ITAT upholds Addition made u/s 36 of Income Tax Act for delayed Deposit of EPF & ESIC [Read Order]

The Income Tax Appellate Tribunal (ITAT) Delhi Bench upheld the addition made under Section 36 of Income Tax Act for delayed deposit of Employees’ Provident Fund (EPF) and Employee State Insurance Corporation (ESIC).

The assessee, Parminder Kumar filed return of income for Assessment Year 2017-18 declaring total income of Rs. 12,39,720/- and claimed a refund of Rs. 6,72,080.

The return of income was processed 143(1) of the Income Tax Act, 1961 by making disallowance under section 36 of the Income Tax Act on account of non-remittance of EPF & ESIC Service Tax within the due date of respective Act. Thereafter, the assessee filed a rectification request and the AO passed a rectification order dated under Section  154 of the Income Tax Act. 

As against the intimation under Section 143(1) of the Income Tax Act, the assessee preferred the Appeal before the Commissioner of Income Tax (Appeals), who dismissed the appeal filed by the assessee. Aggrieved by the order, the assesee filed a second appeal before the tribunal.

Before the bench, the assessee-representative contented that the  deposit of EPF and ESIC paid within stipulated time ignoring the fact that in most of the cases delay is of few days and the deposit has been made before the due date of filing of the return of income.

Rajesh Dhanesta, the counsel representing the department argued that assesee’s case should not be entertained relied upon the decision of supreme court in case of in the case of Checkmate Services Pvt. Ltd. vs. CIT.

The tribunal observed that the Supreme Court in the case of Checkmate Services Pvt. Ltd. vs. CIT-held that delayed deposit of the contribution EPF & ESIC beyond the stipulated period prescribed in the respective Acts are not allowable.

Therefore, a two member bench of B. R. R. Kumar(Accountant Member) and Yogesh Kumar U.S. (Judicial Member) confirmed  the addition under Section 36 of the Income Tax Act for delayed deposit of EPF & ESIC.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates