Jagdish Kumar vs ITO

The instant appeal filed by the assessee is directed against the order dated 30.11.2022 passed by the Commissioner of Income Tax (Appeals) – NFAC, Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) arising out of the assessment order dated 08.01.2020 passed by the DCIT, CPC, Bengaluru under Section 143(1) of the Act for the Assessment Year (A.Y.) 2018-19.

Assessee filed its return of income for A.Y. 2018-19 on 31.10.2018 declaring total income at Rs.57,82,054/-, which was processed under Section 143(1) of the Act by CPC, Bengaluru and by and under Intimation dated 08.01.2020, addition to the tune of Rs.46,31,856/- made on account of “Delayed Payment of Employees Contribution” towards EPF/ESI under Section 36(1)(va) of the Act, was informed which was further confirmed by the First Appellate Authority. Hence, the instant appeal before us.

The details of salary and wages paid to the employees, the actual date of deposit of employee’s shares of PF/ESI to the Government account and the due date for deposit of the same on the basis of salary and wages disbursed during the month has been narrated by the assessee before us in the following manner :

On the basis of the above tabulated sheet, it is the case made out by the assessee that as the due date for depositing employee’s contribution to the Govt. account is 15th of the next month of payment actually made for a particular month and since the assessee has duly remitted the same within the due date from the end of the month, in which salary was actually disbursed, the assessee would be entitled to relief under Section 36(1) of the Act and no addition, therefore, is sustainable in the eyes of law. In that view of the matter, he prays for setting aside the issue to the file of Learned AO for verification of the same on the basis of the details as narrated hereinabove. Such prayer made by the assessee has not been controverted by the Learned DR with all his fairness.

Having heard the Learned Counsels appeared for the parties and having regard to the facts and circumstances of the case, we are of the considered opinion that the issue is required to be adjudicated afresh on the basis of the details narrated hereinabove in regard to the deposit of employee’s contribution by the employer afresh. We, thus, set aside the issue to the file of Learned AO to pass a reasoned order in light of the above observations upon granting of an opportunity of being heard to the assessee and upon considering the evidence on record and any other evidence which the assessee may choose to file at the time of hearing of the matter.

In the result, appeal of assessee is allowed for statistical purposes.