CIT (A) NFAC, DELHI V. M/S. INDIGENOUS BUREAU OF INDIA, MUMBAI

MA 22/MUM/2023

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT) and the Indigenous Bureau of India, where the revenue sought to recall the ITAT's earlier decision allowing deductions for late deposits of employee contributions to PF/ESIC. The ITAT had initially allowed these deductions based on various High Court decisions. However, following the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT-1, which clarified that such contributions must be deposited by the due dates specified in the respective acts to be eligible for deductions, the ITAT recalled its earlier order and directed the matter to be re-adjudicated by the Assessing Officer.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130278 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-04-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-03-2023
• Assessment Year: misc
• Appeal Filed On: 11-01-2023
• Other Referred Cases: Checkmate Services Pvt. Ltd. Vs. CIT-1, Ghatge Patil Transport Ltd.
• Laws Referred To: PF/ESIC Act, Sec. 36(1)(va), Sec. 43B of the Act, Sec. 139(1) of the Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 43B; 139(1); 43

Judgement Text

P a g e | 1 ITA Nos.81 & 82/Mum/2022 MA Nos. 21 & 22/Mum/023 DCIT-17(1) Vs. Indigenous Bureau of india IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA Nos. 81 & 82/Mum/2022 M.A. Nos. 21 & 22/Mum/2023 (A.Y.2018-19) DCIT-17(1) 117, Kautilya Bhawan, BKC, Bandra East, Mumbai – 4000051 Vs. Indigenous Bureau of India 164, 3 rd Floor, Zaveri Chamber Modi Street, For, Mumbai - 400001 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAAFI1617K Appellant .. Respondent Appellant by : Chetan M. Kacha Respondent by : None Date of Hearing 24.03.2023 Date of Pronouncement 21.04.2023 आदेश / O R D E R Per Amarjit Singh (AM): Vide miscellaneous applications no. 21 & 22/Mum/2023 the revenue seek to recall the order of the ITAT vide ITA Nos. 81 & 82/Mum/2022 for assessment year 2018-19 & 2019-20 dated 31.05.2022. 2. Inspite of issuing of notices and adjournment of hearing on 10.03.2023 and 24.03.2023 neither any one has attended on behalf of the assesse nor filed any written submission, therefore the matter is adjudicated after hearing the ld. D.R and after taking into consideration the material placed on record. Vide the miscellaneous application the revenue submitted that the ITAT vide ITA No. 81 & 82/Mum/2022 dated 31.05.2022 has allowed the claim of the assessee with respect to deduction pertaining to the amount deposited towards employee’s P a g e | 2 ITA Nos.81 & 82/Mum/2022 MA Nos. 21 & 22/Mum/023 DCIT-17(1) Vs. Indigenous Bureau of india contribution to PE/ESIC beyond the due date for payment specified in the PF/ESIC Act but deposited before the due date of filing return of income after following the various decisions of jurisdictional High Court’s. 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 and others dated 12.10.2022 set at rest the entire controversy wherein it is held that employers have to deposit the employee’s contribution towards PE/ESIC on or before the due date prescribed under the respect acts for availing the deduction. Considering the decision of Hon’ble Supreme Court as referred above, we recall this order of the Tribunal as mentioned above and the same are adjudicated as follows: ITA No. 81 & 82/Mum/2022 3. Fact in brief are that assessee has deposited the amount of Rs.6,70,755/- for A.Y. 2018-19 and Rs.28,21,237/- pertaining to assessment year 2019-20 of employee’s contribution towards PF/ESIC to the government account beyond the due date as prescribed in the PF/ESIC Act but before the due date of filing the return of income. Therefore the claim of deduction u/s 36(1)(va) was disallowed by the CPC. Before the ld. CIT(A) the assessee has referred the decision of Hon’ble jurisdictional High Court in the case of Ghatge Patil Transport Ltd. (2015) 53 taxmann.com 141 (Bombay) wherein it is held that both employees and employer’s contribution are covered under the amendment to Sec. 43B of the Act and employee’s contribution to EPF/ESIC are allowable if paid before the due date of filing of return of income u/s 139(1) of the Act. The assessee has also referred various other decisions before the ld. CIT(A). P a g e | 3 ITA Nos.81 & 82/Mum/2022 MA Nos. 21 & 22/Mum/023 DCIT-17(1) Vs. Indigenous Bureau of india However, the ld. CIT(A) has dismissed the appeal of the assessee following the decision of the Hon’ble Supreme Court in the case of Checkmate Services (P) Ltd. Vs. CIT (2022) 43 taxmann.com 178 (SC). 4. However, the cases referred by the assessee 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. In this regard the decision the Hon’ble Supreme Court held that it is an essential condition for claiming the deduction towards employee’s contribution that such amounts are deposited within the due date specified in the particular law. If the employer did not deposit the amount towards employees contribution on or before the due date as prescribed under the EPF/ESIC Act, the assessee was not entitled to the deduction. Therefore, following the decision of Hon’ble Supreme Court we restore this issue to the file of the A.O for deciding afresh in accordance with the decision of 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. Therefore, both the appeal filed by the assessee are treated as allowed for statistical purposes. 5. In the result, the miscellaneous applications filed by the revenue are allowed and both the appeals of the assesse are treated as allowed for statistical purposes. Order pronounced in the open court on 21.04.2023 Sd/- Sd/- (Vikas Awasthy) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 21.04.2023 Rohit: PS P a g e | 4 ITA Nos.81 & 82/Mum/2022 MA Nos. 21 & 22/Mum/023 DCIT-17(1) Vs. Indigenous Bureau of india 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.