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2024 Supreme(Online)(ITAT) 1817
INCOME TAX APPELLATE TRIBUNAL (BANGALORE BENCH)
Shri Keshav Dubey, J.M, Shri Chandra Poojari, A.M
Mahantesh H – Appellant
Versus
DCIT, Circe 4(1)(1) – Respondent
ITA No. 874/Bang/2024
For the Appellant: Shri Subramanya Bhat, CA
For the Respondent: Shri V. Parithivel, JCIT-DR
The Tribunal upheld disallowance of delayed employee contributions to provident fund under Sections 36(1)(va) and 143(1) of the Act, reasserting the need for compliance with statutory payment deadlines.
Headnote:(A) Income Tax Act, 1961 - Sections 36(1)(va), 143(1) - The appeal is against the CIT(A)’s Order confirming the addition on delayed employee contributions to the provident fund, amounting to Rs.50,23,277/- - The CIT(A) relied on the judgement in Checkmate Services Pvt. Ltd. v. CIT confirming that delayed contributions are disallowed under Section 36(1)(va) of the Act - It was held that the due date for contributions must align with the PF Act stipulating payments within 15 days of salary disbursement. (Paras 4, 10.1 - 10.14)
(B) Appeals - The Tribunal dismissed the appeal for the lack of merit on the grounds of unsubstantiated claims regarding timings of contributions following legal precedent. (Paras 5, 9)
Facts of the case:
The assessee's return was processed under Section 143(1), leading to disallowed contributions based on an audit report, which the appellant contested as unlawful and erroneous.
Findings of Court:
The appeal was dismissed under the established legal precedent confirming the disallowance of delayed contributions under the Income Tax Act, affirming the CIT(A)'s dismissal of the appeal.
Issues: The primary issues revolved around the legality of the assessment and the timing of provident fund contributions relative to salary payments.
Ratio Decidendi: The Tribunal adhered to the Supreme Court ruling in Checkmate Services emphasizing that employer contributions must meet statutory deadlines, which the appellant failed to substantiate.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. arguments against the adjustment made by the cpc. (Para 2 , 7 , 10) |
| 2. claim regarding disallowance of employee contribution to pf. (Para 3 , 4) |
| 3. decision of the cit(a) reaffirmed based on supreme court ruling. (Para 5) |
| 4. overview of legal requirements under income tax and pf acts. (Para 8 , 9) |
ORDER
Per: Keshav Dubey, J.M
This appeal at the instance of the assessee is directed against the Addl. JCIT(A)’s Order dated 04.01.2024 passed under Section 250 of the Income Tax Act, 1961 (the Act) in respect of Assessment Year (AY) 2021-22.
2. The assessee has raised the following grounds of appeal: -
“1) The order passed by the learned Commissioner of income tax (Appeals) NFAC, u/s 250 of the Income Tax Act in so far as it is against the Appellant is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the Appellant's case.
2) The appellant denies himself liable to be assessed to a total income of Rs.69,76,510/-against the returned income of Rs. 19,53,230/- on the facts and circumstances of the case.
3) The appellant denies himself to be liable to the disallowances of Rs.50,23,277/- under section 36(1)(va) of the Act on the fact and circumstances of the case.
4) The learned CIT(A) failed to appreciate that the intimation issued under section 143(1) of the Act was bad in law, since adjustment made was beyond the scope of the Act, on the facts and circumstances of the case.
5) The learned CIT(A) failed to appreciate that clause 38 of the employee provident fund scheme which states that "due date for contribution to employee provident fund should be 15 days from end of the month actual disbursement of wages is made" on the facts and circumstances of the case.
6) The learned CIT(A) failed to appreciate that the PF and ESI contributions were remitted before the due date of filing return of income stipulated under section 139(1) of the Act and accordingly, no addition was warranted on the facts and circumstances of the case.
7) The appellant craves leave to add, alter, modify, delete or substitute any or all of the grounds, to file detailed written submissions and to file a paper book at the time of hearing the appeal.
8) In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed and appropriate relief may be granted in the interest of justice and equity.”
3. The brief facts of the case are that the assessee being an individual, filed his return of income for the impugned assessment year 2021-22 on 31.03.2022 declaring total income Rs. 19,53,230/-. The said return was processed u/s. 143(1) of the Act dated 21.11.20222 wherein adjustments u/s. 143(1)(a) was retained on the alleged ground that the disallowance of expenditure indicted in the audit report is not taken into account in computing the total income in the return u/s. 143(1)(a)(iv) of the Act amounting to Rs.50,23,277/-. Aggrieved by the order of the CPC, Bengaluru passed u/s. 143(1) of the Act the assessee preferred an appeal before the CIT(A) by raising the following issues: -
i. The CPC was not justified in making the addition on contribution to Provident Fund and other funds of Rs.59.23,277/-
ii. Interest u/s. 234 of the Act.
4. The ld. CIT(A), on the other hand, relying of the judgement of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. v. CIT in Civil Appeal No. 2830 to 2833 of 2016 and 159 of 2019 dated 12.10.2022 and keeping in view the amendment made by Finance Act, 2021 in s. 36 and s.43B of the Act confirmed the addition made on account of delayed payment of employees’ contribution to PF and ESI of Rs.50,23,277/- and accordingly dismissed the appeal. Aggrieved by the order of the ld. CIT(A) the assessee has filed the present appeal before the Tribunal.
5. The assessee filed a paper book comprising 50 pages as well as appeal memo comprising 43 pages enclosing therein the following: -
i. Copy of Audit Report for
