Disallowance of Delayed Employee ESI and PF Contributions: ITAT Condones Delay and Remits Matter to AO for Verification [Read Order]
The tribunal noted that the revised return was not considered by the authorities and that the disallowance needed factual verification.
![Disallowance of Delayed Employee ESI and PF Contributions: ITAT Condones Delay and Remits Matter to AO for Verification [Read Order]](https://images.taxscan.in/h-upload/2025/08/13/2076399-pf-esi-contribution-taxscan.webp "Disallowance of Delayed Employee ESI and PF Contributions: ITAT Condones Delay and Remits Matter to AO for Verification [Read Order]")
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) condoned delay and remitted the matter to the Assessing Officer (AO ) for verification regarding the disallowance of delayed employee Employee State Insurance ( ESI ) and Provident Fund ( PF ) contributions under section 43B of Income Tax Act,1961. Hindustan Spimg Engineering Pvt. Ltd., appellant-assessee,filed its...
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) condoned delay and remitted the matter to the Assessing Officer (AO ) for verification regarding the disallowance of delayed employee Employee State Insurance ( ESI ) and Provident Fund ( PF ) contributions under section 43B of Income Tax Act,1961.
Hindustan Spimg Engineering Pvt. Ltd., appellant-assessee,filed its original return for AY 2018-19 on 30.01.2018, declaring income of Rs. 60,15,700. Later, it filed a revised return on 09.11.2019, increasing income to Rs. 79,66,160 by disallowing employee ESI and PF contributions not paid on time under section 43B.
The original return was processed under section 143(1), assessing income at Rs. 89,03,800. The appellant appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], saying the Centralized Processing Centre (CPC) wrongly used the original return instead of the revised one. It also tried to file a rectification petition under section 154, but it failed due to portal issues.
Want a deeper insight into the Income Tax Bill, 2025? Click here
The CIT(A) dismissed the appeal, relying on the Supreme Court decision in Checkmate Services Pvt. Ltd., and held that the CPC had rightly disallowed the delayed remittance. The assessee then appealed before the tribunal.
A delay of 373 days happened in filing the appeal. The assessee asked to excuse the delay, explaining that their Chartered Accountant was seriously ill and passed away. They also submitted proof to support this.
After reviewing the situation, the tribunal accepted the reason and excused the delay, following the Supreme Court’s ruling in Collector, Land Acquisition vs. MST. Katiji.
The two member bench comprising Manu Kumar Giri (Judicial Member) and Padmavathy S (Accountant Member) heard both sides and looked at the records. The assessee filed the original return on 30.10.2018, showing income of Rs. 60,15,699. The return was processed under section 143(1), increasing income to Rs. 89,03,800.
How to Audit Public Charitable Trusts under the Income Tax Act Click Here
The assessee said the CPC disallowed employee ESI and PF contributions twice,once in the original and again in the revised return filed on 09.11.2019. The assessee said no demand would arise if the revised return was considered, as tax was paid on the higher income after disallowance.
The appellate tribunal found that the revised return was not considered by the lower authorities and the disallowance claim needed checking. So, the appeal was sent back to the AO to review the revised return, verify the disallowance, and decide if any further disallowance was needed. The assessee was asked to provide documents and cooperate. The order was passed accordingly.
Therefore,the appeal was allowed for statistical purposes.
Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates
