Employees’ PF & ESI Contribution Disallowed if Paid After Due Date: ITAT [Read Order]
Relying on the Supreme Court’s decision in Checkmate Services (P) Ltd. vs. CIT (2022), the Tribunal set aside CIT(A)’s order and restored the AO’s addition
![Employees’ PF & ESI Contribution Disallowed if Paid After Due Date: ITAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/Employees-PF-ESI-Contribution-PF-ESI-Contribution-Employees-PF-ESI-Contribution-Disallowed-PF-ESI-Contribution-Disallowed-ITAT-taxscan.jpg "Employees’ PF & ESI Contribution Disallowed if Paid After Due Date: ITAT [Read Order]")
The Hyderabad Bench of Income Tax Appellate Tribunal(ITAT)ruled that employees’ Provident Fund(PF) and Employees State Insurance(ESI) contributions are not deductible if paid after the due date prescribed under the respective laws. The Revenue-appellant, appealed against the order passed by CIT(A) dated 23/06/2017 for the Assessment Year(AY)2012-13. In this case, Lycos Internet...
The Hyderabad Bench of Income Tax Appellate Tribunal(ITAT)ruled that employees’ Provident Fund(PF) and Employees State Insurance(ESI) contributions are not deductible if paid after the due date prescribed under the respective laws.
The Revenue-appellant, appealed against the order passed by CIT(A) dated 23/06/2017 for the Assessment Year(AY)2012-13. In this case, Lycos Internet Ltd, respondent-assessee, faced an addition by the Assessing Officer(AO) for the belated payment of employees’ contribution towards PF under Section 36(1)(va) read with Section 2(24)(x) of the Income Tax Act, 1961.
The Commissioner of Income Tax(Appeals)[CIT(A)] set aside the addition, citing various High Court rulings that allowed such payments under Section 43B of the Act if made on or before the due date for filing the return under Section 139(1) of the Act.
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The two member bench comprising Vijay Pal Rao(Vice President) and Madhusudan Sawdia(Accountant Member) discussed the Supreme Court's ruling in Checkmate Services (P) Ltd. vs. CIT (2022) 448 ITR 518 had settled the issue against the assessee. The Court held that employees’ contributions to PF and ESI were not deductible if paid after the due date under the respective laws.
Following this decision, the tribunal set aside CIT(A)'s order and restored the AO’s addition.
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In short, the appeal filed by the revenue was dismissed.
To Read the full text of the Order CLICK HERE
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