The Income Tax Appellate Tribunal (ITAT), Cuttack Bench has ruled that the delayed payment in respect of employees contribution to PF and ESI is not allowable.
The issue involved in the appeal was delayed payment of PF and ESI in respect of employees contribution.
The Supreme Court in the case of Checkmate Services Pvt Ltd vs CIT in Civil Appeal No.2833 of 2016 dated 12.10.2022, has categorically held that if the employees contribution to PF and ESI has been paid beyond the time prescribed under the relevant PF Act, then same is not allowable under section 43B even after the payment has been made before the due date of filing of return under the Income tax Act.
It was the submission that the amount of employees contribution to PF and ESI, which has not been paid within the due date as prescribed under the relevant Act, has been held by Hon’ble Supreme Court to be not allowable u/s.36(1)(va) of the Act. The Supreme Court has also categorically held that the provisions of section 43B would not apply to the employees’ contribution to PF and ESI.
While relying on the decision of the supreme court the bench of George Mathan (Judicial Member) and Arun Khodpia (Accountant Member) has held that the provisions of section 43B would not apply to the provisions of section 36(1)(va) of the Act in respect of employees contribution.
The tribunal restored the issue to the file of the AO for re-adjudication after granting the assessee adequate opportunity of being heard.
Case: M/s. BBG Metal Syndicate Pvt ltd. Vs. DCIT, ASMNT Circle 2(1), Cuttack
Citation: ITA No.112/CTK/2022
Date of Decision: 17/11/2022