TaxTMI 
TaxTMI 
2026 (1) TMI 815
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....he disallowance can be sustained where there has been delayed payment of employee's contribution by the employer depositing the same in various funds of ESI, PF etc. belatedly as per dates mentioned within the said statute itself. 3. The assessee in the present case has admitted as per audit report itself that there has been delayed payment of employee's contribution to ESI, PF etc. which is self-admitted statement given by the assessee. In such scenario, the Hon'ble Apex Court in the case of Checkmate Services Private Limited Vs. Commissioner of Income Tax-1 (2023) 6 SCC 451 has held that if the employee's contribution has been deposited belatedly to any of the labour laws funds i.e. ESI & PF etc., belatedly as per the dates mentioned i....
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....s called for. But, the position is absolutely clear after the judgment of the Hon'ble Apex Court in the case of Checkmate Services Private Limited Vs. Commissioner of Income Tax-1 (supra) and as per its applicability in the present facts and circumstances in the case of the assessee before us that even on the basis of Article 141 of the Constitution of India, the decision of Checkmate Services Private Limited Vs. Commissioner of Income Tax-1 (supra) of the Hon'ble Apex Court is binding on all Sub-ordinate Judicial Forums. 6. The core principle established is that the law has changed regarding due date for depositing the employee's share of contribution to the relevant funds and post the decision of Checkmate Services Private Limited Vs. ....
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....d section 43B of the Act and whether the appellant-assessee's were entitled to deduction of amounts deposited by them towards employees' contribution in terms of EPF Act, EPF Scheme, ESI Act, ESI Regulations or any other provident fund or superannuation funds. In the aforesaid judgment, the Hon'ble Supreme Court has analysed the legal essence of the welfare legislations such as ESI, EPF, etc. which are primarily for the benefit of the employees. The employees' hard earned money are contributed to these funds whereby their contributions are given to the employers to be deposited as per these enactments. When the money is given by the employees, the employer is holding that money on behalf of the employees in the manner of good faith and ....
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....tted fact that the payment of employees' contribution to the various welfare funds i.e. ESI & PF etc. was made beyond the due date as provided in the respective Statutes. That as per the judgment of Hon'ble Supreme Court (supra), we hold that the assessee-employer was duty bound to deposit the employees' contribution to provident fund within the due date as mentioned in the respective Statutes. Since this was not done the assessee is not entitled for deduction u/s. 36(1)(va) read with section 43B of the Act and the said amount has to be construed as deemed income of the assessee and added to his total income. Similar view has been taken by the ITAT, Pune Bench in the case of Kohinoor Development Corporation Vs. Asst. Director of Income ....