9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 1515 - AT - Income TaxDisallowance u/s 36(1)(va) - delayed deposit of employees contribution of PF/ESI - as per DR assessee is not entitled to deduction u/s 36(1)(va) and 43B if such funds are not credited to relevant funds on or before the due date as per the relevant Act - HELD THAT - We find that Hon ble Supreme Court in the case of Checkmate Services Pvt. Ltd. 2022 (10) TMI 617 - SUPREME COURT has held that the contribution by the employees to the relevant funds is the employer s income u/s 2(24)(x) of the Act and the deduction for the same can be allowed only if such amount is deposited in the employee s account in the relevant fund before the date stipulated under the respective Acts. Thus the deduction u/s 36(1)(va) of the Act can be allowed only if the employees share in the relevant funds is deposited by the employer before the due date stipulated in respective Acts. We find that identical issue of disallowance of delayed deposit of PF/ESI dues in the intimation issued u/s 143(1) of the Act arose before the Pune Bench of Tribunal in the case of Cemetile Industries 2022 (12) TMI 354 - ITAT PUNE . CIT(A) was not justified in deleting the addition made in the intimation issued u/s 143(1) of the Act. We accordingly set aside the order of CIT(A) and thus the grounds of Revenue is allowed.
Issues Involved:
1. Disallowance of delayed deposit of employees' contribution to PF/ESI under Section 36(1)(va) of the Income Tax Act, 1961. 2. The applicability of Section 43B of the Income Tax Act, 1961 in the context of delayed deposits. 3. The scope of adjustments permissible under Section 143(1) of the Income Tax Act, 1961. Issue-wise Detailed Analysis: 1. Disallowance of Delayed Deposit of Employees' Contribution to PF/ESI: The primary issue in this case is the disallowance of Rs. 4,67,11,644/- due to the delayed deposit of employees' contribution towards provident fund (PF) and employees' state insurance (ESI). The Assessing Officer (AO) disallowed the deduction under Section 36(1)(va) as the deposits were made after the due date stipulated under the respective Acts. The CIT(A) deleted this addition, allowing the deduction as the deposits were made before the due date of filing the return under Section 139(1) of the Income Tax Act, 1961. However, the Revenue appealed against this decision, arguing that the deduction is not permissible if the deposits are made after the due date specified under the respective Acts, irrespective of the date of filing the return. 2. Applicability of Section 43B: The assessee contended that the payments made before the due date of filing the return under Section 139(1) should be allowed as a deduction under Section 43B. The CIT(A) accepted this argument. However, the Revenue cited the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT, which clarified that the deduction under Section 36(1)(va) is permissible only if the employees' contributions are deposited before the due date stipulated under the respective Acts, and Section 43B does not extend this deadline. 3. Scope of Adjustments under Section 143(1): The Revenue argued that the adjustment made by the AO under Section 143(1) was valid as it was based on the audit report indicating the delayed deposit. The Tribunal agreed with this view, referencing the Pune Bench's decision in Cemetile Industries vs. ITO, which upheld similar adjustments. The Tribunal noted that the audit report clearly indicated the due dates and the actual dates of payment, thus justifying the disallowance under Section 143(1)(a)(iv) as an "indication in the audit report." Conclusion: The Tribunal concluded that the CIT(A) erred in deleting the addition made by the AO. It held that the deduction under Section 36(1)(va) is allowable only if the employees' contributions are deposited before the due date specified under the respective Acts, and Section 43B does not override this requirement. The Tribunal also upheld the validity of the adjustment under Section 143(1), as the audit report provided a clear indication of the delayed deposit. Consequently, the Tribunal set aside the CIT(A)'s order and allowed the Revenue's appeal. Order: The appeal of the Revenue is allowed, and the order of the CIT(A) is set aside. The Tribunal pronounced the order in the open court on 29.03.2023.
|
