Disallowance of Payment for PF & ESI Employee Contributions Beyond Due Date (Section 36(1)(va))

Rishabh Metals and Chemicals Private Limited Vs DCIT (ITAT Mumbai)

ITAT Mumbai held that payment on account of employees contribution towards PF and ESI after the due date of the respective acts is disallowable in terms of section 36(1)(va) of the Income Tax Act.

Facts- The Assessee has challenged the disallowance of ₹.4,00,168/- being payment of Provident Fund and ESI, u/s.36(1)(va) of Income-tax Act, 1961.

The Assessee in the return of income filed on 09.02.2021 had declared total income of ₹.2,04,98,240/-. The said return was processed online by CPC Bangalore and accordingly, adjustment of ₹.4,00,168/- was made in the intimation u/s.143(1) on account of late payment of employee contribution towards PF & ESI. The contention of the Assessee has been that payments have not been made within the due date of 15 day of next months as per the respective Act but made much before the due date of filling of return income.

CIT(A) justified the disallowance made as per provisions of section 143(1)(a)(iv) of the Act. Being aggrieved, the present appeal is filed.

Please become a Premium member. If you are already a Premium member, login here to access the full content.