Dismissal of C & C Constructions Ltd.’s Appeal Against DCIT for Assessment Year 2013-14

Income Tax Appellate Tribunal Dismisses C & C Constructions Ltd.’s Appeal for Assessment Year 2013-14

The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘B’, dismissed the appeal filed by C & C Constructions Ltd., against the Deputy Commissioner of Income Tax (DCIT), Central Circle-19, New Delhi, concerning the assessment year 2013-14.

Case Background

C & C Constructions Ltd. filed two appeals with the ITAT, contesting the Commissioner of Income Tax (Appeals)-27, New Delhi’s order dated April 28, 2022, which partially granted relief for the assessment years 2013-14 and 2014-15. The core issue revolved around the disallowance related to the delayed deposit of employees’ contribution to Provident Fund (PF) and Employees’ State Insurance (ESI).

Arguments Presented

During the proceedings, the appellant asserted that the deductions for employees’ contribution to PF and ESI were unjustifiably disallowed due to being deposited after the specified due dates under the Income Tax Act’s provisions. The appellant pleaded that these amounts were, nevertheless, deposited before the filing of the income tax return, thus qualifying for deduction.

Conversely, the Revenue argued that the matter of delayed payments had been conclusively decided by the Supreme Court in the case of Checkmate Services Pvt. Ltd. & others vs. CIT & others, effectively settling the legal position against the appellant’s claims.

Court’s Analysis

The tribunal meticulously analyzed the submissions and precedents, specifically the supreme court ruling in Checkmate Services that clarified the taxation status of employees’ contributions to PF and ESI. It noted that contributions must be deposited within the due dates specified in the respective Acts for the deductions to be permissible under section 36(1)(va) of the Income Tax Act.

Additionally, the tribunal observed that the Pune Bench of ITAT had encountered a similar issue, concluding that adjustments made in the intimation issued under section 143(1) of the Act for the disallowance of such delayed deposits were within the legal framework.

Conclusion

Conforming with the legal precedent and the interpretations upheld by the Pune Bench of ITAT, the Delhi Bench found no merit in the appellant’s grounds for appeal. The ITAT, thereby, affirmed the order of the CIT(A) and dismissed the appeals of C & C Constructions Ltd. for both the assessment years in question.

This case underscores the strict adherence to statutory deadlines for depositing employees’ contributions to PF and ESI and its implications on the permissible deductions under the Income Tax Act.

Dismissal of C & C Constructions Ltd.’s Appeal Against DCIT for Assessment Year 2013-14