Delay in payment of employee's contribution of
PF/ESI by one day due date being Sunday - applicability of General Clauses act
and SC judgment
Facts:
Assessee was disallowed delayed payment of
employee's ESI and PF contributions pertaining to June and July 2018. On appeal
CIT(A) sustained the disallowances. Stand of the assessee was that the
payment was delayed by 1 day that too because the due date happened to be a
Sunday and as per Section 10 of the General Clauses Act, 1897 where the due
date happens to be a closed day/holiday then the next day would be the deemed
due date as per the said enactment. Accordingly there was no delay from their
end and the SC verdict of Checkmate Services Pvt. Ltd. v. CIT-1 in [Civil
Appeal No. 2833 of 2016, dt. 12-10-2022] : 2022 TaxPub(DT) 6647 (SC) would
not apply to their case. On higher appeal -
Held in favour of the assessee that Section
10 of the General clauses Act, 1897 would apply to the assessee's case and
there was no delay in remitting the employee's contributions of ESI/PF and no
disallowance was warranted.
Section
10 in The General Clauses Act, 1897
10 Computation of time.
(1)
Where, by any 19 [Central Act] or Regulation made after the commencement of
this Act, any act or proceeding is directed or allowed to be done or taken in
any Court or office on a certain day or within a prescribed period, then, if
the Court or office is closed on that day or the last day of the prescribed
period, the act or proceeding shall be considered as done or taken in due time if
it is done or taken on the next day afterwards on which the Court or office is
open: Provided that nothing in this section shall apply to any act or
proceeding to which the Indian Limitation Act, 1877 20, applies
2). This Section applies also to all 19
[Central Acts] and Regulations made on or after the fourteenth day of January,
1887.
Ed. Note:
It is quite likely that there are a number of rectification/reopening cases
with even a 1 day delay in remittance citing the SC verdict of Checkmate
Services. This decision will provide succour to all such cases if the facts are
genuinely to be in fitment as in this decision.
Case: G.D. Foods & Manufacturing (India) (P.) Ltd. v. Asstt. DIT 2023
TaxPub(DT) 4262 (Del-Trib)