SREEJITH VELAPPAN RADHAMONY,THIRUVANANTHAPURAM V. DCIT,CIRCLE 1(1), TRIVANDRUM

ITA 982/COCH/2024

AI Insights

The case involves Sreejith Velappan Radhamony, the appellant, who filed an appeal against the order of the National Faceless Appeal Centre, which had confirmed the disallowance of a deduction for belated remittance of ESI & PF contributions for the Assessment Year 2018-19. The primary legal issue was whether the belated remittance of employees' contributions to ESI & PF, paid after the statutory due date but before the due date for filing the income tax return, should be allowed as a deduction. The Tribunal considered various judicial precedents, including decisions from the Supreme Court and the Kerala High Court, which consistently held that such deductions are not permissible if the payments are made beyond the statutory due dates.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633136 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Other Referred Cases: Checkmate Services Pvt. Ltd. vs. CIT [2022] 448 ITR 518 (SC), CIT v. Merchem Ltd. [2015] 378 ITR 443, Popular Vehicles & Services Pvt. Ltd. v. CIT [2018] 96 Taxmann.com 13
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: NIVEDITA A. KAMAT

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SONJOY SARMA, JM ITA No. 982/Coch/2024 Assessment Year: 2018-19 Sreejith Velappan Radhamony .......... Appellant TC 23/169, Knra 88, Lekshmi Varaham Valiyalasala, Chala P.O., Trivandrum 695036 [PAN: AHHPR8214M] vs. DCIT, Circle-1(1), Thiruvananthapuram .......... Respondent Appellant by: Smt. Nivedita A. Kamat, Advocate Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 05.06.2025 Date of Pronouncement: 13.06.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 25.07.2022 for Assessment Year (AY) 2018-19. 2. Brief facts of the case are that the appellant is an individual engaged in business. The return of income for AY 2018-19 was filed on 28.02.2019 declaring income of Rs. 79,57,560/-. The said return of income was processed u/s. 143(1) of the Income Tax Act, 1961 (the Act) vide intimation dated 08.01.2020. While doing so, 2 ITA No. 982/Coch/2024 Sreejith Velappan Radhamony the CPC had made prima facie adjustment u/s. 143(1) of the Act by disallowing belated remittance of ESI & PF contributions paid after the due date under the respective statutes of Rs. 1,71,37,588/-. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 4. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 5. The learned counsel for the assessee submits that in view of catena of decisions of several Hon'ble High Courts, the delayed remittance of ESI & PF contributions of employees’ within the due date for filing the return of income was allowable as deduction. 6. On the other hand, the learned Sr. DR submits that in view of the decision of the Hon'ble Supreme Court Checkmate Services Pvt. Ltd. vs. CIT [2022] 448 ITR 518 (SC) CPC was justified in making prima facie adjustment by disallowing belated remittance of ESI & PF contributions. She further submits that even before the judgement of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra), the Hon'ble Jurisdictional High Court in the case of CIT v. Merchem Ltd. [2015] 378 ITR 443 and Popular Vehicles & Services Pvt. Ltd. v. CIT [2018] 96 Taxmann.com 13 took a view that deposit of employees’ contribution towards ESI & PF beyond the due date stipulated under the respective statutes but deposited before the due date prescribed u/s. 3 ITA No. 982/Coch/2024 Sreejith Velappan Radhamony 139(1) of the Act for filing the return of income cannot be allowed as a deduction. 7. We have heard the rival contentions and perused the material available on record. The solitary issue that arises for our determination is whether the CPC was justified in making prima facie adjustment by disallowing belated remittance of employees’ contribution of ESI & PF paid beyond the due date prescribed under the respective statutes but deposited before the due date prescribed u/s. 139(1) for filing the return of income. The material facts are not in dispute. No doubt, as on the date of processing of the return of income, decision of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra) was not available. However, the Hon'ble Jurisdictional High Court in the case of CIT vs. Merchem Ltd. reported in 378 ITR 443 held that belated remittance of the employees’ contribution towards ESI & PF paid beyond the due date stipulated under the respective statutes but deposited before the due date for filing the return of income is not allowable for deduction. This decision was subsequently followed by the Hon'ble Jurisdictional High Court in the case of Popular Vehicles & Services Pvt. Ltd. v. CIT [2018] 96 Taxmann.com 13. The appellant is situated in the state of Kerala and falls within the jurisdiction of the Hon'ble Kerala High Court. Therefore, the decision of the Hon'ble Jurisdictional High Court is binding on the CPC as well as the appellate authorities. Therefore, it cannot be said that there is any illegality in the prima facie adjustment made by the CPC, as the claim of the assessee is “incorrect claims” within the meaning section 143(1) of the Act. Thus, we do not find any merit in the appeal filed by the assessee. 4 ITA No. 982/Coch/2024 Sreejith Velappan Radhamony 8. In the result, the appeal filed by the assessee stands dismissed. Order pronounced in the open court on 13th June, 2025. Sd/- Sd/- (SONJOY SARMA) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 13th June, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File Assistant Registrar ITAT, Cochin "