The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) upheld the disallowance for delayed deposit of provident fund ( PF ) and employee state insurance corporation( ESIC ).
The Assessee Kaarya Facilities and Services Limited is engaged in the house keeping services and had filed its return of income BY declaring total income at Rs.80,46,007/- and the same was processed under Section 143(1) of the Income Tax Act where the Central Processing Centre Made a disallowance of Rs.3,13,682/- being the delayed deposit of PF & ESIC under Section 36(1)(va) of the Income Tax Act which was paid before filing of the return but after the due date prescribed under the relevant Acts along with the other additions.
Aggrieved by the order assessee filed appeal before the tribunal who had upheld the addition made by the CPC by placing reliance on the decision of the Apex Court in the case of Checkmate Services P. Ltd. vs. CIT. Accordingly the assessee filed a second appeal before the tribunal.
Shouvik Kumar Roy, Assessee Representative ( AR ) argued that the ‘due date’ as per EPF/ESIC should be considered as ‘15 days from the close of the month of actual wage disbursement’ instead of ‘15 days from the close of the month for which wages are payable’. So Apex Court in the case of Checkmate Services P. Ltd.has not expressly specified the ‘due date’ as per EPF and ESIC and neither the same has been specified in EPF Act, 1952.
Accordingly the AR contended that the due date for deposit of the employee’s contribution to PF & ESIC should be 15 days from the close of the month of the actual wage disbursement
Although the P. D. Chougule, revenue counsel argued that they contended that the issue of reckoning the due date has been dealt with in detail by the Madras High Court in the case of CIT vs. Madras Radiators and Pressings Ltd. where it has categorically stated that the due date should be 15 days from the close of the month for which wages are payable.
After considering the issues Karnataka High Court in the case of Biocon Ltd the two member bench comprising Kavitha Rajagopal, (Judicial Member) & S Rifaur Rahman, (Accountant Member) observed that Madras High Court has cleared the ambiguity in interpreting the “due date” for the purpose of provision of section 36(1)(va) of the Act. On this observation, the arguments of the AR fails and the bench is inclined to dismiss the additional ground raised by the assessee.
Accordingly the ITAT bench dismissed the appeal filed by the assessee.
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