2019 (2) TMI 1743 - AT - Income Tax

Employee s Contribution payments towards ESIC - delayed payment after due date specified under section 36(1)(va) - HELD THAT - Hon ble Jurisdictional High Court in the case of CIT-vs-Gujarat State Road Transport Corporation 2014 (1) TMI 502 - GUJARAT HIGH COURT wherein it has been held that the assessee shall not be entitled to deduction of payments of Employee s Contribution to ESIC account if it is paid to the concerned account after the due date as specified u/s 36(1)(va) though he deposits the same before the due date prescribed u/s 43B i.e. prior to filing of return u/s 139(1) of the Act which according to us is just and proper without any infirmity. Hence we find no merit in this ground of appeal preferred by the assessee. The same is thus dismissed.

Summary

Issues:
Appeal against addition of late remittances of employee's contribution to PF and ESIC under section 36(1)(va) r.w.s. 2(24)(x) of the Income Tax Act, 1961.

Analysis:
The appeal before the Appellate Tribunal ITAT Ahmedabad pertained to the addition of Rs. 1,71,61,294 on account of late remittances of employee's contribution to the PF and Rs. 6,05,295 on account of late remittance of employees' contribution to ESIC, totaling to Rs. 1,77,66,589 under section 36(1)(va) r.w.s. 2(24)(x) of the Income Tax Act, 1961. The assessing officer disallowed this amount as per the provisions of the Act since the assessee had not deposited the employees' contribution to the PF/ESIC within the prescribed due date. The decision was based on the judgment of the Hon'ble Gujarat High Court in the case of Gujarat State Road Transportation Corporation. The CIT(A) confirmed the addition, citing the Gujarat High Court's decision in the case of CIT(A) vs. GSRTC.

During the appellate proceedings, the counsel for the assessee failed to present any new facts to challenge the Jurisdictional High Court's decision in the case of Gujarat State Road Transport Corporation. The Tribunal noted that the issue had already been decided against the assessee based on the due date prescribed in the relevant act for making deductions towards employee's contribution. Citing the Gujarat High Court's ruling that deductions should be made as per the due date, the Tribunal found no merit in the appeal and dismissed it accordingly. The appeal was dismissed, upholding the decision based on the precedent set by the Gujarat High Court.

In conclusion, the Appellate Tribunal ITAT Ahmedabad upheld the addition of late remittances of employee's contribution to PF and ESIC, as per the provisions of the Income Tax Act, 1961. The Tribunal's decision was based on the precedent set by the Gujarat High Court, emphasizing the importance of adhering to the due dates prescribed in the relevant act for making such deductions. The appeal of the assessee was dismissed, affirming the decision of the CIT(A) and the assessing officer.