Karnataka High Court
Prolific Hr Consultants (India) Ltd vs Additional Director Of Income Tax (Cpc) on 10 September, 2025
Author: S.G.Pandit
Bench: S.G.Pandit
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ITA No. 561 of 2023
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF SEPTEMBER, 2025
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
INCOME TAX APPEAL No. 561 OF 2023
BETWEEN:
1. PROLIFIC HR CONSULTANTS (INDIA) LTD.,
No.3, DTDC HOUSE,
VICTORIA ROAD,
BANGALORE 560047,
PAN No.AAECP2260L
REPRESENTED BY
MR. SUSANT KUMAR MUKHOPADHYAY, (CEO)
...APPELLANT
(BY SRI VIKRAM HUILGOL, SENIOR ADVOCATE FOR
Digitally SRI A. MAHESH CHOWDHARY, ADVOCATE)
signed by
VALLI AND:
MARIMUTHU
Location: 1. ADDITIONAL DIRECTOR OF
HIGH COURT INCOME TAX (CPC),
OF
KARNATAKA BENGALURU.
2. DEPUTY COMMISSIONER OF
INCOME TAX (CPC),
BENGALURU,
NATIONAL FACELESS
ASSESSMENT CENTRE.
...RESPONDENTS
(BY SRI Y.V. RAVIRAJ, SENIOR STANDING COUNSEL)
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ITA No. 561 of 2023
HC-KAR
THIS ITA / INCOME TAX APPEAL IS FILED UNDER
SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF
ORDER DATED 18/07/2023 PASSED IN ITA
NO.432/BANG/2023, FOR THE ASSESSMENT YEAR 2021-22
PRAYING TO SET ASIDE THE APPELLATE ORDER DATED
18/07/2023 IN ITA NO.432/BANG/2023 PASSED BY THE
INCOME TAX APPELLATE TRIBUNAL, A BENCH, BENGALURU
FOR THE ASSESSMENT YEAR 2021-22 VIDE ANNEXURE-A.
THIS APPEAL COMING ON FOR HEARING THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
and
HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE K.V. ARAVIND)
Heard Sri. Vikram Huilgol, learned Senior Counsel
appearing for Sri. A. Mahesh Chowdhary, learned counsel for
the appellant, and Sri. Y. V. Raviraj, learned Senior Standing
Counsel for the respondents.
2. The assessee is in appeal challenging the order
dated 18.07.2023 passed by the Income Tax Appellate
Tribunal, 'A' Bench, Bengaluru, in ITA No.432/Bang/2023 for
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the assessment year 2021-22, raising the following substantial
questions of law:
"1. Whether the Tribunal was right in law in
upholding the order of demand dated 13.11.2022
issued by the Respondent No.1 Authority which
added Rs.77,36,680/- to the income of the
Appellant under Section 36(1)(va) of the Income
Tax Act, 1961?
2. Whether the order passed by the Tribunal is
perverse in law and arbitrary as the Tribunal has
failed to consider the circular passed by the
Employees Provident Fund Organization and the
on-going pandemic for the delay in making the
payment for the month of April, 2020?
3. Whether on the facts and circumstances of
the case, the Tribunal's order can be said to be
arbitrary as it has upheld the order of the
CIT(Appeals) which was passed on an observation
that the addition is not penal but an additional
contribution?"
3. The assessee filed the return of income for the
assessment year 2021-22. The Employees' Contribution
towards Provident Fund, which was required to be deposited on
or before 15.05.2020, was deposited by the assessee on
01.06.2020. Consequently, the claim for deduction under
Section 36(1)(va) of the Income Tax Act, 1961 (for short, 'the
Act') came to be rejected.
4. Pursuant to the intimation under Section 143(1) of
the Act dated 13.11.2022, the assessee preferred an appeal
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before the Commissioner of Income Tax (Appeals). The
Commissioner of Income Tax (Appeals), by following the
judgment of the Hon'ble Supreme Court in Checkmate
Services P. Ltd. v. Commissioner of Income Tax, Civil
Appeal No.2833/2016, dated 12.10.2022, dismissed the
appeal. The assessee thereafter preferred a further appeal
before the Tribunal. The Tribunal, under the impugned order,
by placing reliance on the aforesaid judgment of the Hon'ble
Supreme Court, upheld the disallowance of the Employees'
Contribution towards Provident Fund under Section 36(1)(va) of
the Act.
5. Sri. Vikram Huilgol, learned Senior Counsel
appearing for the appellant-assessee, submits that the due
date for deposit of the Employees' Contribution towards
Provident Fund was 15.05.2020. Owing to the lockdown
imposed on account of the COVID-19 pandemic, the deposit
came to be made on 01.06.2020. It is contended that except
for the present instance, the assessee has been regular in
depositing the Employees' Contribution towards Provident Fund.
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5.1 Learned Senior Counsel further submits that the
Employees' Provident Fund Organisation, by intimation dated
15.05.2020, directed that no proceedings be initiated for delay
in payment of contributions in view of the COVID-19 pandemic
and the lockdown declared under the Disaster Management Act,
2005. Reliance is also placed on the order of the Income Tax
Appellate Tribunal, 'D' Bench, Mumbai, in ITA
No.1965/MUM/2024, wherein, in identical circumstances and
for the very same month, deduction under Section 36(1)(va) of
the Act was allowed considering the impact of the COVID-19
pandemic. On the strength of the said reasoning, learned
Senior Counsel prays for similar relief in the present appeal.
6. Per contra, Sri. Y. V. Raviraj, learned Senior
Standing Counsel appearing for the respondents-Revenue,
submits that the disallowance is in strict conformity with the
judgment of the Hon'ble Supreme Court in Checkmate
Services P. Ltd. (supra). It is contended that the Tribunal has
not committed any error warranting interference. It is further
submitted that Section 36(1)(va) of the Act does not
contemplate any exception to cover the present situation and,
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therefore, the disallowance made under the said provision is
fully justified.
7. Having considered the submissions of the learned
counsel for the parties, it is noted that the learned Senior
Counsel for the appellant has not disputed the legal position
laid down by the Hon'ble Supreme Court in Checkmate
Services P. Ltd. (supra) and its applicability to the facts of the
present case. However, it is urged that in view of the peculiar
circumstances arising out of the COVID-19 pandemic, during
which lockdown was imposed, the delay of 16 days in making
the deposit was beyond the control of the assessee.
8. Having regard to the peculiar facts of the case, it is
noted that while the due date for deposit was 15.05.2020, the
deposit came to be made on 01.06.2020, and the delay is
stated to have occurred on account of the lockdown imposed
during the COVID-19 pandemic. It is further submitted that
except for the present default, the assessee has been regular in
depositing the contribution, which aspect is not disputed by the
learned Senior Standing Counsel for the Revenue.
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9. In the light of the peculiar facts involved in the
present case, and since the delay was not attributable to the
assessee but was occasioned due to the lockdown consequent
upon the COVID-19 pandemic, this Court, without entering
upon or answering the substantial questions of law raised for
consideration, deems it just and appropriate to direct the
Assessing Officer to allow deduction under Section 36(1)(va) of
the Act. It is made clear that the aforesaid direction is issued
having regard to the peculiar circumstances of the case and
without laying down any precedent or declaring any law on the
point.
10. With the above observations, the following:
ORDER
a) The appeal is allowed-in-part.
b) The order in ITA No.432/Bang/2023 dated
18.07.2023 passed by the Income Tax
Appellate Tribunal 'A' Bench, Bengaluru and
intimation to the above extent is hereby set
aside.
c) The Assessing Officer is hereby directed to
allow the deduction under Section 36(1)(va)
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of the Act insofar as the deposit made on
01.06.2020 which was due on 15.05.2020.
d) No orders as to cost.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(K. V. ARAVIND)
JUDGE
