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Arun Polymers , Madurai vs. DCIT - (Income Tax Appellate Tribunal) (30 Nov 2022)

If the employees' contribution to PF and ESI has been paid beyond the time prescribed under the relevant Act, then same is not allowable under Section 43B of the IT Act

MANU/IX/0854/2022

Direct Taxation

The assessee is a partnership firm engaged in the business of manufacturing of plastic products. The Appellant had filed its return of income for assessment year 2018-19 on 29.09.2018, declaring a total income of Rs. 40,72,168. The DCIT (CPC), processed return of income filed by the assessee and issuedintimation under Section 143(1) of the Income-tax Act, 1961 on 03.09.2019 and determined total income of Rs. 56,58,512, by making addition towards disallowance of belated payment of employees' contribution of ESI and PF under Section 36(1)(va) r.w.s. 2(24)(x) of the Act. The assessee carried the matter in appeal before the first appellant authority, but could not succeed. The Learned CIT(A), National Faceless Appeal Centre (NFAC), Delhi, vide their order dismissed the appeal filed by the assessee.

The Hon'ble Supreme Court in the case of Checkmate Services Pvt Ltd vs CIT, has considered an identical issue and held that, if the employees' contribution to PF & ESI has been paid beyond the time prescribed under the relevant Act, then same is not allowable under Section 43B of the Act, even after the payment has been made before the due date of filing return of income under the Income-tax Act. It was further held that such sum will be treated as income of the assessee in terms of section 36(1)(va) read with Section 2(24)(x) of the Act.

Therefore, by respectfully following the Hon'ble Supreme Court decision in the case of Checkmate Services Pvt Ltd vs CIT, present Tribunal is inclined to uphold the findings of the Learned CIT(A) and dismiss the appeal filed by the assessee. Appeal filed by the assessee is dismissed.

Tags : ASSESSMENT   ADDITION   DISALLOWANCE  

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