2022 (10) TMI 534 - AT - Income Tax

Addition u/s.36(1)(va) on the ground of belated payments - EPF contributions and that of ESIC were deposited delayed - HELD THAT - It is pertinent to note that the Hon ble Jurisdictional High Court 2014 (1) TMI 502 - GUJARAT HIGH COURT has categorically observed that Employees Contribution to the EPF and ESIC deposit s beyond the due date prescribed under Section 36(10(va) of the Act would not be eligible for deduction under Section 43B of the Act even after depositing before the due date of filing of tax return. The issue contested by the assessee in the present appeal is squarely covered by the decision of Hon ble Jurisdiction High Court against the assessee. Hence, appeal filed by the assessee is dismissed.

Summary

Issues Involved:
Appeal against order upholding addition of Rs.6,31,641 under section 36(1)(va) for AY 2018-19.

Detailed Analysis:

1. Grounds of Appeal by Assessee:
- Assessee appealed against the order dated 01.08.2021 passed by the CIT(A), NFAC, Delhi for AY 2018-19.
- Grounds raised include challenge to the addition of Rs.6,31,641 made by AO under section 36(1)(va) as illegal and against natural justice.
- Assessee contended that the addition was confirmed by NFAC on the ground of belated payments, which was erroneous.
- Assessee argued that EPF and ESIC contributions were deposited within prescribed time limits under respective laws, hence not belated payments.

2. Assessee's Business and Assessment:
- Assessee is engaged in providing placement services and maintaining payroll for clients to reduce compliance burden.
- E-filed return of income on 29.08.2018 declaring total income as nil.
- AO made addition of Rs.6,31,641 for alleged belated payments of PF and ESIC.

3. Appeal and Dismissal by CIT(A):
- Assessee filed appeal before CIT(A) against assessment order.
- CIT(A) dismissed the appeal, leading to further appeal by the assessee.

4. Non-Appearance of Assessee:
- During the hearing, no one appeared on behalf of the assessee.
- Notice was served but returned as the assessee had left the premises without providing a new address.
- Proceedings based on submissions in CIT(A) order.

5. Legal Arguments and Precedents:
- Ld. DR cited decisions of Jurisdictional High Court and Delhi High Court to support the case against the assessee.
- Cited case law established that EPF and ESIC contributions beyond due date are not eligible for deduction under Section 43B of the Act.
- The issue contested by the assessee was held to be covered by adverse decisions of Jurisdictional High Court.

6. Decision and Dismissal of Appeal:
- The Tribunal heard the arguments and reviewed all relevant materials.
- Noted that the issue raised by the assessee was squarely covered by adverse decisions of the Jurisdictional High Court.
- Consequently, the appeal filed by the assessee was dismissed.

7. Final Order:
- The appeal of the assessee was dismissed, affirming the addition of Rs.6,31,641 under section 36(1)(va) for AY 2018-19.
- The order was pronounced in open court on 30th September 2022.