Checkmate Services Pvt. Ltd Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that disallowance of delayed payment of employees’ contribution to EPF and ESI in terms of section 143(1) of the Income Tax Act can be made based on auditor’s observation. Accordingly, disallowance upheld.
Facts- The assessee had filed return of income on 11.10.2018 declaring total income of Rs. 9,38,37,480/-. The return of income was processed by CPC, Bengaluru and intimation u/s. 143(1) of the Act dated 24.12.2019 was issued after making adjustments / increase in income of Rs. 4,20,77,998/- on account of delay in deposit of employees’ contribution to PF and ESI by reference to Tax Audit Report filed by the assessee. CIT(A) confirmed the adjustments / increase of income by relying upon the Hon’ble Supreme Court decision in the case of Checkmate Services Pvt. Ltd. The assessee is in appeal before us against the aforesaid addition confirmed by the Ld. AO.
Conclusion- In the case of Guntubolu Uma Sai Prasad 154 taxmann.com 655 (Visakhapatnam – Trib.), the ITAT held that disallowance can be made under Section 143(1)(a) towards employees’ contribution to EPF and ESI where assessee made payment towards employees’ contribution to EPF and ESI beyond due date prescribed under respective Acts.
