Bansi Agrawal Vs ACIT (ITAT Raipur)
Delayed Employees’ PF/ESI Contribution Disallowed Post-Checkmate: ITAT Raipur Upholds Addition
The Raipur Bench of the ITAT dismissed the assessee’s appeal for AY 2018-19, upholding the disallowance of employees’ contribution to PF/ESI that was deposited beyond the due dates prescribed under the respective labour laws. The Tribunal relied squarely on the Supreme Court’s ruling in Checkmate Services (P) Ltd. v. CIT (2023) 6 SCC 451, holding that such delayed deposits are deemed income of the employer and not allowable as deduction under section 36(1)(va) read with section 43B.
The assessee had admitted the delay in the tax audit report. The ITAT clarified that Checkmate applies retrospectively, as it declares the correct legal position, and is binding under Article 141. The Tribunal distinguished the Chhattisgarh High Court decision in Raj Kumar Bothra (2025), noting it pertained to a 143(1)(a) intimation when the issue was still debatable, whereas post-Checkmate the law is settled.
Reiterating the rationale in Checkmate, the ITAT emphasized that employees’ contributions are held in trust by the employer and must be deposited within statutory due dates to qualify for deduction; the non-obstante clause of section 43B does not relax this condition for employees’ share. Accordingly, the addition was sustained and the appeal dismissed.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
