Assessee's Appeal Dismissed on Late ESIC/PF Payments

The Tribunal dismissed the appeal of the assessee concerning the disallowance under section 36(1)(va) of the Income Tax Act. The decision upheld the addition of Rs. 8,54,455 due to late payment of ESIC/PF contributions, citing precedents set by the Gujarat High Court that late deposits of such contributions are not eligible for deductions.

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Issues:
Appeal against disallowance under section 36(1)(va) of the Income Tax Act due to late payment of ESIC/PF contributions.

Analysis:
The appeal was filed against the order of the ld. Commissioner of Income Tax (Appeals)-2, Vadodara regarding the disallowance of Rs. 8,54,455 under section 36(1)(va) for the assessment year 2012-13. The assessee contended that the disallowance should not be confirmed as the payments were made before the due date of filing returns. The Gujarat High Court's decision in the case of CIT vs. Gujarat State Road Transportation Corporation was cited in support of the appeal.

The assessee sought an adjournment, but none appeared on their behalf. The Tribunal decided to proceed with the case due to the single issue involved, which was the disallowance under section 36(1)(va) based on late ESIC/PF payments. The adjournment application was rejected.

The assessing officer disallowed Rs. 8,54,455 on account of late payment of PF contributions by the assessee, citing the Gujarat High Court's decision in the case of Gujarat State Road Transportation Corporation. The ld. CIT(A) upheld the disallowance, stating that the Supreme Court's judgment in the case of Rajasthan State Beverages Corporation Ltd. was not applicable to the current scenario. The appeal was dismissed, and the addition of Rs. 8,54,455 was upheld.

The Tribunal noted that the issue was covered against the assessee by the Gujarat High Court's decisions in previous cases. The Tribunal held that the disallowance was justified as the employees' contributions towards PF and ESI were not deposited within the prescribed period. Following the Gujarat High Court's decisions, the appeal was dismissed, and the addition made by the assessing officer was upheld.

In conclusion, the Tribunal dismissed the appeal of the assessee based on the disallowance under section 36(1)(va) of the Income Tax Act. The decision was in line with the precedents set by the Gujarat High Court in similar cases, where late deposits of ESIC/PF contributions were not allowed as deductions.

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