Kamakshi Jute Industries Ltd Vs DCIT, CPC, Bengaluru (ITAT Kolkata)
PF/ESI Delay to Be Rechecked in Light of Payment Dates & Checkmate SC Ruling – ITAT Kolkata; PF/ESI Deduction Partly Allowed – ITAT Kolkata Highlights Salary Payment Dates; ITAT Kolkata Orders Fresh Examination of PF & ESI Contributions
Assessee, Kamakshi Jute Industries Ltd., filed an appeal against NFAC order dated 28.11.2022 confirming adjustment u/s 143(1) made by CPC, Bengaluru, disallowing ₹37.68 lakh towards delayed deposit of employees’ PF & ESI contributions u/s 36(1)(va) r.w.s. 2(24)(x) & 43B.
Assessee contended that the contributions were deposited before the due date of filing return u/s 139(1) & hence deductible. CIT(A) rejected the claim relying on the Supreme Court ruling in Checkmate Services (P) Ltd. v. CIT (143 taxmann.com 178), holding that employees’ contributions must be deposited within the due dates under respective PF/ESI Acts, not merely before return filing.
Before ITAT, Assessee argued that as per Section 38 of the EPF Scheme, 1952, the due date should be computed from the date of actual payment of salary & not when salary becomes due. Relying on Payal Enterprise v. DCIT (ITA No.1203/KOL/2024) & Kanoi Paper & Industries Ltd. v. ACIT (75 TTJ 448 Cal), it was contended that when salaries for a month are paid in the next month, the corresponding PF/ESI dues deposited within 15 days of that payment are within time.
