TaxTMI 
TaxTMI 
2026 (1) TMI 1105
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.... Rs. 14,51,140/- as in consequent to disallowance of employee contribution of PF & ESI. Considering the same, the Ld. CIT (A) has been ignorant of the submission made has dismissed the appeal. d. The Ld. CIT(A) should have considered the fact that the CPC has no jurisdiction to disallow in respect of the statutory payment PF & ESI. e. That on the facts and in the circumstances of the case and in law, the Ld. CIT (A) -NFAC, Delhi erred in sustaining the addition of Rs. 14,51,140/- f. The Ld. CIT(A) has been ignorant of the fact that the ESI & PF are in the nature of business expenditure is allowable under the provision of Sec.37(1) as considering the ruling decision laid down in the case of M/S. Checkmate Services Pvt. Ltd. vs The Dy. CIT, CPC, Bangalore. g. Any other ground will be raised at the time of hearing". 3. The assessee has also raised the following additional ground of appeal: "5 (a) In the light of the facts and circumstances of the case of the Appellant, the claim of employees contribution towards ESI and PF is alternatively to be allowed under section 37(1) when it is disallowed under section 36(1)(va) of the Act". 4. ....
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....t protected by section 43B of the Act. The Ld. AR argued that prior to the Hon'ble Supreme Court judgment, the issue was debatable, and a debatable issue cannot be subject matter of adjustment under section 143(1) of the Act. Further, he relied upon the order of this Tribunal in the case of Dondapati Sudhakar Rao vs. ITO in ITA No. 701/Hyd/2025 dated 20.08.2025, which in turn relied on the judgment of the Hon'ble Chhattisgarh High Court in the case of Rajkumar Bothra vs. DCIT (Tax Case No. 56 of 2025 dated 08.05.2025), wherein under the similar facts, this Tribunal has allowed the appeal of the assessee. 7. Per contra, the Learned Departmental Representative ("Ld. DR") inviting our attention to para no.6.2 of the order of the Ld. First Appellate Authority submitted that the assessee had categorically accepted the disallowance before the Ld. First Appellate Authority and therefore cannot now challenge the same before the Tribunal. He further relied on the judgment of the Hon'ble jurisdictional High Court in the case of Synergies Castings Ltd. vs. ACIT 173 taxmann.com 503 dated 16.12.2024. The Ld. DR submitted that the Hon'ble High Court has considered identical facts, including t....
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....2, has held as under: "When Parliament introduced Section 43B of the Income Tax Act, 1961, what was on the Statute Book, was only employer's contribution (Section 34(1)(iv)). At that point in time, there was no question of employee's contribution being considered as part of the employer's earning. On the application of the original principles of law, it could have been treated only as receipts not amounting to income. When Parliament introduced the amendments in 1988-89, inserting Section 36(1)(va) and simultaneously inserting the second proviso of Section 43B, its intention was not to treat the desperate nature of the amounts, similarly. As discussed previously, the memorandum introducing the Finance Bill clearly stated that the provisions - especially second proviso to Section 43B - was introduced to ensure timely payments were made by the employer to the concerned fund (EPF, ESI, etc.) and avoid the mischief of employers retaining amounts for long periods. That Parliament intended to retain the separate character of these two amounts, is evident from the use of different language. Section 2(24)(x) too, deems amount received from the employees (whether the am....
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....n. Admittedly, the assessee has not paid the aforesaid amount on or before the statutory dates. The findings of fact has been recorded by the assessing officer, CIT(A) as well as by the Tribunal. The aforesaid finding of fact cannot, by any stretch of imagination, be said to be perverse. 13. It is not the case of the assessee that the aforesaid finding of fact is perverse. It is well settled in law that this Court, in exercise of powers under Section 260A of the Act, cannot interfere with the finding of fact until and unless the same is demonstrated to be perverse. (see Syeda Rahimunnisa v. Malan Bi by LRs (2016) 10 SCC 315 and Pr. CIT v. Softbrands India (P.) Ltd. [2018] 94 taxmann.com 426/406 ITR 513 (Karnataka)). 14. In view of the preceding analysis, no substantial question of law arises for consideration in this appeal. The same fails and is, hereby, dismissed. No costs." 9. On a perusal of the above, we observe that the Hon'ble High Court, has dealt with a situation where the intimation under section 143(1) of the Act was passed on 18.05.2020 (para no. 6 of the order), i.e., before the decision of the Hon'ble Supreme Court in Checkmate Services Pvt. Ltd. ....