2024 (2) TMI 1598 - AT - Income Tax

One-day delay for ESIC and EPF contributions due on Sunday but paid next working day treated as timely

ITAT KOLKATA - AT held that where ESIC/EPF contributions fell due on a Sunday and were paid on the next working day, there was no delay. A payment due ... Addition on account of late payment of PF/ESI - late payment - HELD THAT:- We note from the records before us that the last day of depositing ESI’s contribution happened to be Sunday and therefore the payment was made immediately in the next following date i.e. Monday. It is clear from the table that Rs. 1,17,518/- which was due on 15.10.2017 was paid on 16.10.20217 and therefore there is no delay in making the payment. In respect of other two payments there is delay of one day as payment were made on 17.10.2017. The case of the assessee is squarely covered by the decision in the case of GD Foods and Manufacturing (India) Pvt. Ltd [2023 (7) TMI 738 - ITAT DELHI] delete the disallowance of delay deposit of one day on account of public holiday/Sunday on ESIC and EPF. The sole issue was disallowance of employees' contribution to ESI for 'late payment.' Records show the instalment of Rs. 1,17,518 due on 15.10.2017 fell on a Sunday and was paid on 16.10.2017, while two other amounts (Rs. 23,050 and Rs. 16,941) showed a one-day delay to 17.10.2017. The Tribunal held the assessee's case is squarely covered by the Co-ordinate Bench decision in GD Foods and Manufacturing (India) Pvt. Ltd. v. ADIT [2023], which stated: 'Thus, in our opinion, considering the fact that the due date of depositing the contribution of ESIC & EPF falls on Sunday and gazette holiday, the said delay of one day deserves to be condoned as per Section 10 of General Causes Act. Further it is also observed that the assessee has no intention not to deposit the contribution of ESI & EPF well within the time, depositing the contribution very next day of Holiday proves the bona-fide of the assessee Therefore in our opinion, the authorities have committed error in disallowing the deposit made with one day delay where the due date under respective acts falls either on Sunday or on gazette holiday.' Applying that principle, the Tribunal set aside the appellate order and directed allowance of Rs. 1,17,518; appeal partly allowed.