The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, held that payments towards employees’ contributions on account of Provident Fund and Employee State Insurance Contributions made after the due date prescribed under relevant statutes should attract disallowance under section 36(1)(va) of the Income Tax Act, 1961.
Consequently, the bench, after considering the matter, dismissed the appeal of the assessee.
The assessee, Giri Bahadur, filed the appeal against the disallowance on account of the late deposit of employees’ contributions towards PF and ESIC before the prescribed due dates as specified under the relevant statutes.
The matter was recalled, and it is true that in this case, employee contributions to the Provident Fund and ESI were deposited after the deadline specified by the corresponding statutes. As a result, the aforementioned addition/disallowance was made in accordance with section 2(24)(x) of the Act and section 36(1)(va) of the Income Tax Act.
During the appeal proceedings, the tribunal relied upon the decision of Checkmate Services Pvt. Ltd. vs. CIT and observed that payments towards employees’ contributions on account of PF/ESIC made after the due date as prescribed under the relevant statutes are not allowable as a deduction under section 36(1)(va) of the Act.
After reviewing the facts and records, the single bench of N. K. Choudhry (Judicial Officer) held that payments towards employees’ contributions on account of Provident Fund and Employee State Insurance Contributions made after the due date prescribed under relevant statutes should attract disallowance under section 36(1)(va) of the Income Tax Act.
Smitha V. Nair appeared for the revenue, and no one appeared for the assessee during the appeal proceedings.
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