowance of employee’s contribution to PF and ESI M.A.No.13/CTK/2023 (in ITA No.138/CTK/2021) Assessment Year : 2019-2020 Page2 | 4 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 20.9.2022 be recalled for fresh hearing. 4. We have heard the rival submissions. 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 from the order of the Tribunal dated 20.9.2022. This being so, M.A.No.13/CTK/2023 (in ITA No.138/CTK/2021) Assessment Year : 2019-2020 Page3 | 4 the order of the Tribunal dated 20.9.2022 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 re-adjudication after granting the assessee adequate opportunity of being heard. M.A.No.13/CTK/2023 (in ITA No.138/CTK/2021) Assessment Year : 2019-2020 Page4 | 4 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 : Income Tax Officer, Ward, Jajpur 2. The Respondent: Anil Kumar Jena, Kalinga Nagar, Jajpur Road, Jajpur 3. The CIT(A)-, Cuttack 4. Pr.CIT-, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//