2013 (7) TMI 414 - KARNATAKA HIGH COURT

Deduction for contributions under EPF and ESI Act u/s 36 - whether the Assessing Authority and the revision authority were correct in disallowing the deduction towards contributions remitted by the assessee under the EPF and ESI Act, though some of which were remitted beyond the stipulated periods prescribed under the said statutes and the mandatory provisions of Sec.36(1)(va) r/w Sec.2(24)(x) and Sec. A3B of the Act, while the said payments were effected by the assessee before the due date for filing returns of income under Sec. 139(1) - Relying on the judgement of CIT v. Sabari Enterprises (2007 (7) TMI 169 - KARNATAKA HIGH COURT) – held that:- It is further observed that in order to bring about uniformity in allowing deductions to contributions to welfare funds, the amendment was necessitated, while the reason not to extend such deduction appeared to be that the employer should not sit on the collected contributions and deprive the workman of the rightful benefits under the social welfare legislations by delaying payment, of contribution - regard being had to the words "due date" there can be no more doubt that the Assessing Officer as well as the revision authority fell in error in disallowing the deduction being the employees' contribution remitted by the assessee both under the ESI and EPF Act, partly before 31/3/2006 in the financial year concerned and the balance before the filing of the returns under Sec. 139(1) of the Act, as extended upto 30/ 11/2006 – petition is decided in the favour of the assesse