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Mangatrai, Hyderabad vs. DCIT - (Income Tax Appellate Tribunal) (27 Mar 2024)

If any deposit of ESI/PF contribution made by assessee before due date as contemplated by the parent Act, then said amount is allowable as deduction


Direct Taxation

In present case, Assessee is a partnership firm carrying on business of trading in Gold & silver ornaments and other precious and semi-precious stones under the trade name Mangatrai. The assessee has filed the return of income for A.Y. 2019-20 on 19.09.2019 declaring total income of Rs. 4,25,29,496 and paid tax of Rs. 1,48,6 5,891. The return of income was processed under Section143(1) of the Income Tax Act, 1961 (IT Act). Thereafter, assessee has received an intimation under Section 143(1) of IT Act, making an addition for an amount of Rs.6,53,303 towards belated payment of employees' contribution of PF and ESI as the dates of payments were not appearing in Form 3CD.

The above said addition was made under Section 36(1)(va) of the Income Tax Act, 1961 for not depositing the contributions received from employees towards PF and ESI before the due dates mentioned under PF and ESI Acts. Feeling aggrieved by the intimation under Section 143(1) of the Act, assessee preferred appeal before the learned CIT(A), who granted partial relief to the assessee.

As per the decision of Checkmate Services Pvt. Ltd. Vs. CIT, if any deposit of ESI/PF contribution has been deposited by the assessee before the due date as contemplated by the parent Act i.e, ESI, then the said amount is allowable as deduction. In the present case, it is the case of the assessee that the challan for two months amounting to Rs.1,95,676 were duly deposited with the said authorities and the document to that effect has also been supplied by the assessee to the Revenue.

Present Tribunal remands back the matter to the file of jurisdictional Assessing Officer to verify whether the assessee has deposited the employees contribution under PF before the due date as laid down by the PF Act or not and if on verification, Assessing Officer found that the assessee has deposited the same within the due date, then assessee shall be given the deduction and the Assessing Officer while doing so, shall grant the opportunities of hearing to the assessee in accordance with law. The appeal of the assessee is allowed for statistical purposes.


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