DRAEGER SAFETY INDIA PVT. LTD, MUMBAI V. COMMISSIONER OF INCOME TAX NFAC, MUMBAI

MA 33/MUM/2023

AI Insights

The case involves Draeger Safety India Pvt. Ltd., which appealed against the adjustments made by the Central Processing Centre (CPC) Bangalore under section 143(1) of the Income Tax Act, concerning late deposits of employee contributions to EPF/ESIC. Initially, the ITAT had allowed the assessee's claim for deductions for these late deposits made before the due date of filing the income tax return under section 139(1). However, following the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT-1, which clarified that such contributions must be deposited within the statutory due dates to be eligible for deductions, the ITAT recalled its earlier order and directed the matter to be re-adjudicated by the A.O.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130138 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-03-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 15-01-2023
• Other Referred Cases: Checkmate Services Pvt. Ltd. Vs. CIT-1, Ghatge Patil Transport Ltd. Vs. CIT, CIT Vs. Hindustan Organics Chemical Ltd.
• Laws Referred To: Income Tax Act, EPF/ESIC Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(1); 139(1); 48

Judgement Text

P a g e | 1 ITA No.1533/Mum/2022 MA 33/Mum/2023 Draeger Safety India Pvt. Ltd. Vs. CIT, NFAC, Delhi IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 1533/Mum/2022 M.A. No. 33/Mum/2023 (A.Y.2018-19) Draeger Safety India Private Limited, 9 th Floor, Commerz II International Business Park, Oberoi Garden City, Off Western Express Highway Mumbai – 400063 Vs. Commissioner of Income Tax Appeals, National Faceless Assessment Centre, Delhi स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAECD0537A Appellant .. Respondent Appellant by : Bhupendra Shah Respondent by : Manoj Sinha Date of Hearing 17.03.2023 Date of Pronouncement 26.04.2023 आदेश / O R D E R Per Amarjit Singh (AM): Vide miscellaneous application no. 33/Mum/2023 the revenue seek to recall the order of the ITAT vide ITA No. 1533/Mum/2022 dated 14.11.2022. 2. The revenue submitted that Tribunal vide ITA No. 1533/Mum/2022 has allowed the claim of the assessee 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 PE/ESIC Act but paid before the due date of filing return of income u/s 139(1) of the Act. In this regard, it is submitted that Hon’ble P a g e | 2 ITA No.1533/Mum/2022 MA 33/Mum/2023 Draeger Safety India Pvt. Ltd. Vs. CIT, NFAC, Delhi 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 employer’s 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. Considering the decision of Hon’ble Supreme Court as referred above, we recall the impugned order of the Tribunal and the same is adjudicated as follows: ITA No.1533/Mum/2022 3. Heard both the sides and perused the material on record. The CPC Banglore processed the return of income u/s 143(1) and made adjustment of Rs.14,07,060/- u/s 36(1)(va) r.w.s. 2(24)(x) of the Act for late deposit of employee’s contribution to EPF/ESIC beyond the due date as prescribed in the specified Act. 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) and in the case of CIT Vs. Hindustan Organics Chemical Ltd. (2014) 48 taxmann.com 421 (Bom) and various other decisions of other High Courts and Tribunals. However, we, consider that 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 decision the Hon’ble Supreme Court 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 the deduction. Therefore, we consider that the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT as supra has set rest the entire controversy wherein it is held that employer have to deposit P a g e | 3 ITA No.1533/Mum/2022 MA 33/Mum/2023 Draeger Safety India Pvt. Ltd. Vs. CIT, NFAC, Delhi employer’s contribution towards EPF/ESIC on or before the due date for availing 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 Checkmate Services Pvt. Ltd. Vs. CIT-1 Civil appeal no. 2833 of 2016 dated 12.10.2022, therefore, the appeal filed by the assessee is treated as allowed for statistical purposes. 4. In the result, the miscellaneous application filed by the revenue is allowed and the appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 26.04.2023 Sd/- Sd/- (Aby T Varkey) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 26.04.2023 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.