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Judgment
PER KRINWANT SAHAY A.M.
Appeal in this case has been filed by the assessee vide order dated 01.12.2025 passed by the ADDL/JCIT(A) Madurai for the A.Y.2018-19. Grounds of appeal are as under :-
1.That the rectification order passed under Section 154 read with Section 143(1) of the Act and the disallowance made are illegal, bad in law and without jurisdiction. The National Faceless Appeal Centre (CTT(A)) too has erred in sustaining the same.
2.That in view of the facts and circumstances of the case, the Centralized Processing Centre (CPC) has erred in making the 2 disallowance on account of late deposit of ESI and PF under Section 36(1)(va) of the Act amounting to Rs. 8,84,441/-. The CIT(A) too has erred in sustaining the same.
3.That in view of the facts and circumstances of the case, the CPC has erred in not considering that the addition made is beyond the scope of Section 143(1) of the Act. The CIT(A) too has erred in sustaining the same.
4.That in view of the facts and circumstances of the case, the CPC has erred in not appreciating that no disallowance is called for + WHARE employees share of contribution is paid before the due date of filing the return under Section 139(1) of the Act. The CIT(A) too has erred in sustaining the same.
5.That in view of the facts and circumstances of the case, the NFAC has erred in not considering that the month in which the salary is actually disbursed to the employee should be considered as the relevant month of deduction for the purpose of calculating the due date of deposit of Employee Provident fund and Employees State Insurance.
6.Without prejudice, in view of the facts and circumstances of the case, the CPC as well as NFAC have erred on facts and in law, 6 in not considering that the expenditure incurred, being a business expenditure, ought to have been allowed under Section 37 of the Act.
7.That the CPC as well as the CIT(A) have erred in not providing any opportunity to the Assessee and the same is in violation of principle of natural justice and hence, the impugned orders are liable to be set aside on this ground alone.
8.That the CPC as well as the CIT(A) have erred in not considering the material available on record and have failed to judicially interpret the same as the same do not justify the addition/disallowance made.
9.That in view of the Facts and circumstances of the case and in law, the CPC as well as NFAC have erred in charging interest under section 234A, 234B, 234C of the Act. The charging of interest is illegal and excessive and has been wrongly worked out. It cannot be justified by any material on record.
The only issue involved in this case is the action of CPC in making disallowance on account of late deposit of ESI/ PF u/s.36(1)(va) of the Act.
During the proceedings before us Ld. Counsel for the assessee argued that the Ld. CIT(A) has erred in not considering that the month in which the salary is actually disbersed to the employee should be considered as the relevant month of deduction or purpose of calculating the due date of deposit of employee PF and ESI etc.
Per contra the ld. DR relied on the order of the Ld. CIT(A).
We have considered the arguments of the Ld. Counsel for the assessee as well as that of the Ld. DR. We find that this issue is squarely covered by the coordinate Bench order in ITA No.3207/Del/2025. We find similar view has been taken by the co-ordinate benches in the cases of B. L. Kashyap & Sons Ltd. in ITA No.2701/Del/2022 for the A.Y. 2020-21 and ACIT vs. VVDN Technologies Pvt. Ltd. ITA No. 164/Del/2023. The Id. Counsel submits that in view of these decisions the matter may be restored to the file of the Assessing Officer to ascertain the due date for remittance of the PF/ESI contributions of employees. Considering the decisions of the coordinate benches referred to above we restore this issue to the file of the Assessing Officer to decide in the light of the observations made by the Tribunal in the case of Kanoi Paper & Industries Ltd. Vs. ACIT (2002) 75 TTJ 448 (Cal.). Needless to say that the Assessing Officer shall provide adequate opportunity of being heard to the assessee and the assessee is at liberty to provide all the necessary information in support of its contention.
Since the above issue is squarely covered by the above decision, we are inclined to remit back the issue to the file of the AO to consider as per law after giving proper opportunity of being heard to the assessee. Accordingly, the appeal of the assessee is allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purposes.