Adit (cpc) , BANGLORE V. Babubhai jagjivandas, Mumbai

MA 62/MUM/2023

AI Insights

The case involves the Deputy Commissioner of Income Tax-19(1) as the appellant and Babubhai Jagjivandas as the respondent. The dispute centered on the deduction claim for employee's contributions to PF/ESIC which were not deposited by the due dates prescribed under the PF/ESIC Act but were paid before the due date for filing the income tax return. Initially, the ITAT had allowed the deduction based on previous decisions. However, following a Supreme Court ruling in Checkmate Services Pvt. Ltd. vs. CIT-1, which clarified that such contributions must be deposited by the due dates to qualify for deductions, the ITAT recalled its earlier order and directed the matter to be re-evaluated by the assessing officer.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130324 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-04-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-03-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 18-01-2023
• 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: PF/ESIC Act, Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(1); 48

Judgement Text

P a g e | 1 The DCIT-19(1) Vs. Babubhai Jagjivandas ITA No. 2054/Mum/2021 MA No. 62/Mum/2023 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 2054/Mum/2021 M.A. No. 62/Mum/2023 (A.Y.2019-20) The Deputy Commissioner of Income Tax-19(1), Room No. 203, 2 nd Floor, Matru Mandir Grant Road, Mumbai – 400 007 Vs. Babubhai Jagjivandas 128, Vishnu Niketan Prathna Samaj Road New Charni Road, Mumbai – 400 004 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAAFB5829N Appellant .. Respondent Appellant by : Bhupendra Shah Respondent by : Chetan M. Kacha Date of Hearing 24.03.2023 Date of Pronouncement 24.04.2023 आदेश / O R D E R Per Amarjit Singh (AM): Vide miscellaneous application no. 62/Mum/2023 the revenue seek to recall the order of the ITAT vide ITA No. 2054/Mum/2021 dated 23.05.2022 for AY. 2019-20. 2. The revenue submitted that vide the aforesaid order the ITAT has allowed the claim of the assesse with respect to deduction pertaining to the amount deposited towards employee’s contribution to PF/ESIC deposited beyond the due date for payment as specified in PF/ESIC Act but paid before the due for filing the return of income after following the decision of coordinate benches. In this regard, 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 held that if the P a g e | 2 The DCIT-19(1) Vs. Babubhai Jagjivandas ITA No. 2054/Mum/2021 MA No. 62/Mum/2023 employer’s did not deposit the amount towards employee’s contribution on or before the due date as prescribed in the EPF/ESIC, the assessee was not entitled to the deduction. The Hon’ble Supreme Court vide the decision referred supra 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 supra we recall the impugned order of the Tribunal and the same is adjudicated as follows: ITA No. 2054/Mum/2021 3. The fact in brief is that assesse filed the return of income declaring total income of Rs.2,31,31,478/- was filed on 27.09.2019. While processing the return of income u/s 143(1) the CPC Banglore found that assessee has not deposited the employee’s contribution towards PF/ESIC amounting to Rs.5,29,961/- to the government account within the due date as prescribed in the PF/ESIC Act. Therefore, the CPC has disallowed amount of Rs.5,29,961/- on account of late deposit of employee’s contribution towards PF/ESIC u/s 36(1)(va) r.w.s 2(24)(x) of the Act to the government account beyond the due date as prescribed in the PF/ESIC Act. 4. 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 decision 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 wherein held that it is an essential condition for allowing P a g e | 3 The DCIT-19(1) Vs. Babubhai Jagjivandas ITA No. 2054/Mum/2021 MA No. 62/Mum/2023 the impugned deduction that such amounts are deposited within the due dates 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 assesse was not entitled to the deduction. We consider that vide 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 the entire controversy set at rest wherein it is held that employer’s have to deposit the employee’s contribution towards EPF/ESIC on or before the due date for availing deductions. Therefore, following the decision of Hon’ble Supreme Court as supra we restore this issue to the file of the assessing officer 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 filed by the assessee is treated as allowed for statistical purposes. 5. 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 The DCIT-19(1) Vs. Babubhai Jagjivandas ITA No. 2054/Mum/2021 MA No. 62/Mum/2023 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.