Jagati Mining Company Private Limited Vs ACIT (ITAT Surat)
ITAT Surat held that employee’s contribution towards PF and ESI cannot be allowed if it is deposited after the due dates under those Acts but before filing of return. Accordingly, disallowance u/s. 36(1)(va) confirmed and appeal dismissed.
Facts- The assessee filed its return of income on 30.09.2019 for AY.2019-20, declaring total income at Rs.1,02,02,740/-. The return was processed by the Central Processing Centre (CPC) where it made disallowance of Rs.1,78,411/- u/s 36(1)(va) of the Act for deposit of ESI and EPF contribution of employees after due date.
CIT(A) dismissed the appeal by relying on the decision of Hon’ble Supreme Court in case of Checkmate Services Pvt. Ltd. vs. CIT. Being aggrieved, the present appeal is filed.
Conclusion- Held that there were delays from 3 days to 34 days in various months. There was delay of 34 days in July and 19 days in August, 2018. But there was no delay in September, December, 2018 and January, 2019. The assessee has not explained such irregularity in deposit of the EPF and ESI contribution. How could there be technical glitch in one month and no such glitch in the next month and again another technical glitch in the next two months. Hence, the claim of delay only due to technical glitches has not been satisfactory explained. Be that as it may, the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra) has clearly held that employee’s contribution towards PF and ESI cannot be allowed if it is deposited after the due dates under those Acts but before filing of return.
