Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 346 - AT - Income TaxDisallowance of late payment of employees contribution to PF/ESI - addition confirmed by processing of return u/s 143(1) later confirmed vide rectification order u/s 154 - employee share of PF/ESI collected by employer from salaries of employees which was not deposited before the due date prescribed under the statute governing PF/ESI and claimed by Revenue to be hit by provision of Section 36(1)(va) read with Section 2(24)(x) - Scope of amendment by Finance Act, 2021 in Section 36(1)(va) and 43B - HELD THAT:- As decided in M/S. COMMERCIAL AUTO SALES PRIVATE LIMITED [2022 (1) TMI 1000 - ITAT ALLAHABAD] if the employee share of PF/ESI is deposited by employer to the credit of employee with the relevant fund maintained for PF/ESI before the due date of filing of return of income u/s 139(1) of the 1961 Act, then the assessee shall be entitled for deduction u/s 36(1)(va). Issue to be decided in favour of the tax-payer after considering the amendment made by Finance Act, 2021 by holding that if the employee share of contribution towards PF/ESI is deposited by employer-taxpayer with the relevant fund governing PF/ESI to the credit of employee before the due date for filing of return of income prescribed u/s139(1) for the relevant assessment year, the employer-taxpayer shall be entitled for deduction in the previous year relevant to ay to which such employee contribution to PF/ESI pertain. Division Bench of Allahabad-tribunal in the case of M/s Bharat Pumps and Compressors Limited [2021 (10) TMI 496 - ITAT ALLAHABAD] also decided this issue in favour of the taxpayer after considering the amendment made by Finance Act, 2021, by holding that if the employee share of contribution towards PF/ESI is deposited by employer-taxpayer with the relevant fund governing PF/ESI to the credit of employee before the due date for filing of return of income prescribed u/s139(1) for the relevant assessment year, the employer-taxpayer shall be entitled for deduction in the previous year relevant to ay to which such employee contribution to PF/ESI pertains. It is also observed that several Benches of tribunal across India have consistently taken a similar view in favour of the tax-payer, even after considering amendment made by Finance Act, 2021 to Section 36(1)(va) and 43B. We hold that in the instant appeal for ay: 2018-19, if the employee share of PF/ESI is deposited by employer to the credit of employee with the relevant fund maintained for PF/ESI before the due date of filing of return of income u/s 139(1) of the 1961 Act, then the assessee shall be entitled for deduction u/s 36(1)(va) of the 1961 Act. However, whether this amount of Rs. 31,46,748/- towards employees share of PF/ESI was actually deposited before the due date for filing of return u/s 139(1) or not is a matter of verification. Thus for limited purposes , we are directing AO to verify the challans evidencing deposit of aforesaid employee share of PF/ESI and that it was deposited before the due date prescribed for filing of return of income u/s 139(1), before allowing claim of deduction u/s 36(1)(va) of the 1961 Act. The assessee is directed to file before AO complete details/bifurcation of employees share of PF/ESI , which was added to income of the assessee u/s 36(1)(va) read with Section 2(24)(x) along with relevant paid challans, for verification. Appeal of assessee allowed.
|