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2023 (3) TMI 1040 - AT - Income TaxDelayed payment of employee s contribution to provident fund u/s 36(1)(va) - order passed under section 154 - HELD THAT - We find that the Hon ble Supreme Court in Checkmate Services (P.) Ltd. 2022 (10) TMI 617 - SUPREME COURT held that payment towards employee s contribution to provident fund after the due date prescribed under the relevant statute is not allowable as deduction u/s 36(1)(va). In the present case, the assessee deposited employees contribution to provident fund after the due date for payment as provided under the relevant statute, and accordingly the same was disallowed under section 36(1)(va) of the Act vide intimation issued under section 143(1) Issue arose from the order passed u/s 154 and not from the intimation issued under section 143(1) of the Act. The view taken by the ADIT, CPC under section 154 is in consonance with the law laid down by the Hon ble Supreme Court in Checkmate Services (P.) Ltd. (supra), and therefore the claim of deduction towards employee s contribution to PF ESI made by the assessee becomes an incorrect claim under section 143(1) -Appeal by the assessee is dismissed.
Issues:
The appeal challenges the order passed under section 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals), arising from an order under section 154 for the assessment year 2018-19. Ground I: The appellant contested the addition made by the Assistant Director of Income Tax, CPC, arguing that there were no clerical or technical discrepancies in the return filed, and all disallowances were already added back to the income. The appellant claimed that the amount mentioned in the tax audit towards the PF amount was mere disclosure, not disallowance. The appellant asserted that no addition could be made under section 143(1) without discrepancies in the return. The appellant argued that the amount added to the income was a disallowance in nature and could not be made without assessment. The appellant sought deletion of the disallowance made under section 154. Ground II: The appellant challenged the disallowance of Rs. 10,73,794 for late payment of PF dues under section 36(1)(va) of the Act, contending that the payments were deposited before the due date of filing the return. The appellant requested deletion of the disallowance amount. The appeal was delayed by 330 days, with the appellant seeking condonation of delay due to not receiving the impugned order. The Departmental Representative argued that the delay issue was academic due to a Supreme Court decision. The Authorized Representative explained the circumstances of not receiving the order but agreed that if the issue was in favor of the Revenue, the delay issue would be academic. The only grievance of the appellant was against disallowance on account of delayed payment of employee's contribution to provident fund under section 36(1)(va) of the Act. The appellant's return was processed under section 143(1), resulting in a disallowance of Rs. 10,73,794 for delayed PF payment. The rectification application was dismissed without relief, leading to the appeal before the Tribunal. During the hearing, the appellant cited a Tribunal decision to support their argument that no disallowance under section 36(1)(va) could be made via section 143(1)(a) intimation post a Supreme Court ruling. The Tribunal considered the Supreme Court ruling, which clarified that payment after the due date is not deductible under section 36(1)(va) of the Act. As the appellant deposited the PF contribution after the due date, the disallowance was upheld under section 36(1)(va). The Tribunal found no infirmity in the order passed by the Commissioner of Income Tax (Appeals), dismissing the appeal. Given the Supreme Court decision favoring the Revenue, the application for condonation of delay required no separate adjudication. Consequently, the appeal by the appellant was dismissed.
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