2019 (10) TMI 988 - AT - Income Tax

Disallowance of ESI PF Contribution due to delay in deposit - It was claimed that, Employees Contribution was deposited before the due date on filing of return. - HELD THAT - We have also gone through the various documentary evidences furnished by assessee from the record. We find that the assessee while computing the total income for A.Y. 2010-11 has disallowed being ESI and PF Contribution being paid after due date but before the date of filing return of income. We find that similar addition was made in A.Y. 2009-10 and on appeal before the CIT(A), the addition/disallowance was deleted. Therefore, considering the fact that assessee claimed that the Employees Contribution was deposited before the due date on filing of return. Therefore, we direct the Assessing Officer to verify the facts about the deposits of Employees Contribution, if the same was deposited before the due date and grant relief to the assessee by following the decision of Hon ble Bombay High Court in Ghatge Patil Transporters Ltd. 2014 (10) TMI 402 - BOMBAY HIGH COURT

Summary

Issues:
1. Disallowance under section 43B for non-payment of service tax.
2. Disallowance under section 36(v)(ia) for delay in filing ESI & PF Contribution.

Issue 1: Disallowance under section 43B for non-payment of service tax:
- The appellant challenged the disallowance made under section 43B for non-payment of Gujarat VAT service tax.
- The appellant argued that service tax was not applicable during the relevant period and provided a reconciliation as part of the tax audit report.
- The Assessing Officer and CIT(A) upheld the disallowance, stating that the amount was collected but not paid to the Gujarat VAT authority.
- The Tribunal directed the Assessing Officer to reexamine the reconciliation and grant an opportunity to the assessee before passing a new order.

Issue 2: Disallowance under section 36(v)(ia) for delay in filing ESI & PF Contribution:
- The appellant contested the disallowance under section 36(v)(ia) for delay in filing ESI & PF Contribution.
- The appellant argued that although there was a delay, the contributions were made before the due date of filing the return.
- The Tribunal referred to a Bombay High Court decision and directed the Assessing Officer to verify if the contributions were deposited before the due date and grant relief accordingly.

In the case concerning Assessment Year 2007-08, the Tribunal allowed the appeal for statistical purposes, directing a reexamination of the disallowance under section 43B for non-payment of service tax. For Assessment Year 2010-11, the Tribunal allowed the appeal regarding the disallowance under section 36(v)(ia) for delay in filing ESI & PF Contribution, instructing the Assessing Officer to verify the timely deposits based on a relevant court decision. The judgments provided detailed analysis and legal reasoning for each issue, ensuring a fair consideration of the appellant's arguments and applicable laws.