DCIT CPC, Bangalore V. NM DIAGNOSTICS PRIVATE LIMITED, Mumbai

MA 40/MUM/2023

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The case revolves around the Income Tax Department's appeal against the ITAT's earlier decision which allowed M/s N.M. Diagnostics Pvt. Ltd. a deduction for employee's contributions to PF/ESIC that were deposited beyond the prescribed due date. The Revenue's miscellaneous application sought to recall the ITAT's order based on a Supreme Court ruling in Checkmate Services Pvt. Ltd. Vs. CIT-1, which clarified that deductions for such contributions are only allowable if the payments are made within the statutory due dates. The ITAT, acknowledging the Supreme Court's precedent, decided to set aside its previous order and remand the matter back to the AO for re-evaluation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130185 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-04-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 16-01-2023
• Other Referred Cases: Checkmate Services Pvt. Ltd. Vs. CIT-1, CIT Vs. Hindustan Organics Chemical Ltd., Ghatge Patil Transport Ltd.
• Laws Referred To: PF/ESIC Act, EPF/ESIC Act
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

P a g e | 1 ITA No.363/Mum/2022 M.A. 40/Mum/2023 ITO-13(3)(1) Vs. M/s N.M. Diagnostics pvt. Ltd. IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 363/Mum/2022 M.A. No. 40/Mum/2023 (A.Y.2017-18) ITO-13(3)(1) R. No. 227, 2 nd Floor, Aaykar Bhawan, M.K. Road, Mumbai – 400 020 Vs. M/s N.M. Diagnostics Pvt. Ltd., 32 summerville, Jn. Of 14 th and 33 rd , Above Bombay Blue Restaurant, Link road, Khar (West) Mumbai – 400050 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AADCR1280P Appellant .. Respondent Appellant by : Manoj Sinha Respondent by : None Date of Hearing 17.03.2023 Date of Pronouncement 24.04.2023 आदेश / O R D E R Per Amarjit Singh (AM): Vide miscellaneous application no. 40/Mum/2023 the revenue seek to recall the order of the ITAT vide ITA No. 363/Mum/2022 dated 23.05.2022 for AY. 2017-18. 2. Vide this miscellaneous application the revenue submitted that the Tribunal vide ITA No. 363/Mum/2022 has allowed the claim of the assesse with respect to payment pertaining to the amount deposited towards employees contribution to PF/ESIC beyond the due date for payment as specified in PF/ESIC Act. It is submitted that 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 has uphold the P a g e | 2 ITA No.363/Mum/2022 M.A. 40/Mum/2023 ITO-13(3)(1) Vs. M/s N.M. Diagnostics pvt. Ltd. disallowance of employee’s contribution to PF/ESIC if the employers did not deposit the amount towards employees contribution on or before the due date as prescribed under the EPF/ESIC then the assessee was not entitled for the deduction. 3. The claim of deduction pertaining to the amount deposited towards employee’s contribution to PF/ESIC beyond the due date for payment was allowed following the decision of Hon’ble jurisdictional High Court in the case of CIT Vs. Hindustan Organics Chemical Ltd. (2014) 366 ITR 1 (Bom) and the decision in the case of Ghatge Patil Transport Ltd. (2014) 368 ITR 249 (Bom). 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 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 under the respective act for availing the deduction. Therefore, we recall the above impugned order of the Tribunal and the same is adjudicated as follows: ITA No. 363/Mum/2022 4. Heard the ld. D.R and perused the material on record. It is undisputed fact that assesse has deposited the amount of Rs.2,08,464/- of employee’s contribution towards PF/ESIC to the Government account beyond the due date prescribed in the PF/ESIC Act. The assessee has referred the decision of various High Court wherein it is held that if the employees contribution to PF/ESIC etc. paid before the due date of filing return of income by the assesse the claim of deduction is allowable. 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 decision, the Hon’ble P a g e | 3 ITA No.363/Mum/2022 M.A. 40/Mum/2023 ITO-13(3)(1) Vs. M/s N.M. Diagnostics pvt. Ltd. Supreme Court held that it is an essential condition for the deduction that such amount are deposited within the due date specified in the particular law. 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 employees 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 AO 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, the appeal of the assessee is treated as allowed for statistical purposes. 6. In the result, the miscellaneous application filed by the Revenue is allowed and the appeal filed by the assesse is treated as allowed for statistical purposes. Order pronounced in the open court on 24.04.2023 Sd/- Sd/- (Amit Shukla) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 24.04.2023 Rohit: PS P a g e | 4 ITA No.363/Mum/2022 M.A. 40/Mum/2023 ITO-13(3)(1) Vs. M/s N.M. Diagnostics pvt. Ltd. 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.