2022 (4) TMI 1282 - AT - Income Tax

Disallowance towards delayed payment of employee s contribution to provident fund under section 36(1)(va) - HELD THAT - From the facts available on record it is evident that the due date of filing the return of income for the year under consideration was 30.11.2019. Further from the details of contribution received from employees towards provident fund as forming part of tax audit report we find that on certain occasions payments were made to the concerned authorities beyond the due date provided under the relevant provident fund statute. Further in the present case it has not been disputed that the payment of employee s contribution towards provident fund was made before the due date of filing of return of income. The only basis on which the Revenue denied the claim of assessee in respect of employee s contribution to provident fund was that the payment was made beyond the due date prescribed under the relevant provident fund statute. We find that the Hon ble Jurisdictional High Court in Ghatge Patil Transports Ltd. 2014 (10) TMI 402 - BOMBAY HIGH COURT held that both employee s and employer s contributions are covered under the amendment to section 43B of the Act relying upon the decision of the Hon ble Supreme Court in CIT v/s Alom Extrusions 2009 (11) TMI 27 - SUPREME COURT and therefore payment of employee s contribution on or before the due date of filing of return of income is allowable. In the present case the payment of employee s contribution towards provident fund was made after the due date prescribed under the relevant provident fund statute though before the due date of filing the return of income. Thus respectfully following the aforesaid judicial precedents we direct the jurisdictional Assessing Officer to delete the disallowance made under section 36(1)(va) of the Act. As a result ground No. 1 raised in assessee s appeal is allowed.

Summary

Issues:
1. Disallowance towards delayed payment of employee's contribution to provident fund under section 36(1)(va) of the Income Tax Act, 1961.
2. Addition made by the Assistant Director of Income Tax, CPC outside the scope of provisions of section 143(1) of the Act.

Issue 1: Disallowance towards delayed payment of employee's contribution to provident fund under section 36(1)(va) of the Income Tax Act, 1961:

The appeal challenged the impugned order that disallowed INR 17,17,650 for delayed payment of employee's provident fund contribution. The assessee contended that the payment was made before the due date of filing the income tax return. The Commissioner of Income Tax (Appeals) upheld the disallowance, citing recent amendments and decisions from the Madras and Gujarat High Courts. The assessee argued that the delayed payment was within the due date of filing the return of income. The counsel referred to judicial precedents and highlighted that the amendments by the Finance Act, 2021, apply from the assessment year 2021-22 onwards. The Tribunal noted that the payment was made before the due date of filing the return of income, and following judicial precedents, directed the Assessing Officer to delete the disallowance under section 36(1)(va) of the Act.

Issue 2: Addition made by the Assistant Director of Income Tax, CPC outside the scope of provisions of section 143(1) of the Act:

The second ground raised by the assessee was not pressed during the hearing and was dismissed as not pressed. Consequently, the appeal was partly allowed by the Tribunal. The decision was pronounced in open court on 26.04.2022.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the arguments presented by the parties, the legal precedents cited, and the final decision rendered by the Tribunal.