2023 (6) TMI 1419

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....ted 05.11.2019 & 18.09.2020 passed by the Assessing Officer (AO) under Section 143(1) of the Income Tax Act, 1961 ( the Act) concerning AYs 2018-19 & 2019-20 respectively. 2. The captioned appeals relate to Assessment Years 2018-19 and 2019-20 involving identical issue of disallowance of expenditure towards employees contribution to ESIC/PF under Section 36(1)( va) of the Act. 3. Briefly stated, the assessee is engaged in the business of security man power supply and has filed the return of income after getting its account audited under Section 44AB of the Act. An e- notice under Section 143( 1)(a) was issued on the ROI as a show cause towards delay in deposit of PF and ESIC in relation to employees contribution. Thereafter, in the ab....

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....employed. In the back drop of nature of work, the ld. Counsel contends that the salary in such business is often disbursed to the employees as and when the funds are arranged from the clients. Owing to belated receipt of service charges from clients, the disbursement of salary are also, at times, paid late in tandem. The 'due date' for deposit of employees' contribution under the respective Acts should therefore be reckoned with reference to the month of actual salary payment and not when the liability to pay arises to an employer. It was further contended that when the due date under PF/ESIC Act is computed with reference to the month in which the salary has been actually paid, the alleged delay in payment of ESIC/ PF would be substantiall....

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....) is in controversy. 9.1 We notice at the outset that an opportunity was given via electronic platform of the deptt. for the proposed adjustments and in the absence of e-response, the adjustments were carried out the CPC- Bengluru and intimation was issued enhancing the assessed income in the captioned assessment years. The CIT( A) in the first appeal has sustained the adjustments towards belated deposits of employees' contribution to PF/ ESIC in the light of the judgment rendered by the Hon' ble Supreme Court in Checkmate Pvt. Ltd. vs. CIT, (2022) 143 taxmann.com 178 (SC). The contention of the Assessee that such additions cannot be made under the umbrella of S. 143( 1) is covered against the assessee the decision of the co-ordina....

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....ut on behalf the assessee towards methodology of calculation of default under the relevant PF/ESIC Act. The Ld. Counsel contends that the month during which the disbursement of salary is actually made would be relevant for the purposes of determination of due date of deposit under the respective statute. The accrual of liability towards payment of salary without actual disbursement would not fasten obligation for deposits of employees contribution in the labour Acts per se. as observed by the co-ordinate bench in Kanoi Paper and Industries Ltd. vs. ACIT (2002) 75 TTJ 448 (Cal). This aspect has not been found to be examined by the Assessing Officer or CIT(A). Hence without expressing any opinion on merits on this aspect, we deem it expedient....