TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 935
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....e addition of Rs. 31,01,954/- on account of provident fund/ESI having been deposited late. 2. That the Ld. Addl./Joint Commissioner of Income Tax (Appeals), has misled himself on the basis of incorrect facts mentioned in the audit report, wherein, the employees contribution as well as employers contribution and the administrative charges have been mentioned in the audit report and whereas the only employees contribution was required to be mentioned in the audit report. 3. That the addition as confirmed by Addl./Joint Commissioner of Income Tax (Appeals), is on incorrect figures mentioned in the audit report. 4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 4. Additionally the assessee had also raised the additional ground before us which are to the following effect:- 1 That the adjustment as made by the CPC on account of disallowance of EPF/ESI vide order, dated 22.06.2020 and making the addition of Rs. 31,01,954/- is bad in law and the said adjustment as made by the CPC could not have been made since at that time, the issue was debatable and not an arithmetical error.....
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....erefore no disallowance could be made in respect thereof. The Ld. AR drew our attention to the detailed chart forming part of Annexure 6 of Form 3CD, wherein month-wise details of ESI and PF contributions, due dates, and actual payment dates were furnished. On the basis of this chart, the assessee quantified the actual delayed employees' contribution at Rs. 2,42,162/- in respect of ESI and Rs. 16,64,984/- in respect of PF. This position was further confirmed by the certificate dated 22.09.2025 issued by Vishal Kapoor & Associates, Chartered Accountants, who certified the total late payments of employees' contribution for AY 2018-19 at the aforesaid figures. Thus, according to the assessee, the disallowance sustained by the lower authorities was factually inflated and not based on the correct classification of employer and employee components. 7.1 Without prejudice to the above factual contention, the Ld. AR submitted that even otherwise, the adjustment made under section 143(1)(a)(iv) was wholly unjustified because the issue of allowability of delayed employees' contribution to PF and ESI was, at the relevant point of time, a debatable one, pending consideration before the Hon'b....
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....CIT(A) appear to have been mechanically lifted from Form 3CD without examining whether those figures represented purely employees' contribution or also included the employer's contribution. The assessee has placed on record a duly certified statement showing that the delayed employees' contribution amounted to Rs. 2,42,162/- towards ESI and Rs. 16,64,984/- towards PF, whereas the balance pertained to the employer's contribution duly deposited before the due date under section 139(1). In our considered view, this factual aspect goes to the root of the controversy and requires proper verification at the level of the Ld. CIT(A). At the stage it may be relevant to mention that the assessee had filed the original tax report on 12/08/2018, in the said tax audit report the unpaid EPF was mentioned at Rs. 24,56,467/- and Rs. 6,45,486/- was mentioned towards ESI totaling to Rs. 31,01,953/- and thereafter a revised tax audit report was filed by the assessee on 22/09/2019. In the revised tax audit report for the A.Y. 2018-19, on page 57 of the paper book, the assessee has given the details of the payments which were delayed towards the employees' contribution for ESI and PF, which have be....
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....ey are indeed parimateria with the facts in the cited precedents. 9.5 It is, however, well settled that the law declared by the Hon'ble Supreme Court under Article 141 of the Constitution is declaratory in nature and operates from the date of insertion of the statutory provision itself. Therefore, the interpretation accorded in the judgment of the Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. binds all authorities as if it was the law from inception. The Ld. CIT(A) was thus duty-bound to apply the ratio of the Hon'ble Supreme Court as it stood on the date of his order. The subsequent decision of the Hon'ble Chhattisgarh High Court dated 08.05.2025 was not available for his appreciation at that stage. Further, the reliance placed on the decision of the Delhi Tribunal is of no assistance to the assessee since the disallowance by way of adjustment was made by the CPC on the basis of the particulars furnished in the audit report itself, which accompanied the return of income. 9.6 We may also observe that, as per Section 15 of the Income-tax Act, 1961, salary is chargeable to tax when it becomes due from the employer. The contribution towards ESI and EPF is integrally link....