Employees' PF Contributions via Cheque Allowed Despite Delay Under Section 36(1)(va); Re-adjudication Ordered

The ITAT Delhi held that the assessee's employees' contribution to the provident fund, deposited via cheque on 11th May 2018 and encashed by 16th May 2018, should not be disallowed under section 36(1)(va) despite the delay beyond the due date. The delay was condoned due to circumstances beyond the assessee's control. However, as the lower authorities lacked proper evidence supporting the explanation, the ITAT directed the AO to re-adjudicate the issue. The assessee's appeal was allowed for statistical purposes.

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The Appellate Tribunal (ITAT Delhi) heard the assessee's appeal for AY 2019-20 challenging the disallowance under section 36(1)(va) of employees' provident fund contributions amounting to Rs. 53,74,605/-, upheld by the CIT(A)/NFAC. The Revenue relied on the Supreme Court's ruling in Checkmate Services Pvt. Ltd. v. CIT [2022] 143 taxmann.com 278 (SC), asserting the issue is settled in the department's favor, as the contribution was not credited/deposited by the due date prescribed under the Act (earlier of due date under the statute or filing of return under section 139(1)). The assessee contended that the cheque was deposited on 11th May 2018 and encashed by 16th May 2018, arguing for condonation of delay due to circumstances beyond control. However, the Tribunal noted the absence of adequate supporting evidence for this explanation before the lower authorities. Consequently, with the consent of both parties, the Tribunal directed that the sole substantive grievance be re-adjudicated by the Assessing Officer in accordance with law, allowing three effective opportunities to the assessee. The appeal was allowed for statistical purposes. The order was pronounced on 3rd June 2025.

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