Hisar Metal Industries Ltd. Vs DCIT (ITAT Delhi)
Debatable PF/ESI disallowance cannot be adjusted under Section 143(1) prior to Supreme Court’s Checkmate ruling dated 12.10.2022
The assessee faced disallowance of employees’ PF and ESI contributions u/s 36(1)(va) during processing of returns under Section 143(1). Though payments were made beyond statutory due dates, they were deposited before the due date of filing the return.
The Tribunal noted that, at the time of intimation, the issue was highly debatable with divergent High Court views. Since the Supreme Court’s ruling in Checkmate Services (12.10.2022) came later, such adjustments were beyond the scope of Section 143(1). The additions were therefore unsustainable.
FULL TEXT OF THE ORDER OF ITAT DELHI
We propose to decide these appeals by a common order as the assessee is the same and the impugned order is also even dated 14.07.2022 for AYs 2018-19 and 2019-20, and the issue involved are also identical and similar. These appeals are instituted against separate order of even date 14.07.2022 for AYs 2018-19 and 2019-20 wherein the disallowance made by the AO u/s 143(1) by way of adjustment in the intimation for delayed payment of Employee’s Contribution by the assessee towards PF & ESI u/s 36(1)(va) of the Act was confirmed and the appeal was dismissed. In ITA No. 2244/Del/2022 for AY 2018-19 is taken as the lead case.
