Gurdev Singh Vs ITO (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) Delhi bench heard an appeal filed by Gurdev Singh against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, dated 6 June 2024, for Assessment Year (AY) 2020–21.
The only issue raised in the appeal was the disallowance of ₹12,91,486 under Sections 36(1)(va) read with Section 2(24)(x) and Section 43B of the Income Tax Act, 1961, for the delayed payment of employees’ contributions to the Employees’ State Insurance Corporation (ESIC) and Employees’ Provident Fund (EPF).
The assessee’s counsel, Shri Hemant Jain, submitted that the Centralized Processing Centre (CPC) processed the return of income under Section 143(1) on 15 February 2021. He argued that adjustments under Section 143(1)(a)(iv) can be made only for disallowances that are specifically indicated in the tax audit report but not accounted for in the return of income. In this case, the tax auditor had not made any such recommendation. The auditor had merely disclosed the due dates and actual dates of deposit of employees’ contributions under ESIC and EPF without suggesting any disallowance.
The counsel further contended that the CPC disallowed the sum solely based on the observations in the auditor’s report, even though all employee contributions were deposited before the due date for filing the return under Section 139(1). He relied on several tribunal decisions where similar disallowances were deleted and argued that the decision of the Supreme Court in Checkmate Services (P.) Ltd. v. CIT [143 taxmann.com 178 (SC)] should not apply, as that case pertained to an assessment under Section 143(3), not a summary processing under Section 143(1).
