Delay in PF/ESI Deposit? ITAT Says No Relief, Cites SC’s Checkmate Judgment:

Delay in PF/ESI Deposit? ITAT Says No Relief, Cites SC’s Checkmate Judgment For A.Y. 2018-19, the assessee filed its income tax return, showing a revenue of Rs. 62,59,78,108 from its operations. However, the CPC added Rs. 94,56,959, claiming a mismatch between the declared revenue and the amount calculated from the return. The assessee explained that this mismatch occurred because the CPC incorrectly used the gross collected revenue of Rs. 63,51,63,167 without adjusting for sales tax and deductions made by contractors as the total turnover. Also, the CPC disallowed Rs. 2,71,900 under Section 36(1)(va) for late payment of employees’ PF and ESI contributions. The CIT(A) upheld both additions. The assessee, aggrieved, filed this appeal with the ITAT. Issues Raised: The main issues before the ITAT were whether the addition of Rs. 94,56,959 by CPC, due to an alleged mismatch in turnover, was valid when the assessee had reduced sales tax and deductions made by contractees from the gross revenue and whether the disallowance of Rs. 2,71,900 under Section 36(1)(va) for delayed deposit of employees’ PF and ESI was justified. ITAT Held: After considering the assessee's explanation of the turnover mismatch, the ITAT remanded the case to the Assessing Officer for record verification in order to make a new decision. In response to the Supreme Court's decision in Checkmate Services Pvt. Ltd., the ITAT maintained the disallowance on the second issue. Therefore, for statistical reasons, the appeal was partially granted. To Read full Judgment, Download PDF Given Below