DY.Commissioner of Income Tax, CIRCLE-8(2)(1), MUMBAI V. PARAMOUNT HEALTH SERVICES AND INSURANCE TPA PVT LTD, MUMBAI

MA 151/MUM/2023

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The case involves the Deputy Commissioner of Income Tax (DCIT), Circle 8(2)(1) vs. M/s Paramount Health Services & Insurance TPA Pvt. Ltd., where the revenue sought to recall the ITAT's earlier orders allowing deductions for delayed remittance of employee's contributions to PF/ESIC. The ITAT had initially allowed these deductions based on precedents set by the Mumbai ITAT and decisions of the Bombay High Court. However, following a Supreme Court decision, which clarified that such contributions must be deposited by the due date to be eligible for deductions, the ITAT recalled its earlier orders and directed a re-assessment in line with the Supreme Court's decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130298 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-06-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-06-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 08-02-2023
• Other Referred Cases: Checkmate Services Pvt. Ltd. Vs. CIT-1, CIT Vs. Hindustan Organics Chemical Ltd., CIT Vs. Ghatge Patil Transport Ltd., Veritas Infratech Pvt. Ltd.
• Laws Referred To: EPF/ESIC Act, Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(1); 48

Judgement Text

P a g e | 1 MA No. 150 & 151/Mum/2023 DCIT, Circle 8(2)(1) Vs. M/s Paramount Health Services & Insurance TPA Pvt. Ltd. IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M.A. No. 150 & 151/Mum/2023 ITA Nos.2547 & 2548/Mum/2021 (A.Ys. 2017-18 & 2018-19) DCIT, Circle 8(2)(1) Room No. 624, 6 th Floor, Aaykar Bhavan Mumbai – 400 020 Vs. M/s Paramount Health Services & Insurance TPA Pvt. Ltd., 1 st Floor, Elite Auto, House, 54AM Vasanji Marg, Mumbai स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AACCP4465H Appellant .. Respondent [[ Appellant by : Mahita Nair Respondent by : Rajesh Shah Date of Hearing 09.06.2023 Date of Pronouncement 16.06.2023 आदेश / O R D E R Per Amarjit Singh (AM): Vide M.A. No.150/Mum/2023 and M.A. No. 151/Mum/2023 the revenue seek to recall the order of the ITAT vide ITA No.2547 & 2548/Mum/2021. Both the miscellaneous applications are adjudicated together since the same are based on the similar issue and identical facts pertaining to assessment year 2017-18 and 2018-19 directed against the above referred orders of the ITAT. The revenue submitted that Tribunal vide ITA No. 2547 & 2548/Mum/2021 has allowed the claim of the assesse with respect to deduction pertaining to amount deposited towards employee’s contribution to PF/ESIC beyond the due date for payment as specified in the PF/ESIC Act but paid before the due date of filing the return of income after following the decision of ITAT Mumbai in the case of Veritas Infratech Pvt. Ltd. i.e ITA No. 2456 P a g e | 2 MA No. 150 & 151/Mum/2023 DCIT, Circle 8(2)(1) Vs. M/s Paramount Health Services & Insurance TPA Pvt. Ltd. & 2457/Mum/2021 AYs. 2018-19 & 2019-20, dated 12.05.2022 based on the decision of Hon’ble jurisdictional High Court in the case of CIT Vs. Hindustan Organics Chemical Ltd. (2014) 366 ITR 1 (Bom) and CIT Vs. Ghatge Patil Transport Ltd. (2014) 368 ITR 749 (Bom). In this regard, it is submitted that Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT-1 Civil Appeal No. 2833 of 2016 dated 12.10.2022 held that if the employer did not deposit the amount towards employees contribution on or before the due date as prescribed in the EPF/ESIC the assessee was not entitled to the deduction. 2. Heard both the sides and perused the material on record. We consider that the Hon’ble Supreme Court vide the decision referred as supra set at rest the entire controversy wherein it is held that employer have to deposit the employee’s contribution towards PF/ESIC on or before the due date prescribed in the respective law for availing the deduction. Therefore, considering the decision of Hon’ble Supreme Court as referred supra we recall the impugned orders of the Tribunal and the same are adjudicated as follows. ITA Nos. 2547 & 2548/Mum/2021 3. The fact in brief is that AO made adjustment in the intimation passed assessment u/s 143(1) of the Act by way of disallowance of delayed remittance of employee’s contribution to PF/ESI to the amount of Rs.48,78,057/- for assessment year 2017-18 and amount of Rs.17,35,330/- pertaining to assessment year 2018-19 on the ground that same were paid beyond the due date. 4. The assesse filed the appeal before the ld. CIT(A). However, the ld. CIT(A) has dismissed the appeal of the assessee. 5. During the course of appellate proceedings before the ITAT the assessee has referred the decision of Hon’ble Jurisdictional High Court in the case of Ghatge Patil Transport Ltd (2015) 53 taxman.com 141 P a g e | 3 MA No. 150 & 151/Mum/2023 DCIT, Circle 8(2)(1) Vs. M/s Paramount Health Services & Insurance TPA Pvt. Ltd. (Bom) and the decision in the case of CIT Vs. Hindustan Organics Chemical Ltd. (2014) 48 taxman.com 421 (Bom) and other decisions. 6. Heard both the sides and perused the material on record. We consider that the cases referred by the assesse are of no help in view of the judgment of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT-1 Civil Appeal No. 2833 of 2016 dated 12.10.2022 wherein it is held that it is essential condition for allowing the impugned deduction that such amounts are deposited within the due date as prescribed in the specified Act. If the employer did not deposit the amount towards employee’s contribution on or before the due date as prescribed under the EPF/ESIC Act, the assessee was not entitled to deduction. We consider that vide the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. the entire controversy is set at rest wherein it is held that employer have to deposit the employee’s contribution towards EPF/ESIC on or before the ‘due date’ under the respective Acts. Therefore, following the decision of the Hon’ble Supreme Court (supra) we restore this issue to the file of assessing officer for deciding afresh in accordance with the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd., therefore, the appeal filed by the assessee are treated as allowed for statistical purposes. 7. In the result, the miscellaneous application filed by the revenue are allowed and the appeals filed by the assesse are treated allowed for statistical purposes. Order pronounced in the open court on 16.06.2023 Sd/- Sd/- (Vikas Awasthy) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 16.06.2023 P a g e | 4 MA No. 150 & 151/Mum/2023 DCIT, Circle 8(2)(1) Vs. M/s Paramount Health Services & Insurance TPA Pvt. Ltd. Rohit: PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.