Ranbir Singh Sorout vs ITO

These appeals are preferred by the assessee against the orders of ld. CIT (Appeals) for the respective assessment years.

Since the facts are identical and the appeals were heard together, these are being consolidated and disposed off by this common order.

For the sake of reference, we are referring grounds of appeal for AY 2017-18 which read as under :-

“1. That on the Facts and Circumstances of the case and in law, the order passed by the Ld. Assessing Officer (hereinafter referred to as Ld. AO) is bad in law and the appellant denies its liability to be assessed at income of Rs 64,46,470/- as against the returned income of Rs 42,72,440/-

That on the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Appeals (hereinafter referred to as 'CIT (A)'), grossly erred in confirming the addition amounting to Rs 21,42,901/- of Employee Contribution of PF & ESI made under section 43(B) of the income tax act, 1961 which is uncalled for, based on surmises and conjectures and bad in law.

That on the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Appeals (hereinafter referred to as 'CIT (A)'), grossly erred in not allowing the expenditure, related to business expediency, amounting to Rs 21,42,901/- of Employee Contribution of PF & ESI under section 37(1) of the income tax act, 1961 which is uncalled for, based on surmises and conjectures and bad in law.”

Brief facts of the case are that the assessee is an individual and proprietor, M/s Trident Industrial Solutions. The assessee has filed its return of income on 11.10.2018 declaring a total income of Rs.42,72,240/- for the AY 2017-18. The Centralized Processing Centre (CPC) while processing the return for the AY 2017-18, assessed the income of the appellant at Rs.64,46,470/- by making an addition of Rs.21,42,901/- u/s 36(1)(va) of the Act on the ground that the assessee deposited employees contribution of PF / ESI beyond the due date specified under PF/ESI Act, although the same were deposited before the due date of filing of return of income. A further addition of Rs.9735/- was made u/s 37 of the Act on account of ESI penalty. An addition of Rs.21,400/- was also made by the AO on account of labour welfare u/s 43B of the Act.

Upon assessee’s appeal, ld. CIT (A) deleted the addition for ESI penalty but confirmed the addition of Rs.21,42,901/- under section 36(1)(va) of the Income-tax Act, 1961 (for short 'the Act') on the ground that assessee deposited employees provident fund beyond the due date specified under PF/ESI Act.

Against this order, assessee is in appeal before us. None appeared on behalf of the assessee. Hence, we are going to adjudicate the appeal after hearing the ld. DR for the Revenue and perusing the material on record.

Upon careful consideration, we find that this issue is fully settled in favour of the Revenue by the decision of Hon’ble Apex Court in the case of Checkmate Services Pvt. Ltd. (2022) 143 taxmann.com 178 wherein it has been held that if employee contribution of provident fund and ESI paid beyond due date as specified under the relevant Act then the same has to be added back in the income of the assessee. Respectfully following the precedent, we do not find any infirmity in the order of the ld. CIT (A). Accordingly, we uphold the same.

Our above order applies MUTATIS MUTANDIS in case of ITA Nos.53 & 54/Del/2023 for AYs 2018-19 & 2019-20.

In the result, all the appeals filed by the assessee are dismissed.