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TMI Blog2025 (4) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... is bad in law as well as in terms of the facts of the case. 2. THAT the Ld. CIT (Appeals) without applying his mind to the facts and circumstances of the present matter, upheld the tax liability computed by the Ld. Assessing Officer and dismissed the appeal of the Appellant by concluding that once the claim of deduction as per the law is not allowable, same can be disallowed in the intimation u/s 143(1). The judgment of Hon'ble Supreme Court in Checkmate Service Pvt Ltd & Others vs. CIT & Others (2022) 448 ITR 518 (SC) is a law, which has to be interpreted that this was the position of law from the date of enactment of provision. It was further stated that as per Article 141 of the Constitution of India, the law declared by the Hon'ble Supreme Court shall be binding on all Courts within the territory of India. 3. That it is pertinent to mention that the Ld. CIT (Appeals) in the Impugned Order has stated that the Appellant has failed to file its response to notice under section 250 of the Act. However, in the subsequent paragraphs of the Impugned Order, the Ld. CIT (Appeals), has himself admitted and cited the contentions and case laws as relied upon by the Appellant in his w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn contribution as well as an administrative charge of such percentage [of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than excluded employee and in respect of which provident fund contribution payable, as the Central Government may fix. He shall within fifteen days of the close of every month pay the same to the fund [electronic through internet banking of the State Bank of India or any other Nationalized Bank] [or through PayGov platform or through scheduled banks in India including private sector banks authorized for collection on account of contributions and administrative charge: Provided that the Central Provident Fund Commissioner may for reasons to be recorded in writing, allow any employer or class of employer to deposit the contributions by any other mode other than internet banking." From the bare perusal of the above, it is apparent that the assessee is entitled to make the payment in respect of the contribution within 15 days from the close of the month during which the disbursement of salary/wages is actually made and not from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o produce a rational result and furthermore that any case of ambiguity is required to be resolved in favour of the assessee. 11. THAT it is also apposite to mention the decision of the Hon'ble Calcutta Bench of this Hon'ble Tribunal in the case of Kanoi Paper and Industries Ltd. v. Asstt. CIT [2002] 75 TTJ 448 (Cal) wherein it was observed that the accrual of liability towards payment of salary without actual disbursement would not fasten obligation for deposits of employee's contribution in the labour Acts per se. The said view has also been upheld by various coordinate benches of this Hon'ble Tribunal. The relevant extract of the aforesaid judgement is reproduced herein below: "6. Clause 38 of the Employees' Provident Fund Scheme, 1952, fixes the time-limit for making payment in respect of contribution to the provident fund to be 15 days from the close of the month concerned. However, the issue here is whether the "month" should be considered to be the month which the wages relates or the month in which the actual disbursement of the wages is made, we are of the considered opinion that the expression "month" should mean here the month during which the wages/salary is actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and Industries Ltd.v. Asstt. CIT [2002] 75 TTJ 448 (Cal). Thus, the Hon'ble Delhi Bench "G", without expressing any opinion on merits on the aforesaid aspect, remanded the matter back to the assessing officer. Similarly, the same bench vide order dated 18.10.2023 in the case of Sai Computers Ltd., Sai Dham, Victoria Park, Meerut v. ADIT, CPC, New Delhi (I.A. No. 2864/Del/2022, Assessment Year 2019- 20), has also upheld the aforestated contention of the Appellant. In this case it was observed that the crux of the judgment in Checkmate Pvt. Ltd. vs. CIT (2022) 143 taxmann.com 178 (SC) is that employees' contribution stands on a different footing than employer's contribution. However, the assessee is entitled to show that the employee's contribution to PF/ESIC has been timely deposited qua the due date of payment of salary under the respective statute. Furthermore, qua the contention of due date of payment of salary under the respective statute Hon'ble Delhi Bench "G", relied upon Kanoi Papers (supra). The relevant extract of the aforesaid judgement is reproduced herein below: "4. We find merit in such alternative plea towards timely deposit of employees' contribution to PF/ESIC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Checkmate Services Pvt. Ltd. vs. CIT [2022] 143 taxmann.com 278 (SC). 8. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A). 9. We have heard the ld. DR and perused the materials available on record. It is observed that the assessee has challenged the addition/disallowance made by the ld. A.O. and upheld by the ld. CIT(A) on the delayed payment of PF and ESIC towards employees contribution. As this issue is no longer res integra and stands squarely covered by the decision of the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra), wherein it was held that the employees contribution deducted by the assessee u/s. 36(1)(va) of the Act is an allowable deduction only when the same is deposited by the employer on or before the due date specified under the relevant Acts and the same would amount to the employer's income u/s.2(24)(x) of the Act, if the same is not deposited in the relevant statutory funds. The same is binding on all courts as per Article 141 of Constitution of India and, therefore, we decline to interfere with the same. 10. The other grounds of appeal raised by the assessee pertains to the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scheme of the Provident Fund Act imposed an obligation on the employer to remit both the shares of contributions in the first instance and para 32 empowered the employer to recover the employees' contributions from the wages of the employees. As per para 38 of the scheme, the employer is required to remit both the contributions together with the administrative charges thereon within 15 days before the close of every month. 7. Thus as seen from the above provisions, it is clear that it is the responsibility of the employer to make payment of the contributions at the first instance irrespective of the fact, whether the wages are paid in time or not. Hence the actual payment of wages on the 7th day of succeeding month would not any way alter the situation and give room for interpreting that the "close of 15th day" has to be calculated from the end of the month in which the wages were actually paid. The payment of wages on the 7th day of succeeding month would not in anyway alter the initial responsibility of the employer for making payment of contributions, which he is statutorily authorised to recover from the employees salary, whether the salary is paid in time or not, Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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