ATC Precision Components Pvt Ltd. Vs. ACIT - (Income Tax Appellate Tribunal) (12 May 2023)
Deduction under Section 36(1)(va) of the IT 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
Assessee is a company stated to be engaged in the business of manufacturing of components for automobile industry. Assessee electronically filed its return of income declaring total income of Rs.2,06,67,150. In the intimation issued under Section 143(1) of the Income Tax Act, 1961 (IT Act), the total income was computed at Rs.2,08,46,560. Aggrieved by the intimation issued under Section 143(1) of the IT Act, assessee carried the matter before CIT(A) who vide order dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal.
From the appeal filed by the assessee, it is seen that, though the assessee has raised several grounds but the sole grievance of the assessee is with respect to the addition of Rs.1,79,407 made under Section 36(1)(va) of the Act. It is the contention of the assessee that, though there was delay in depositing the employees contribution to PF and ESI before the due date prescribed but however all the dues have been deposited with the appropriate authorities before the filing of return of income and therefore, no disallowance under Section 36(1)(va) of the IT Act is called for.
The issue in the present ground is with respect to the disallowance of delayed deposit of employee's contribution of PF & ESI in the intimation passed under Section 143(1) of the Act. Supreme Court in the case of Checkmate Services Pvt. Ltd. and others vs. CIT and others has held that, the contribution by the employees to the relevant funds is the employer's income under Section 2(24)(x) of the IT 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 under Section 36(1)(va) of the IT 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.
In view of the decision of Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. vs. CIT and others, there is no reason to interfere with the order of lower authorities and thus the grounds of assessee are dismissed. Appeal of assessee is dismissed.
Tags : ASSESSMENT DISALLOWANCE LEGALITY