2023 (3) TMI 330 - AT - Income Tax

Delayed employee s contribution of Provident Fund and Employee State Insurance - HELD THAT - Since the issue is already covered in favour of the Revenue by the recent decision of the Hon ble Supreme court in the case of Checkmate Services Pvt. Ltd vs CIT 2022 (10) TMI 617 - SUPREME COURT we proceed to dispose of this appeal by hearing the ld. DR and perusing the materials available on record. It is not in dispute that the employees contribution to PF and ESI were deposited by the assessee to the Government account beyond the due dates prescribed under the respective acts but well before the due date of filing of return of income u/s. 139(1) - Decided against assessee.

Summary

Issues: Whether the deletion of disallowance made on account of employee's contribution to Provident Fund and Employee State Insurance by the ld. CIT(A) was justified.

Analysis:
1. The appeal in ITA No. 3270/Mum/2022 for A.Y.2018-19 was filed against the order of assessment passed by the ld. Dy. Commissioner of Income Tax-CPC under section 143(1) of the Income Tax Act, 1961.

2. The main issue in this appeal was whether the ld. CIT(A) was correct in deleting the disallowance of employee's contribution to Provident Fund and Employee State Insurance.

3. The Tribunal noted that the recent decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd vs CIT had settled the issue in favor of the Revenue. The Court emphasized the distinction between an employer's contribution and the amounts deducted from employees' income, holding that the employee's contributions must be deposited on or before the due date to qualify for deduction.

4. The assessee relied on a previous decision by a Co-ordinate Bench of the Tribunal, but the Tribunal found that the decision was no longer valid in light of the Supreme Court's ruling. Therefore, the claim of deduction towards employee's contributions was considered incorrect and the appeal was dismissed.

5. Ultimately, the Tribunal dismissed the appeal of the assessee based on the decision of the Hon'ble Supreme Court and upheld the deletion of disallowance made by the ld. CIT(A).

This detailed analysis of the judgment highlights the key legal arguments, the relevant legal provisions, and the reasoning behind the decision, providing a comprehensive understanding of the case.