TaxTMI 
TaxTMI 
2023 (6) TMI 1412
X X X X Extracts X X X X
X X X X Extracts X X X X
....nasi/10002/2020-21, for assessment year 2019-20, which in turn has arisen out of the intimation dated 29.02.2020 passed u/s 143(1) by CPC, Bengaluru vide Document Identification No. CPC/1920/A5/1975401671. The above appeal was heard in physical hearing mode in Open Court proceedings. 2. The assessee has raised following grounds of appeal in memo of appeal filed with the Income Tax Appellate Tribunal(here in after called "the tribunal"), Circuit Bench, Varanasi, U.P. :- "1. Because, the learned 1 A. A. failed to appreciate the basic issue: "whether income of the nature defined u/s. 2(24)x of the I.T. Act falls u/s.28 (Profits and gains from business or profession)" being still 'res-integra' and re-framed that to suit with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the relevant statute , which was in violation of provisions of Section 36(1)(va) r.w.s. 2(24)(x) of the Act. 4. The assessee filed first appeal before the learned CIT(A) who dismissed the appeal of the assessee by relying on the decision of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. v. CIT (Civil Appeal No. 2833 of 2016, vide judgment and order dated 12.10.2022), reported in (2022) 143 taxmann.com 178(SC) . 5. Aggrieved by the appellate order passed by ld. CIT(A), the assessee filed second appeal with tribunal. The learned counsel for the assessee submitted that the additions are being made of Rs. 1,28,680/- for delayed deposit of EPF / ESI beyond the time stipulated under section 36(1)(va) r.w.s. 2(24)(x) o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder the relevant statute, as is referred to in Section 36(1)(va). The ld. Counsel for the assessee drew our attention to para 30 and 32 at page no. 9 and 10 of the paper book , and submitted that it is the employer's responsibility to deposit the employer contribution as well as employee contribution with the fund, within the due date. The employer is entitled to recover the employee contribution from the salary of the employee. He referred to provisions of Section 43B of the Act. The ld. Counsel for the assessee also referred to provisions of section 40 of the Employees State Insurance Act. He drew our attention to page no. 4 of the paper book where the complete detail of the PF / ESI payable by the assessee with respect to employees cont....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplicable , but the income is not chargeable to tax under the head income from 'Profit and gain from business or profession' and such type of enterprises are covered under section 56 which are not business enterprises, and the income is chargeable to tax under the head 'Income from other sources'. Reference is drawn by ld. Sr. DR to provisions of section 57(ia) of the Act, and it was submitted that provisions of Section 36(1)(va) is referred to in Section 57(ia) and deduction shall be allowed only when the employee contribution towards PF/ESI are deposited within the due date as prescribed under the relevant statute. Section 2(24)(x) creates a deeming fiction wherein employee contribution towards PF/ESI constitute deemed income. The ld. SR ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....submitted before the Bench that income by way of deeming fiction under section 2(24)(x) cannot be brought to tax under the head 'Profits and Gains from Business or Profession' , as Section 28 does not stipulate that deemed income u/s 2(24)(x) shall be brought to tax as Income from Business or Profession , while Section 56(1)(ic) clearly stipulates that such income covered u/s 2(24)(x) shall be brought to tax if the same is not brought to tax under the head 'Profits and Gains from Business or Profession'. There is no dispute that Section 2(24)(x) refers to any sum received by the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of the Employees' State insurance A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions for allowing deduction and clearly stipulates that the deduction in respect to income as defined under section 2(24)(x) shall be allowed provided the said employee contribution is deposited by employer with the relevant fund governing PF/ESI within the time prescribed under relevant statute governing PF/ESI. Thus, this contention of the assessee is rejected that deemed income u/s 2(24)(x) cannot be brought to tax under Chapter IVD. We have also observed that this issue of delayed deposit of employee contribution towards PF/ESI beyond the time prescribed under the relevant statute governing PF/ESI is no more res integra as Hon'ble Supreme Court has already decided the issue in favour of Revenue in the case of Checkmate Services Pvt.....