Case Law Details
Gurusamy Aadhinarayanan Vs ITO (ITAT Chennai)
Introduction: The case of Gurusamy Aadhinarayanan versus the Income Tax Officer (ITO), adjudicated by the Income Tax Appellate Tribunal (ITAT) Chennai, revolves around a dispute concerning the remittance of employees’ contributions towards Provident Fund (PF) and Employee State Insurance (ESI). The ITAT’s directive for re-adjudication highlights the complexities surrounding the due dates of remittance and their correlation with government holidays, warranting a fresh examination of the matter.
Detailed Analysis: The petitioner, Gurusamy Aadhinarayanan, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi, dated May 25, 2023, pertaining to the assessment year 2019-20. The appeal was delayed by 12 days, prompting the petitioner to seek condonation of delay, which was granted by the ITAT.
The dispute arose from the assessment conducted under Section 143(1) of the Income Tax Act, 1961, wherein the assessing officer disallowed the employees’ contributions towards PF and ESI, citing non-deposit of the same before the due date as per Section 36(1)(va) of the Act. The CIT(A) upheld the additions, leading to the petitioner’s appeal before the ITAT.
During the proceedings, the petitioner argued that remittances were made on the next immediate working day following government holidays in May and July, thereby contesting the notion of delay in payment. Conversely, the department contended that electronic payments are not contingent upon office closures and must adhere to due dates, regardless of holidays.
The ITAT, upon consideration of arguments from both sides, deemed it necessary to remit the matter back to the Assessing Officer for further verification. The tribunal emphasized the need to examine the details of remittance and assess whether the payments were made in compliance with legal requirements, taking into account the peculiarities of government holidays.
Conclusion: The ITAT’s directive for re-adjudication in the case of Gurusamy Aadhinarayanan versus ITO underscores the importance of meticulously analyzing the nuances surrounding tax assessments, particularly concerning due dates and remittances. By ordering a fresh examination of the issue, the tribunal ensures a fair and comprehensive review, taking into account all relevant factors, including the impact of government holidays on payment schedules. This ruling reaffirms the commitment to uphold procedural fairness and transparency in tax proceedings, ultimately promoting confidence in the justice system.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 25.05.2023 relevant to the assessment year 2019-20.
2. The appeal filed by the assessee is delayed by 12 days in filing the appeal and filed a petition for condonation of delay in support of an affidavit to which; the ld. DR has not raised any serious objection. Consequently, since the assessee was prevented by sufficient cause, the delay in filing of the appeal stands condoned and the appeal is admitted for adjudication.
3. Brief facts of the case are that the assessee filed return of income for the assessment year 2019-20 on 31.10.2019 declaring total income of ₹.70,84,090/-. The assessment has been completed under section 143(1) of the Income Tax Act, 1961 [“Act” in short] by making disallowance of employees contribution towards Provident Fund and ESI not deposited on or before the due date under section 36(1)(va) of the Act being ₹.10,24,122/- and added exempted income of ₹.22,963/-(interest on PPF account). On appeal, by following the decision in the case of Checkmate Services Pvt. Ltd. v. CIT [2022] 143 com 178 (SC) the ld. CIT(A) confirmed the additions and dismissed the appeal of the assessee.
4. On being aggrieved, the assessee is in appeal before the Tribunal. By filing copy of the details of remittance as well as holidays’ list of the ITAT, the ld. Counsel for the assessee has argued that the due date of remittance being Government holidays (in May & July), it cannot be reckoned as delay when the assessee has remitted the payment on the next immediate working day, as was done in most of the months.
5. On the other hand, the ld. DR has submitted that since the payments are made in the electronic mode and whether the office of the Department or the assessee are closed on certain date or not, being gazetted holidays, cannot be ignored while reckoning the due date.
6. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. While passing the order under section 143(1) of the Act, the CPC disallowed the PF & ESI remittance on the ground that the same were not deposited on or before the due date under section 36(1)(va) of the Act. The contention of the assessee is that since the due date of remittance being Government holidays (in May & July), it cannot be reckoned as delay when the assessee has remitted the payment on the next immediate working day and prayed for allowing the deduction claimed by the assessee. However, the above fact was not considered by the ld. CIT(A). In view of the above, we remit the matter back to the file of the Assessing Officer to verify the details of remittance and decide the issue in accordance with law by affording an opportunity of being heard to the assessee.
7. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 18th January, 2024 at Chennai.
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