Deduction of employees’ contribution to PF and ESI u/s 43B of the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL
BANGALORE BENCHES “A”, BANGALORE
Before Shri Chandra Poojari, AM & Smt.Beena Pillai, JM
ITA No.571/Bang/2021 : Asst.Year 2017-2018
ITA No.572/Bang/2021 : Asst.Year 2018-2019
ITA No.573/Bang/2021 : Asst.Year 2019-2020

M/s.Sanjeev Mehra
#69,70, Ananthapura Village
Velhanka, Singanayakanahalli
Bangalore – 560 064.
PAN : ACEPM1373J.

vs

The Joint Commissioner of
Income-tax (OSD), Circle
6(1)(1)
Bengaluru.

Appellant by : Sri.R.E.Balasubramanyam, CA
Respondent by : Sri.Sankar Ganesh K, Joint CIT-DR

Date of Hearing : 20.12.2021

Date of Pronouncement : 20.12.2021

O R D E R

These appeals at the instance of the assessee are directed against three different orders of the CIT(A), NFAC. The relevant assessment years are 2017-2018, 2018-2019 and 2019-2020.

2. The grounds raised in all these appeals are identical, i.e., whether the CIT(A) is justified in disallowing employees’ contribution to PF & ESI, which was paid before the due date of filing of the return of income u/s 139(1) of the I.T.Act.

3. The facts relating to the issue are that for the assessment years under consideration, the returns of income was filed by the assessee, declaring income of Rs.35,08,980 for A.Y.2017-2018, Rs.93,73,790 for A.Y. 2018-2019 and Rs.38,47,295 for A.Y. 2019-2020. The assessee was served with an intimation u/s 143(1) of the I.T. Act determining total income at Rs.47,76,130 for A.Y.2017-2018, Rs.98,94,050 for A.Y.2018-2019 and Rs.43,39,510 for A.Y. 2019-2020. The reason for the difference between the returned income and the income determined u/s 143(1) of the I.T. Act was on account of disallowance of late remittance of employees’ contribution to PF and ESI under the respective Acts.

4. Aggrieved by the intimation u/s 143(1) of the I.T.Act, the assessee preferred appeals before the first appellate authority. It was stated that the assessee had paid the employees’ contribution to PF and ESI prior to the due date of filing of the return u/s 139(1) of the I.T. Act. Therefore, it was submitted that the assessee is entitled to deduction of employees’ contribution to PF and ESI having regard to the provisions of section 43B of the I.T. Act. In this context, the assessee relied on the judgment of the Hon’ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT, reported in 366 ITR 408 (Kar.). The CIT(A), however, rejected the appeal of the assessee.

5. Aggrieved, assessee has filed these appeals before the Tribunal. The learned AR submitted that an identical issue was decided in favour of the assessee by the Tribunal in the case of M/s. Shakuntala Agarbathi Company Vs. DICT in ITA No.385/Bang/2021 (order dated 21.10.2021).

6. In the result, the appeals filed by the assessee are allowed. Order pronounced on this 20th day of December, 2021.

Please find attached the enclosed file for the full judgement.