2022 (12) TMI 924 - AT - Income Tax

Employees Contribution of Provident Fund and Employees State Insurance (PF ESI) - disallowance made u/s. 36(1)(va) - HELD THAT - Grounds taken by the assessee have come to rest by the recent verdict in Chekmate Services Pvt. Ltd. 2022 (10) TMI 617 - SUPREME COURT wherein it has been held that deduction u/s 36(1)(va) in respect of delayed deposit of amount collected towards employees contribution to PF cannot be claimed when deposited within the due date of filing of return even when read with Section 43B of the Income-tax Act,1961. Thus grounds taken by the assessee are dismissed.

Summary

Issues:
- Condonation of delay in filing appeal before the Tribunal.
- Disallowance under section 36(1)(va) related to delay in deposit of Employees' Contribution of Provident Fund and Employees State Insurance (PF & ESI).

Condonation of Delay:
The appeal before the Appellate Tribunal arose from the order of the Ld. CIT(A)-4, Kolkata, against the assessment order passed under section 154/143(3) of the Income-tax Act, 1961. The registry pointed out a delay of 1612 days in filing the appeal, with a petition for condonation of delay citing the pending rectification application as the reason for the delay. The Tribunal noted that the assessee had kept the appeal pending awaiting rectification of the order by Ld. CIT(A), which was not rectified despite efforts. The Tribunal, while disapproving of the approach, decided to condone the delay and admitted the appeal for adjudication, emphasizing the need to file appeals within the permissible limitation period, pursue rectification separately, and take up matters in appeal if needed.

Disallowance under Section 36(1)(va):
The grounds of appeal related to disallowance under section 36(1)(va) concerning the delay in depositing Employees' Contribution of Provident Fund and Employees State Insurance. The Tribunal referred to a recent Supreme Court verdict in Chekmate Services Pvt. Ltd. Vs. CIT, where it was held that deduction under section 36(1)(va) for delayed deposits cannot be claimed if deposited within the due date of filing the return, even when read with Section 43B of the Income-tax Act, 1961. The judgment analyzed the distinction between employers' contribution and employees' contribution, emphasizing the conditions for deduction under section 36(1)(va) and the significance of timely deposits. Consequently, the Tribunal, following the Supreme Court decision, dismissed the appeal of the assessee as the grounds taken were covered by the said judgment.

In conclusion, the Appellate Tribunal, Kolkata, addressed the issues of condonation of delay in filing the appeal and the disallowance under section 36(1)(va) related to delayed deposits of Employees' Contribution of Provident Fund and Employees State Insurance. The Tribunal allowed the appeal for adjudication after condoning the delay, emphasizing the importance of timely filing of appeals and separate rectification processes. Furthermore, the Tribunal dismissed the appeal of the assessee concerning the disallowance under section 36(1)(va) based on a recent Supreme Court judgment that clarified the conditions for claiming deductions in such cases.