Satya Pratap Singh Kunwar Vs ITO (ITAT Delhi)
Checkmate Faces Checkmate-Checkmate Doesn’t End the Game: Due Date Must Link to Salary Disbursement – ITAT Delhi Restores PF/ESI Disallowance Issue
Delhi Tribunal partly allowed Assessee’s appeal by remanding the issue of PF/ESI contribution disallowance back to AO. Tribunal held that due date for deposit of employees’ contribution should be reckoned from actual salary disbursement month, not merely accrual month, & directed AO to re-verify facts.
Assessee, engaged in security agency business, filed return declaring ₹15.44 lakh. CPC processed return u/s 143(1) & by rectification u/s 154 enhanced income to ₹19.15 lakh, disallowing ₹3.71 lakh u/s 2(24)(x) r.w.s. 36(1)(va) on ground of late PF/ESI deposit. CIT(A)/NFAC (27.06.2024) upheld disallowance citing SC in Checkmate Services Pvt. Ltd. (2022).
Assessee’s Plea
Employees’ contribution was deposited within 15 days from the month in which salary was actually disbursed, hence not late. He relied on Benson Movers Pvt. Ltd. vs. ACIT (ITAT Delhi, 17.11.2023) & Kanoi Paper & Industries Ltd. vs. ACIT (Calcutta ITAT), where such disputes were remanded for factual verification. He urged that mechanical disallowance under intimation u/s 143(1) overlooked the correct due dates.
Revenue’s Stand
Disallowance is squarely covered by Supreme Court in Checkmate Services Pvt. Ltd. (2022), which mandates strict adherence to statutory due dates under PF/ESI laws.
