Animesh Mukherjee Vs ITO (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT), Kolkata Bench, has partially allowed the appeals filed by Animesh Mukherjee, an electrical contractor, for the assessment years 2018-19 and 2019-20. The Tribunal has remanded the core issue—disallowance of the employee’s contribution to Provident Fund (PF) and Employees’ State Insurance (ESI)—back to the Assessing Officer (AO) for limited verification of payment dates.
The dispute arose after the Central Processing Centre (CPC)/AO processed the assessee’s returns under Section 143(1) of the Income-tax Act, 1961. The authorities disallowed the employee contributions to PF and ESI under Section 36(1)(va) read with Section 43B and Section 2(24)(x) for alleged belated payments made beyond the due dates specified under the respective PF and ESI Acts. The AO’s adjustment was primarily based on discrepancies reported in the Tax Audit Report (Form 3CD), which provided details of the due dates and actual payment dates. The Ld. CIT(A), Gurugram, confirmed the disallowances for both years, relying heavily on a recent Supreme Court judgment.
Judicial Precedent Overrules Due Date Argument
The assessee challenged the disallowance on several grounds, including a legal argument that the due date for payment should be reckoned from the month the salary is paid, not the month for which it is due, citing earlier ITAT rulings from Mumbai (The Master Polishers) and Kolkata (Kanoi Paper & Industries Ltd.). The assessee also contended that such adjustments could not be made in a summary proceeding under Section 143(1) and that mandatory communication was not issued prior to the adjustment.
