Case Number: ITA 994/DEL/2021
Appellant: Data Glove IT Solutions Private Limited, New Delhi
Respondent: Income Tax Officer, Circle 7(1), New Delhi
Assessment Year: 2018-19
Result: 2018-19
Case Filed on: 2021-08-19
Order Type: Final Tribunal Order
Date of Order: 2023-02-15
Pronounced on: 2023-02-15
This case involves an appeal filed by Data Glove IT Solutions Private Limited (hereinafter referred to as ‘the Appellant’) against the order dated 21.06.2021 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), for the assessment year 2018-19. The appeal addresses the disallowance of employees’ contributions to Provident Fund and ESIC due to late deposit under Section 36(i)(va) read with Section 43B of the Income Tax Act, 1961.
The appellant is a private limited company engaged in IT solutions. The return of income for the AY 2018-19 was electronically filed on 17.10.2019. The Central Processing Centre (CPC) made additions of Rs.21,83,421/- to the returned income of the appellant on account of the late deposit of employees’ contributions to Provident Fund and ESIC. The disallowance was made while processing the return of income under Section 143(1) of the Act.
The appellant challenged the disallowance before the Commissioner of Income Tax (Appeals), arguing that the late deposit of employees’ contributions should be allowed as a deduction under Section 43B of the Act. However, the CIT(A) upheld the action of the Revenue, leading to the present appeal before the Income Tax Appellate Tribunal (ITAT).
When the matter was called for hearing, none appeared on behalf of the appellant. The ITAT proceeded ex-parte in the absence of the appellant. The Senior Departmental Representative (Sr. DR), Shri R.K. Jain, supported the action of the Revenue, citing the judgment of the Supreme Court in the case of Checkmate Services (P.) Ltd. vs CIT (2022) 143 taxmann.com 178 (SC), which held that the belated deposit of employees’ contributions to Provident Fund and ESIC is taxable under Section 2(24)(x) read with Section 43B of the Act.
The Tribunal noted that the issue of the taxability of belated employees’ contributions to Provident Fund and ESIC is settled by the Supreme Court’s judgment in the case of Checkmate Services (P.) Ltd. vs CIT. The ITAT also referenced its own earlier decisions in similar cases, including Cemetile Industries vs ITO and Savleen Kaur & Others vs ITO, which upheld the disallowance of such contributions under Section 143(1) of the Act.
The Tribunal observed that the Central Processing Centre (CPC) was correct in disallowing the deduction for the late deposit of employees’ contributions to Provident Fund and ESIC while processing the return under Section 143(1). The ITAT further noted that the delayed deposit indicated in the audit report is sufficient for adjustment under Section 143(1).
Considering the settled legal position and the facts of the case, the Tribunal dismissed the appeal filed by Data Glove IT Solutions Private Limited. The ITAT upheld the order of the CIT(A), confirming the disallowance of the late deposit of employees’ contributions to Provident Fund and ESIC.
Order: The appeal of the appellant is dismissed ex-parte.
Order Pronounced in the Open Court on 15th February, 2023.
-Sd/- (Challa Nagendra Prasad, Judicial Member)
-Sd/- (Pradip Kumar Kedia, Accountant Member)
Date: 15th February, 2023
Copy forwarded to:
Assistant Registrar
ITAT, New Delhi
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