Case Number: ITA 2983/DEL/2022
Appellant: Parminder Kumar, Sonepat
Respondent: ITO, Ward-3, Sonepat
Assessment Year: 2019-20
Result: Final Tribunal Order
Case Filed on: 2022-12-22
Date of Order: 2023-06-07
Pronounced on: 2023-06-07
This case involves Parminder Kumar (Appellant) and the Income Tax Officer (ITO) (Respondent). The appellant filed appeals against the orders passed by the National Faceless Appeal Centre (NFAC) for the assessment years 2017-18, 2018-19, and 2019-20. The core issue pertains to the delayed deposit of Employees’ Provident Fund (EPF) and Employees’ State Insurance Corporation (ESIC) contributions.
The appellant argued that the CIT(A) confirmed the addition of Rs. 44,03,794 under Section 36 of the Income Tax Act for delayed deposit of EPF and ESIC contributions. The appellant contended that the delays were minimal, and the deposits were made before the due date for filing the return of income. Hence, the addition was unjustified.
In this year, the appellant contested the addition of Rs. 37,69,476 under Section 43(B) of the Act for delayed deposit of GST payable on services. The appellant claimed that this amount was paid in the subsequent financial year and should not be included in the profit and loss account.
For the year 2019-20, the appellant challenged the addition of Rs. 75,20,262 under Section 43(B) of the Act for delayed deposit of GST payable on services. Similar to the previous year, the appellant asserted that the amount was never a part of the profit and loss account and was declared in the audit report.
The court referred to the Supreme Court’s decision in the case of Checkmate Services Pvt. Ltd. vs. CIT-1, which established that delayed deposits beyond the stipulated period are not allowable. Consequently, the court found no merit in the appellant’s arguments and dismissed the ground of appeal.
Considering the specific case of the appellant that the GST payable amount was not part of the profit and loss account, the court remanded the issue back to the CIT(A) for de novo adjudication. The appellant was directed to substantiate their claim, and the CIT(A) was instructed to decide the issue in accordance with the law.
Similar to the 2018-19 assessment year, the court remanded the issue of the GST payable amount back to the CIT(A) for further consideration. The appellant was again directed to provide evidence supporting their claim, and the CIT(A) was tasked with making a decision based on the law.
The appeals were partly allowed for statistical purposes, with the court remanding the issues regarding the delayed deposits to the CIT(A) for de novo adjudication. The court upheld the Supreme Court’s ruling on the non-allowability of delayed EPF and ESIC contributions beyond the due dates specified in the respective acts.
In conclusion, the Income Tax Appellate Tribunal (ITAT) dismissed the grounds of appeal related to the delayed deposit of EPF and ESIC, reaffirming the Supreme Court’s decision in the Checkmate Services case. However, the issues related to the delayed deposit of GST payable amounts were remanded to the CIT(A) for further consideration, requiring the appellant to substantiate their claims.
Parminder Kumar vs. ITO – Case Filed for Delayed Deposit of EPF and ESIC – ITA No. 2983/DEL/2022
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