2025 (8) TMI 1252 - AT - Income Tax

Disallowance of late-paid employee ESIC and PF contributions governed by Checkmate decision; verify due date before deduction

ITAT DELHI held that disallowance of employee share of ESIC and provident fund paid after the due date is controlled by the SC decision in Checkmate ... Disallowing of Employee share of ESIC and Provident fund which was deposited after the date allowed HELD THAT:- This issue is no more res integra as the quarrel is now settled by the decision of the Hon'ble Supreme Court in favour of the Revenue and against the assessee by the decision in the case of Checkmate Services [Pvt] Ltd [2022 (10) TMI 617 - SUPREME COURT (LB)]. However, we are of the considered opinion that the due date needs to be verified for making the impugned disallowance. For this, we place reliance on the decision of VVDN Technologies [2023 (7) TMI 375 - ITAT DELHI] and in the case of M/s Benson Movers Pvt Ltd [2023 (11) TMI 1337 - ITAT DELHI]. Appeal of the assessee allowed for statistical purposes. Assessee appealed CIT(A)'s disallowance of Rs. 43,31,896 as employee share of ESIC and Provident Fund, contending the amount was deposited 'before time allowed for filing of ITR u/s 139(1) of Income-tax Act' and thus should not be disallowed. Tribunal observed the issue is settled by the Hon'ble Supreme Court decision in Checkmate Services [Pvt] Ltd, 448 ITR 518, favoring the Revenue. Relying also on coordinate-bench precedents (ACIT v. VVDN Technologies; M/s Benson Movers Pvt Ltd), the Tribunal held verification of the statutory due date under the PF Act is necessary before sustaining disallowance. The matter is remitted to the Assessing Officer with directions to verify the due date specified in the PF Act and decide the issue after affording the assessee a reasonable and adequate opportunity of being heard. Appeal allowed for statistical purposes.