Case Number: ITA 959/DEL/2021
Appellant: Weather Comfort Engineers Private Limited, New Delhi
Respondent: CPC ITD, Bengaluru
Assessment Year: 2018-19
Result: 2018-19
Case Filed on: 2021-08-11
Order Type: Final Tribunal Order
Date of Order: 2023-02-15
Pronounced on: 2023-02-15
Tribunal: IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “H” DELHI
Before: Shri Challa Nagendra Prasad, Judicial Member & Shri Pradip Kumar Kedia, Accountant Member
Introduction
This appeal was filed by Weather Comfort Engineers Private Limited against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 21.06.2021, for the assessment year 2018-19. The appeal challenges the disallowance of employee contributions to Provident Fund/ESIC under Section 36(1)(va) read with Section 43B of the Income Tax Act, 1961.
Background
The appellant, Weather Comfort Engineers Private Limited, contested the disallowance of Rs. 1,94,016 made by the Central Processing Centre (CPC) during the processing of the return of income. The disallowance was made on the ground of delayed deposit of employee contributions to Provident Fund/ESIC.
Key Issues and Arguments
The appellant raised the following grounds of appeal:
Tribunal’s Analysis and Findings
The tribunal noted that despite multiple opportunities, the appellant did not appear for the hearing. Therefore, the tribunal proceeded ex-parte in the absence of the appellant.
The Senior Departmental Representative (DR) for the Revenue supported the CPC’s action of disallowance, citing the Supreme Court judgment in the case of Checkmate Services (P.) Ltd. vs CIT, which upheld that belated deposit of employee contributions to Provident Fund/ESIC is to be treated as taxable income under Section 2(24)(x) read with Section 43B of the Income Tax Act.
The tribunal also referred to similar judgments by the Pune Bench of the Tribunal in the case of Cemetile Industries vs ITO and the Delhi Bench in the case of Savleen Kaur & Others vs ITO and BT Data and Surveying Services India Pvt. Ltd. vs. ITO. These cases consistently held that delayed deposit of employee contributions is subject to disallowance, even in proceedings under Section 143(1) of the Act.
Judgment
The tribunal found no merit in the appeal of the appellant and upheld the disallowance made by the CPC. The appeal was dismissed ex-parte.
Conclusion
The appeal filed by Weather Comfort Engineers Private Limited was dismissed. The disallowance of Rs. 1,94,016 on account of delayed deposit of employee contributions to Provident Fund/ESIC was upheld.
Final Judgment
Order pronounced in the open court on 15.02.2023.
Signed:
Shri Challa Nagendra Prasad, Judicial Member
Shri Pradip Kumar Kedia, Accountant Member
Dated: 15.02.2023
Copy forwarded to:
Assistant Registrar, ITAT, New Delhi
Relevant Legal Provisions and Precedents
This case centered around the procedural aspects of disallowing employee contributions to Provident Fund/ESIC under Section 36(1)(va) read with Section 43B of the Income Tax Act. The appellant’s failure to deposit the contributions within the prescribed time resulted in disallowance, upheld by the tribunal.
Impact of the Judgment
This judgment underscores the importance of timely deposit of employee contributions to Provident Fund/ESIC to avoid disallowance and additional tax liability. It also highlights the binding nature of the Supreme Court’s judgment in Checkmate Services (P.) Ltd. vs CIT on such matters.
Key Takeaways
The case emphasizes the criticality of adhering to statutory timelines for depositing employee contributions to Provident Fund/ESIC. It serves as a precedent for similar cases, reinforcing the importance of compliance with tax regulations to avoid adverse outcomes.
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform