TaxTMI 
TaxTMI 
2024 (8) TMI 536
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....ter referred to as the "Act"), dated 22.09.2022 for Assessment Year 2021-22. 2. Grounds taken by the assessee are reproduced as under: "1. The learned Addl/JCIT(A) has erred in disallowing payment made of Rs. 6,46,040/- u/s 36(1)(va) for A.Y. 2021-22 ignoring the fact that the due date of payment was falling in the period of Covid Pandemic - complete lock down and on account of operational and economic difficulties, the payment in due date was not in the control of the appellant. 2. The learned Addl/JCIT(A) has not considered the Circular by Employee's Provident Fund Organisation Head Office, New Delhi dated 15.05.2020 bearing Ref. No. C- I/Misc/2020-21/Vol.1/1112, relaxing the establishments and factories covered under EPF from levy ....
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....P) Ltd. v. CIT [2022] 143 taxmann.com 178 (SC) did not allow the deduction and dismissed the appeal of the assessee. According to him, Hon'ble Supreme Court had confirmed the stand of the Department that if the employees' contribution towards EPF and ESI is not deposited within the due dates under the relevant Act as mandated by the explanation in Section 36(1)(va), the same will not be allowable as a deduction. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, ld. Counsel for the assessee reiterated the facts and referred to the documentary evidences placed on record as extracted above. She referred to circular issued by Employees' Provident Fund Organisation dated 15.05.2020 vide circular No. C-I/Misc/2020- 21/Vol.I/111....
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....puted that for all other months, assessee had deposited the employees' contribution of PF and ESI within the due dates prescribed under the relevant Acts irrespective of extended period of COVID-19 pandemic. 7.1. Before we delve into the issue raised before us, in the aforesaid factual matrix, it is worth taking note of the certain key data points relating to pandemic of COVID-19 and lockdown imposed thereby. We note that to control the spread of the coronavirus COVID-19 pandemic, the Government of India imposed various phases of lockdown starting from the third week of March 2020. The World Health Organization (WHO) declared COVID-19 a pandemic on 11.03.2020. In India, a complete nationwide lockdown was implemented for a total of 68 days ....
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....yer and such delay cannot be attributed to any culpable state of mind of the employer and therefore does not attract penal provisions of section 14B of the EPF Act. It is stated in this circular that for any delay in payment of any contributions or administrative charges due for any period during the lockdown, no proceeding would be initiated for levy of penal damages in such cases. 7.3. In the given peculiar set of facts and circumstances of this present case, the moot point before us to be considered in respect of the aforesaid delay in depositing employees' contribution to PF and ESI is the effect of circular issued by EPF Organisation as referred above, whereby levy of penal damages on account of delay under the relevant Act for deposi....
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.... reads as "Measures of penalising employers who misutilise contribution to the provident fund or any fund set up under the provisions of the Employees' State Insurance Act, 1948, or any other fund for welfare of employees." 8.1. Contention of the Revenue before the Hon'ble Court was that "when the assessee did not deposit the employees' contribution in the PF account before the due date provided under the EPF/ESI Act, the assessee was disentitled to deduction under Section 36 in the relevant assessment order, though the assessee might have deposited the employees' contribution on or before the due date of filing of the return under Section 139 of the IT Act." 8.2. Hon'ble Court in para 35 and 52 took note of the memorandum explaining the ....
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....deposit of PF and ESI of the employees' share is for the month of April 2020 and May 2020. These months fell in the period of lockdown when pandemic of COVID-19 was at its peak. Due dates to deposit for these two months were 15.05.2020 and 15.06.2020 as per the relevant enactments. Assessee deposited the delayed amount in the month of June 2020 when there was relaxation in the lockdown and banking was permitted. There is no mischief on the part of the assessee in holding the employees' contribution for long periods as contemplated in the memorandum explaining the provisions introduced in the Finance Bill, 1987 and CBDT circular (supra) and dealt by the Hon'ble Supreme Court in Checkmate Services (supra). In fact, assessee demonstrated its v....