In ITA Nos.354 to 357/PUN/2023- ITAT - ITAT (Pune) affirms CIT(A)’s decision, holds Classic Citi Investments Pvt. Ltd. not eligible for deduction due to delayed deposit of employee’s contribution towards PF/ESI
Members Inturi Rama Rao (Accountant) & S.S. Viswanethra Ravi (Judicial) [24-05-2023]

Read Order: Classic Citi Investments Pvt. Ltd v. The Dy. Commissioner of Income Tax

LE Correspondent

Mumbai, May 25, 2023: Upholding the order of the Commissioner of Income Tax (Appeals) [CIT(A)], the Pune bench of the Income Tax Appellate Tribunal has ruled that Classic Citi Investments Pvt. Ltd. (assessee) was not entitled to claim deduction for its failure to deposit employee’s contribution towards PF/ESI within the prescribed due date as per the relevant Act.

In the matter at hand, the CIT(A) on an examination of Tax Audit Report held that the assessee did not deposit employee’s contribution towards PF/ESI before the due date under the respective Acts and thereby, confirmed the disallowance made by the AO.

The two-member bench of Inturi Rama Rao (Accountant) and S.S. Viswanethra Ravi (Judicial), while dismissing the appeal filed by the assessee, placed reliance on Checkmate Services P. Ltd v. Commissioner of Income Tax [LQ/SC/2022/1296], wherein the Supreme Court has held that unless the conditions spelt by Explanation to section 36(1)(va) of the Income Tax Act are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date of respective statutes, the assessee was not entitled to claim benefit of deduction from the total income.