TMI Blog2023 (2) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(Appeals). The grounds taken by the assessee on this issue are dismissed. - ITA No.1181/Bang/2022 - - - Dated:- 2-2-2023 - SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND Ms. PADMAVATHY S, ACCOUNTANT MEMBER For the Appellant : Shri Balaram R. Rao, Advocate For the Respondent : Shri Gudimella VP Pavan Kumar, Jt.CIT(DR)(ITAT), Bengaluru ORDER Per Padmavathy S., Accountant Member This appeal by the assessee is against the order of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], Delhi dated 15.11.2022 for the assessment year 2019-20. 2. The assessee is a private limited company and a 100% export oriented unit. It is engaged in the export of processed gherkins and other vegetables and other produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laries of employees and that employees contribution has to be deposited within the due date u/s 36(1)(va) i.e. due dates under the relevant employee welfare legislation like PF Act, ESI Act etc. failing which the same would be treated as income in the hands of the employer u/s.2(24)(x). 6. We have heard both the parties and perused the material on record. We notice that the Hon ble Supreme Court in the case of Checkmate Services (supra) has considered the issue of whether the employees contribution paid before due date for filing the return of income u/s.139(1) whether otherwise allowable u/s.43B, putting to rest the contradicting decisions of various High Court. The relevant extract of the decision is as given below 52. When Parli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it brought into the fold of income amounts that were receipts or deductions from employees income; at the time, payment within the prescribed time by way of contribution of the employees share to their credit with the relevant fund is to be treated as deduction (Section 36(1)(va)). The other important feature is that this distinction between the employers contribution (Section 36(1)(iv)) and employees contribution required to be deposited by the employer (Section 36(1)(va)) was maintained - and continues to be maintained. On the other hand, Section 43B covers all deductions that are permissible as expenditures, or out-goings forming part of the assessees liability. These include liabilities such as tax liability, cess duties etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasoning in the impugned judgment that the non-obstante clause would not in any manner dilute or override the employer s obligation to deposit the amounts retained by it or deducted by it from the employee s income, unless the condition that it is deposited on or before the due date, is correct and justified. The nonobstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot find any reason to interfere with the impugned judgment. The appeals are accordingly dismissed. 7. In view of the above decision of the Hon ble Supreme Court, we hold that the employees contribution to PF and ESI should be remitted before the due date as per explanation to section 36(1)(va) i.e., on or before the due date under the relevant employee welfare legislation like PF Act, ESI Act etc., for the same to be otherwise allowable u/s.43B. We therefore see no reason to interfere with the order of the CIT(Appeals). The grounds taken by the assessee on this issue are dismissed. 8. Levy of interest u/s. 234B and 234C is consequential. 9. In the result, the appeal by the assessee is dismissed. Pronounced in the open court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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