Delhi ITAT Upholds PF/ESI Disallowance in U/s 143(1) Processing; Income-tax Act, 2025 Relief Held Prospective

MI2C Business Enterprises Pvt. Ltd. Vs DCIT (ITAT Delhi)

Delhi ITAT Upholds PF/ESI Disallowance in U/s 143(1) Processing; Income-tax Act, 2025 Relief Held Prospective

The Delhi ITAT held that employees’ contribution to PF/ESI deposited beyond the due dates prescribed under the respective welfare laws is liable for disallowance under section 36(1)(va) even where the amounts were deposited before the due date for filing the return of income. The Tribunal upheld the CPC’s adjustment made while processing returns under section 143(1) for AYs 2017-18 to 2019-20.

The assessee argued that such an adjustment could not be made under section 143(1) since the issue was debatable at the relevant time and was covered in its favour by Delhi High Court decisions such as AIMIL Ltd. The Tribunal rejected the contention, relying on the Delhi High Court decision in Woodland (Aero Club) Pvt. Ltd., which held that disallowance under section 36(1)(va) can validly be made in processing under section 143(1). The Tribunal observed that the Supreme Court’s ruling in Checkmate Services Pvt. Ltd. authoritatively settled the law that employees’ contributions deposited after the statutory due dates are not deductible.

The Tribunal further held that the benefit introduced under Section 29(1)(e) of the Income-tax Act, 2025, allowing deduction where employee contributions are deposited before the due date of filing the return, is prospective from 01.04.2026 and cannot be applied to earlier assessment years. According to the Tribunal, had Parliament intended to dilute the effect of the Supreme Court’s ruling in Checkmate Services, it would have expressly granted retrospective effect.

On the issue of determining the PF/ESI due date, the Tribunal held that the due date must be reckoned with reference to the month in which the salary becomes due and not the month in which salary is actually disbursed. Since the tax auditor had itself reported delays in Clause 20(b) of the Tax Audit Report, the CPC was justified in making the adjustment while processing the return.

However, the Tribunal accepted the assessee’s contention that once the CIT(A) had examined the matter on merits, the delay in filing the appeal stood impliedly condoned and the appeal could not thereafter be dismissed solely on limitation grounds. Nevertheless, on merits the disallowance was sustained.

FULL TEXT OF THE ORDER OF ITAT DELHI

These captioned three appeals have been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-2, ADDL/JCIT, Kolkata (hereinafter referred as ‘CIT(A)’) order dated 08.12.2025 arising from the assessment order under section 143(1) of the Act dated 15.03.2019 for the A.Y. 2017-18, order under section 143(1) of the Act dated 12.01.2020 for the A.Y. 2018-19 and order under section 143(1) of the Act dated 07.05.2020 for the A.Y. 2019-20 by the CPC, ITD, Bangaluru.

2. Since the above captioned three appeals were heard together and facts in issues and grounds (except amounts) are identical, all the three appeals are being disposed of by this common order for the sake of convenience and brevity

3. Grounds of appeal filed by the Assessee in ITA No.1361/Del/2026 are as under :

1. That the DCIT, CPC, Bengaluru erred in law and on facts in making and sustaining the disallowance of followings:-

Employee and employers contribution to PF/ESI amounting to 4,33,11,513/-, despite the same having been deposited before the due date of filing the return of income under section 139(1), rendering the addition wholly unsustainable.

2. That no adjustment under section 36(1)(va) could have been made while processing the return under section 143(1)(a), as such disallowance does not fall within the scope of permissible prima facie adjustments and was a debatable legal issue at the time of processing.

3. That the impugned adjustment under section 143(1)(a)(iv) was made mechanically, solely on the basis of Clause 20(b) of the Tax Audit Report, which merely reports factual particulars and does not authorize automatic disallowance of a debatable issue of law.

4. That the CPC exceeded its limited jurisdiction under section 143(1)(a), as what may be examined in scrutiny assessment under section 143(3) cannot be adjudicated at the stage of summary processing, rendering the adjustment void ab initio.

5. That the adjustment made constitutes a mistake apparent from record and is rectifiable under section 154, being contrary to the express mandate and limitations prescribed under section 143(1)(a).

6. That once the Ld. CIT(A) examined and adjudicated the merits of the case, the appeal stood impliedly admitted, and thereafter dismissal solely on the ground of delay is legally unsustainable and violative of the principles of natural justice.

7. That the impugned interpretation and application of sections 36(1)(va) read with section 2(24)(x) of the Income-tax Act, 1961 is violative of Articles 14, 19 and 21 of the Constitution of India, as it imposes an arbitrary, unreasonable and disproportionate restriction on the assessee’s fundamental right to carry on business.

8. That denying deduction of employees’ contribution while extending the benefit of section 43B to employer’s contribution, despite both being deposited before the due date of filing return, creates an unreasonable and hostile discrimination lacking intelligible differentia and rational nexus, thereby violating Article 14 of the Constitution.

9. That treating a marginal, technical or unintentional delay in depositing employees’ contribution at par with long, deliberate and mala fide defaults, without examining the nature, duration or intent of delay, violates the Doctrine of Proportionality, which mandates that fiscal measures must not be excessive or punitive beyond necessity.

10. That the DCIT CPC Bengaluru erred both in law and facts by disallowing the employee’s contribution EPF/ESI. Hence same is allowable deduction u/s. 37(1) as laid down by Hon’ble Supreme court (S.C) in the case of Travancore Titanium product ltd. 1966 AIR 1250.

11. That denial of deduction despite bona fide deposit before the return filing due date, and in absence of any allegation of misuse or diversion of funds, is manifestly arbitrary, oppressive and disproportionate, thereby offending Articles 14 and 21 of the Constitution.

12. That section 36(1)(va), being an anti-abuse provision as clarified by CBDT Circular No. 495 dated 22-09-1987, is intended only to prevent misuse of funds, and in absence of any misuse, mechanical disallowance defeats the legislative intent and is unsustainable in law.

13. That the Central Processing Centre, Bengaluru without calculating the due dates of deposit as per prescribed law from the date of disbursement of salary as per the judgement of Kanoi Paper and Industries Ltd. vs. ACIT (2002) 75 TTJ 448 (Cal) was bad in both law and facts of the case.

14. That the assessee being a contractor/sub-contractor providing manpower and facility management services to PSUs/Government organisations, the primary statutory liability under the PF & ESI Acts rests with the Principal Employer, and therefore section 36(1)(va) is not applicable on the facts of the present case.

15. That even otherwise, the employees’ contribution, though alleged to be deposited belatedly, is allowable as business expenditure under section 37(1), there being no violation of law, no mens rea, and no misuse of funds.

16. That the reliance placed on the decision of Checkmate Services Pvt. Ltd. is misplaced, as the material facts of the said case are materially different and not comparable with the facts of the present case, where contributions were deposited before the due date of filing of return and no misuse of funds is alleged.

17. That the section 36(1)(va) uses the word “received” and not “deducted”, and no word can be added, deleted or substituted by the Ld. AO; any interpretation contrary to the plain language of the statute is impermissible in tax law.

18. That the impugned intimation under section 143(1) was passed without issuance of mandatory prior notice under section 143(1)(a) and without affording any opportunity of hearing, in violation of the principles of natural justice, Articles 14 and 265 of the Constitution of India.

19. That the levy of interest under sections 234A and 234B is consequential, bad in law and liable to be deleted, once the substantive addition is deleted.

20. That the impugned order passed by the DCIT, CPC, Bengaluru is erroneous, illegal, arbitrary, unconstitutional and against the settled principles of law, equity and natural justice, and is therefore liable to be quashed.

21. That the appellant craves leave of the Honourable commissioner of Income Tax to add, alter, modify, substitute, delete any grounds of appeal at any stage of the proceedings before the Honourable Income Tax Appellate Tribunal.”

4. The short facts of the case is that, for all the three years in appeal, a disallowance of Employee and employers contribution to PF/ESI was made under section 36(1)(va) while processing the return under section 143(1)(a) of the Act by the Central Processing Centre, Bengaluru (Jurisdictional Assessing Officer: DCIT, Circle 16(1), Delhi), even though the same was deposited before the due date of filing the return of income under section 139(1) of the Act.

5. Aggrieved by the said intimations, the Assessee preferred an appeal before the learned CIT (A) who extensively examined and discussed the issues on merits but thereafter dismissed the appeals on the ground of delay in filing.

6. The ld counsel of the assessee firstly contested the dismissal of appeal on the ground of delay. It is submitted that once the appellate authority has entertained the appeals and rendered findings on the merits of the case, the delay is deemed to have been condoned, and therefore the subsequent dismissal of the appeals solely on the ground of delay is unsustainable in law. Reliance is placed on the judgment of the Hon’ble Madras High Court in the case of Vijayeswari Textiles Ltd. v. Commissioner of Income Tax (decided on 01.10.2001, MANU/TN/0708/2001).

7. On the issue of disallowance u/s 36(1)(va), the ld counsel of the assessee submitted that the aforesaid disallowance does not fall within the scope of permissible prima facie adjustments and was a debatable legal issue at the time of processing. It was submitted that the subsequent decision of the Hon’ble Supreme Court in Checkmate Services Pvt. Ltd. v. CIT [143 com178 (SC)] cannot retrospectively validate an adjustment that was not permissible under Section 143(1)(a) on the date of issuance of the impugned intimation.

8. The ld AR stated that the disallowance of employees’ PF/ESI contribution under section 143(1)(a) is unsustainable in view of the binding jurisdictional precedent under Article 141 of the Constitution of India laid down by the Supreme Court in DCIT vs. M/s. Raghuvir Synthetics ltd. (civil appeal no. 2315 of 2007), wherein it was held that once a binding jurisdictional high court decision exists on the issue, the matter cannot be treated as debatable and thus consequently, the impugned adjustment could not be made under section 143(1)(a) of the Income tax Aсt, 1961, when the issue was in binding precedent of jurisdictional high court was in favour of assessee. The ld AR argued that on the date on which the impugned intimation under section 143(1) was processed/passed, the issue stood covered in favour of the assessee by binding judgments of the Hon’ble Jurisdictional Delhi High Court, inter alia:-

a) CIT vs AIMIL Ltd. (2010) 321 ITR 508 (Delhi);

b) PCIT vs. Pro Interactive Service (India) Pvt. Ltd., vide ITA, No.983/2018 dated 10.09.2018

c) CIT Vs PM Electronics Ltd (Ita No.475/2007),

d) PCIT Vs TV Today Network Ltd., (Ita 227/2022),

Once a binding jurisdictional High Court had already taken a view favorable to the assessee, that the issue is non-debatable and then only prima facie adjustments are permitted under Section 143(1)(a) of the Act. Thus the CPC/Assessing Officer was bound to follow the same and could not disregard binding precedent while exercising limited powers under section 143(1)(a). Consequently, the adjustment made is contrary to settled judicial discipline and liable to be quashed.

8.1 Without prejudice, it is submitted that section 143(1)(a) permits only prima facie, apparent and non-debatable adjustments. Issues requiring interpretation of law, adjudication of competing judicial views, or examination of legal controversy fall outside the scope of section 143(1)(a). In the present matter, the very existence of binding Delhi High Court judgments in favour of the assessee demonstrates that the issue could never have been treated as a matter fit for automatic/intimation adjustment under section 143(1)(a). Therefore, the assumption of jurisdiction under section 143(1)(a) itself is bad in law. However, a binding jurisdictional High Court judgment cannot be treated as debatable under section 143(1). Therefore, the impugned adjustment/disallowance is unsustainable in law and liable to be deleted.

8.2 The ld AR took another argument that the reliance on Checkmate (Supra) is misplaced as it arose from a scrutiny assessment under Section 143(3), which involves a wider scope of examination, whereas Section 143(1)(a) is limited to prima facie adjustments only. Therefore, a disallowance permissible under Section 143(3) cannot be mechanically extended to justify an adjustment under Section 143(1)(a).

8.3. The ld AR placed reliance on the judgment of the Hon’ble Chhattisgarh High Court in Raj Kumar Bothra vs. DCIT (TAXC No. 56 of 2025), wherein it was held that such disallowance on a debatable issue is beyond the scope of Section 143(1)(a) and was on the principle of the judgment of DCIT vs. M/s. Raghuvir synthetics ltd. [civil appeal no. 2315 of 2007), and was accordingly set aside. The said view has also been followed by the ITAT Delhi Bench “A” in A2Z Infra Services Ltd. vs. DCIT (ITA Nos. 970/Del/2023 8: 72/Del/2024), directing deletion of similar disallowance, observing that the issue stood settled only subsequently by the Hon’ble Supreme Court in Checkmate Services Pvt. Ltd. (12.10.2022). Therefore, the addition deserves to liable to be quashed. The ld AR further relied on the ITAT Delhi Bench ‘B’ in Hisar Metal Industries Ltd. VS Vs DCIT, Circle, Hisar (1.T.A. Nos. 2244 8: 2248/Del/2022) (Date of Pronouncement: 15.05.2026).

9. The ld AR, without prejudice to the foregoing submissions, that the reliance, if any, placed on the judgment of the Hon’ble Delhi High Court In Woodland (Aero Club) Pvt. Ltd. Vs. ACIT (ITA NO. 267/2023 DATED 08.09.2025) is misplaced and without prejudice, is submitted to be per incuriam as it failed to consider the binding principle under article 141 of the constitution of India given by the Supreme Court In DCIT V. M/S. Raghuvir Synthetics Ltd (supra).

9.1 It is further submitted that the very fact that the Hon’ble Supreme Court has admitted the Special Leave Petition arising out of the impugned judgment and order dated 08.09.2025 passed in Woodland (Aero Club) Pvt. Ltd. vs. ACIT, ITA No. 267/2023 by the Hon’ble Delhi High Court, demonstrates that substantial questions of law arise for consideration and that the issue has not attained finality. Accordingly, in view of the aforesaid facts, binding jurisdictional precedents, settled principles governing Section 143(1)(a), and the impermissibility of making adjustments on debatable issues, the impugned adjustment is unsustainable in law and deserves to be deleted in toto.

10. The ld AR further invited our attention to Income Tax Act, 2025, wherein the Finance Minister and the Income Tax Department had categorically said there is no tax policy change in drafting the section. The only change is the relevant no. of the section objective and scope of the new act and relied on the provisions of Section 29(1)(e) of the Income tax Act, 2025 which allowed for deduction of PF/ESI in case the employee contribution was deposited with in due date of filing ITR.

11. Per contra, the ld. DR relied upon the orders of Assessing Officer and the decision in the case of Checkmate Services [supra] rendered by the Hon’ble Supreme Court.

12. We have heard the rival submissions and have perused the relevant material on record. On the issue of dismissal of appeal by the CIT(A) on account of delay in filing appeal before him, we are in agreement with the assessee that once the appellate authority has rendered findings on the merits of the case, the delay is deemed to have been condoned. Ground 6 is allowed.

13. The issue of disallowance u/s 36(1)(va), being in violation of constitutional provisions of Article 14,19 and 21 of the Constitution of India, is not adjudicated as being outside our mandate. We however, shall deal with the assessee’s several taxation arguments raised on the issue, one by one. Firstly, reliance of the Hon’ble jurisdictional Delhi High Court in the case of CIT v. AIMIL Ltd. and ITAT decisions is no longer valid as these decisions predate the decision of Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. vs. CIT (supra). The hon’ble Supreme Court in Checkmate Services P. Ltd. vs. CIT has authoritatively laid down the law that disallowance u/s 36(1)(va) for employee’s contribution to ESI/PF, that was deposited by assessee-employer after due date prescribed in PF/ESCI Acts but before due date of filing return under section 139(1), is valid.

14. Moreover, the hon’ble Delhi High Court in the case of Woodland (Aero Club) Private Limited vs ACIT [2025] 178 com207 (Delhi)[08-09-2025] wherein relying on the decision of Checkmate Services P. Ltd. vs. CIT, held that for assessment year 2019-20, disallowance u/s 36(1)(va) for employee’s contribution to ESI/PF that was deposited by assessee-employer after due date prescribed in PF/ESCI Acts but before due date of filing return under section 139(1), is valid. The hon’ble Delhi High Court also observed that the Supreme Court in Checkmate Services (P) Ltd. v. CIT had also considered Alom Extrusions Ltd (2009) 185 Taxman 416(SC) and distinguished the same by observing that the judgment had not considered sections 2(24)(x) and 36(1)(va), and also the separate provisions for employers’ and employees’ contributions under section 36(1). Ground 7 to 12 are accordingly dismissed.

15. The assessee’s argument that the aforesaid disallowance does not fall within the scope of permissible prima facie adjustments and was a debatable legal issue at the time of processing, is no longer valid and res-integra as the hon’ble jurisdictional Delhi High Court in the case of Woodland (Aero Club) Private Limited vs ACIT [2025] 178 taxmann.com 207 (Delhi) dated 08-09-2025 has brought the aforesaid quarrel to rest. The hon’ble Delhi High Court conclusively dispelled the assessee’s argument that the Assessing Officer under section 143(1) could not have passed the order dated 28-5-2020, by holding that at the time when the Assessing Officer proposed the deductions, the judgment of the Gujarat High Court in CIT v. Gujarat State Road Transport Corporation [2014] 366 ITR 170 (Gujarat) was in existence, which has been affirmed by the Supreme Court in Checkmate Services (P) Ltd. v. CIT, hence the Assessing Officer did not err in passing the order. In the instant case, the intimation u/s 143(1) was passed on 15.03.2019; 12.01.2020 and 07.05.2020 for the AYs 2017-18; 2018-19 and 2019-20 respectively, hence was much after the judgement of Gujrat High Court and therefore the disallowance u/s 36(1)(va) u/s 143(1), is legally permitted. Ground 1 to 5 are dismissed.

16. The second argument is that since the jurisdictional Delhi High Court in the case of CIT vs AIMIL Ltd. (2010) 321 ITR 508 (Delhi) has deleted the aforesaid disallowance u/s 36(1)(va), the issue was in favour of the assessee at the time of passing order u/s 143(1), hence as per the ratio of DCIT vs. M/s. Raghuvir Synthetics Ltd., the same cannot be disallowed under section 143(1). We find that the issue before the Hon’ble Delhi High Court in CIT vs AIMIL Ltd was disallowance u/s 36(1)((va) u/s 143(3) and not 143(1), hence distinguishable. Further, the decision of CIT vs AIMIL Ltd was superseded by the decision of the hon’ble Supreme Court in Checkmate Services (P) Ltd. v. CIT which laid the law from the date of its inception 01.04.1988. In this context, we outrightly reject the assessee’s arguments that the hon’ble Delhi High Court in the case of Woodland (Aero Club) Private Limited vs ACIT is per-incuriam.

17. Another argument of the assessee that the decision of Checkmate (Supra) was in context of scrutiny assessment under Section 143(3) and hence it is not applicable, is also answered by the hon’ble Delhi High Court in the case of Woodland (Aero Club) Private Limited vs ACIT which held the disallowance of PF/ESI u/s 143(1) is permissible.

18. We do note that there are decisions on the issue in favour as well as against the assessee. We also note that the this issue was decided against the assessee by the hon’ble Delhi High Court in the case of Woodland (Aero Club) Private Limited vs ACIT; by the hon’ble Bombay High Court in the case of Rohan Korgaonkar V DCIT (2024) 159 com321(Bom); by the Delhi ITAT in Savleen Kaur vs. Income-tax officer [2023] 147 taxmann.com 402 (Delhi – Trib.)/[2023] 199 ITD 437 (Delhi-Trib.) [09-01-2023]; Ram Dayal Bansal (Proprietor Bansal Associates) in ITA No. 1336/Del/2026 and Novelox Softwares India Pvt Ltd in ITA 3757/Del/2023 dated 10.12.2024 wherein disallowance of PF/ESI u/s 143(1) was upheld. Whereas the Hon’ble Chhattisgarh High Court in Raj Kumar Bothra vs. DCIT (TAXC No. 56 of 2025); ITAT Delhi Bench “A” in A2Z Infra Services Ltd. vs. DCIT (ITA Nos. 970/Del/2023 8: 72/Del/2024); and ITAT Delhi Bench ‘B’ in Hisar Metal Industries Ltd. VS Vs DCIT, Circle, Hisar (1.T.A. Nos. 2244 8: 2248/Del/2022) (Date of Pronouncement: 15.05.2026) are in favour of the assessee. In such factual matrix, under the doctrine of judicial discipline, we are bound by the decision of the hon’ble Delhi High Court in the case of Woodland (Aero Club) Private Limited vs ACIT, and therefore following the binding judgement of the Hon’ble Delhi High Court, we uphold the aforesaid disallowance u/s 36(1)(va) while processing the return u/ 143(1) of the Act.

19. The argument that the issue has not attained finality as the Hon’ble Supreme Court has admitted the Special Leave Petition in Woodland (Aero Club) Pvt. Ltd. vs. ACIT, is also misleading and misplaced. We find that the hon’ble Supreme Court was not appraised of the 3 bench decision of the hon’ble Supreme Court in the case of Checkmate Services [Pvt] Ltd (supra) before admitting the SLP.

20. Another argument that the Legislature, under the provisions of Section 29(1)(e) of the Income tax Act, 2025, has allowed for deduction of PF/ESI in case the employee contribution was deposited with in due date of filing ITR, and since the Finance Minister and the Income Tax Department have said there is no tax policy change in drafting the section, the disallowance may be deleted, is again misleading. We are of the considered view that since the legislature has made the provision of section 29(1)(e) in the Income Tax Act 2025 vide the Finance Act 2026, operating with effect from 01.04.2026, the said amendment is neither curative or clarificatory to have a retrospective application. We are of the considered view therefore, that the benefit is granted from 01.04.2026 only and if the legislature had intended to dilute the rigours of the Supreme Court decision in Checkmate Services (P) Ltd. v. CIT, it would have specifically made the amendment retrospective. We therefore hold that the provision of Section 29(1)(e) of the Income-tax Act, 2025 has prospective application and does not alter the legal position as mandated by Checkmate Services (P) Ltd. v. CIT and as available in AY 2018-19. We are fortified in our view by the decision of ITAT in the case of Ram Dayal Bansal (Proprietor Bansal Associates) in ITA No. 1336/Del/2026 dated 15.06.2026.

21. The ground 13,14 and 15 is regarding the deposit of employees’ contribution should be reckoned from the month in which the salary has been actually disbursed rather than the month for which the salary relates. The law on this subject as available in relevant provisions of section 38(1) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, reads as under:

“(1) The employer shall, before paying the member his wages in respect of any period or part of period for which contributions are payable, deduct the employee’s contribution from his wages which together with his own contribution as well as an administrative charge of such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, as the Central Government may fix. He shall within fifteen days of the close of every month pay the same to the fund “electronic through internet banking of the State Bank of India or any other Nationalized Bank authorized for collection” on account of contributions and administrative charge]:

“Provided that the Central Provident Fund Commissioner may for reasons to be recorded in writing, allow any employer or class of employer to deposit the contributions by any other mode other than internet banking”.

Reading the above provision and specially the condition “within fifteen days of the close of every month” to our mind, would mean fifteen days from the month in which the wages/salary becomes due to the employees. For instance, the salary for the month of April, 2017 becomes due on 1^st May, 2017. The assessee has to disburse the wages/salary and deduct employees’ contribution of PF/ESI in May 2017. Thereafter, within 15 days of the end of month of May, in which the deduction of PF/ESI has to take place, the employer has to deposit the employees’ contribution of PF/ESI with the respective fund. Accordingly therefore, the due date for deposit of employees’ contribution to PF/ESIC should be reckoned 15 days from end of May 2017 and consequently the due date should be recorded as 15.05.2017. To our mind, the provision of “due date” in PF/ESI Acts works as welfare legislation for the employees which ensures timely disbursal of wages to the employees. If the interpretation of the assessee that the month in which the salary has been actually disbursed rather than the month for which the salary relates, is adopted the same will go against the employees’ welfare as in that situation, the employers would delay the disbursal of salary for the month of May in any other month, for example July, deposit the employees contribution in July and claim deduction u/s 36(1)(va) of the Act with impunity.

22. We further note that the CPC picked up the late payment of PF/ESI from the Tax Audit report prepared by the Auditor of the assessee. The Auditor of the assessee, in their Tax Audit report in para no.20(b), recognizes our interpretation that the due date is relevant from the end of month in which the wages/salary becomes due and not from the end of month in which the wages/salary is disbursed. The Auditor accordingly, pointed out that the assessee did not deposit the employees’ contribution towards PF/ESI on or before the due date as prescribed in the respective Acts. This note of the Auditor was picked up by the CPC which carried out the processing u/s 143(1). In view of the discussion as above, we therefore hold that the assessee has deposited the employees’ contribution towards PF/ESI into the accounts of respective funds, beyond the prescribed due dates and is therefore liable to be disallowed u/s 36(1)(va) r.w section 2(24)(x) of the Act while processing the return u/s 143(1) of the Act. Ground No.13 to 18 is dismissed.

23. In the result all three appeals of the assessee in ITA Nos. 1361, 1362 & 1363/DEL/2026 are partly allowed.

Order pronounced in the open court on 16.06.2026