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of <h1>Belated employees' PF/ESI payments disallowed u/s254(2); s.143(1) adjustment for delayed contributions upheld as apparent mistake</h1> ITAT Chennai allowed the Revenue's miscellaneous application under s.254(2), holding that non-disallowance of employees' PF/ESI contributions paid beyond ... Rectification u/s 254 - disallowing late payment of Employees’ Contribution to PF / ESI which have been deposited beyond due date as specified in respective welfare ESI / PF acts - lead order has now been passed by the bench [2023 (7) TMI 1621 - ITAT CHENNAI] wherein the applications of revenue has been allowed and the issue, on merits, has been decided against the assessee considering the decision of Hon’ble Supreme Court in the case of Checkmate Services P. Ltd. [2022 (10) TMI 617 - SUPREME COURT (LB)] HELD THAT:- Bench held that there was mistake apparent from record in terms of section 254(2) and therefore, the Revenue’s applications were to be allowed. The issue, on merits was decided against the assessee. It was also held that such an adjustment could very well be made while processing return of income u/s 143(1) as per decision in Electrical India [2022 (11) TMI 1363 - ITAT CHENNAI] Accordingly, accepting the present application of the revenue, the captioned order stand modified and the impugned issue is decided against the assessee. The Ld. AO is directed to re-compute the income of the assessee by disallowing late payment of Employees’ Contribution to PF / ESI which have been deposited beyond due date as specified in respective welfare ESI / PF acts. The order of Tribunal stand modified accordingly. The findings rendered in order are not disturbed. MA stands allowed. Revenue filed a Miscellaneous Application under section 254(2) seeking rectification of an earlier ITAT order dated 11.04.2022. The application formed part of a batch of identical matters, all governed by the adjudication in lead MAs Nos. 97/Chny/2022 & 11/Chny/2023 decided on 31.07.2023. In the lead order, the Tribunal, relying on the Supreme Court decision in Checkmate Services (P.) Ltd. v. CIT (143 taxmann.com 178, dated 12.10.2022), held that there was a 'mistake apparent from record' within the meaning of section 254(2). Consequently, the revenue's applications were allowed and the issue on merits was decided against the assessees. The Tribunal further held, following Electrical India (ITA No. 789/Chny/2022), that such disallowance could be made in processing under section 143(1). Applying the lead decision, the Tribunal modified its earlier order, directing the Assessing Officer to re-compute income by disallowing late payment of employees' contribution to PF/ESI deposited beyond the due dates under the respective Acts.
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