2009 (12) TMI 38 - DELHI HIGH COURT

Late deposit of PF and ESI - During the assessment proceedings, the Assessing Officer (AO) found that the assessee had deposited employers’ contribution as well as employees’ contribution towards provident fund and ESI after the due date, as prescribed under the relevant Act/Rules. Accordingly, he made addition of ₹ 42,58,574/- being employees’ contribution under Section 36(1)(va) of the Act and ₹ 30,68,583/- being employers’ contribution under Section 43B of the Act. – CIT(A) deleted the addition by holding that the assessee had made the payment before the due date of filing of the return, which was a fact apparent from the record - that if the employees’ contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Fund Act as well as the ESI Act. Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. Insofar as the Income Tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down by the Supreme Court in Vinay Cement – Decided in favor of assessee