If the last day falls on a holiday, PF payments may be made on the following working day: ITAT
Fact and issue of the case
This appeal by the assessee is directed against the order of the ld. CIT (Appeals)-23, New Delhi dated 14.12.2022 pertaining to Assessment Year 2020-21.
The grounds of appeal taken by the assessee read as under :-
That the order of Ld. Commissioner (Appeals) is contrary to the law and the facts of the appellant’s case.
That the AO (CPC) erred in disallowing the PF payment amounting to Rs.89,644/- deposited on or before the due date of filing of Income Tax Return during the year.
That the Ld. CIT (A) erred in holding that PF deposited immediately on the next working day (due date being national holiday) would be considered as delayed payment and attract disallowance u/s 36(1)(va) of the Act.”
Brief facts of the case are that in this case, AO/CPC under section 143(1) of the Income-tax Act, 1961 (for short ‘the Act’) disallowed payment of PF amounting to Rs.89,644/- which was deposited after the due date under the relevant Act. Upon assessee’s appeal, ld. CIT (A) confirmed the same by referring to Hon’ble Supreme Court order in the case of M/s. Checkmate Services Pvt. Ltd. (2022) 143 com 178 (SC).
Against the above order, assessee is in appeal before us. We have heard both the parties and perused the records.
Counsel of the assessee submitted that the last date for depositing of payment of PF was national holiday and in such a situation, the deposit was made on the next date and the same should be accepted. For this proposition, he referred to ITAT order dated 29.05.2023 in ITA No.1843/Del/2021 for AY 2018-19 where, in similar circumstances, ITAT has concluded as under :- “
Observation of the court
In view of the provisions of the General clauses Act, 1897, reproduced above, we feel it appropriate to restore the issue back to the file of AO for examining the payments made on day next to due date, being holiday on due date and allow the deduction accordingly. The grounds raised by the assessee are accordingly allowed partly for statistical purposes.
In the result, the appeal filed by assessee is allowed partly for statistical purposes.”
Upon careful consideration and after hearing both the parties, we agree with the submissions that if the last date for depositing of payment is a holiday and the payment is made on the next date, the same should be allowed, as has been decided in the abovesaid case of ITAT. We also feel it appropriate to remit the issue back to the file of AO for examining the payments made on day next to due date, being holiday on due date and allow the deduction accordingly.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on this 18th day of July, 2023
In the result, appeal of the assessee is allowed and ruled in favour of the assessee